Canada to boost mining amid China's rare earth curbs, says ex-finance minister

Qatar Tribune

12 hours ago

Agencies
Canada's new government will invest more in mining at a time when the country's economy and manufacturing sector are facing 'challenges' related to China's curbs on rare earth exports, Bill Morneau, former Canadian finance minister, told the Post.
'One of the challenges for Canada is that we will need to increase our own mining,' Morneau, who was in office between 2015 and 2020 under then-prime minister Justin Trudeau, said in Shanghai on Friday.
'The initiative by new [Prime Minister] Mark Carney is to advance the ability to get big projects done. Certainly, mining is one of the critical ones,' Morneau explained.
The former official acknowledged how Canada had taken some flak – collateral damage – amid US-China trade war escalations. Canadian firms, he said, have been affected by China's export restrictions on critical minerals that are still reverberating through the global industrial chain.
'Canada has a very significant part to play in the North American automotive sector. Any challenges around rare earths have an impact on that sector and, therefore, on Canada,' he said. 'So, there is a stake in that discussion for Canada. It's one of the important reasons that we hope these things get resolved.' Canada is sitting on a reserve of 15.2 million tonnes of rare earth oxide, according to a 2023 official estimate. Its reserves include both light and heavy rare earth elements, with key projects in Quebec and Labrador.
Also on Friday, Ontario Premier Doug Ford was quoted by the Financial Times as saying that Canada was fast-tracking development of its critical minerals reserve over indigenous opposition, to generate revenue in response to US President Donald Trump's tariffs.
Morneau also complained about how long it took to get mining approvals.
Mining projects in Canada have traditionally been a complex process involving multiple levels of government, with discussions concerning the environment, indigenous rights and workers' safety, to name a few. Sometimes the process can take several years.
'Canada has much opportunity … But we have not been as rapid in getting mining approvals as we would like,' Morneau said.
'But clearly, China has a significant advantage in rare earths from the investments made over many years. I hope that we have – as much as possible – a free flow of trade in that area.'
In a new development, China has granted permits to a major rare earth miner to facilitate shipments to the US and Europe.
This is widely seen as a positive outcome after Chinese and US officials had 'agreed in principle' to a trade framework – pending approval from their respective leaders – following crunch talks in London and a call between presidents Xi Jinping and Donald Trump on June 5.
Beijing's perceived slow progress in loosening its export controls, in place since April, on critical minerals, the lifeline for hi-tech industries – including smartphones, electric vehicles and fighter jets – was a major gripe for the US.
Morneau, an advocate of closer ties with China as a hedge against uncertainties from Canada's long-standing ally, said he was encouraged to see the latest talks between Beijing and Washington.
'There is a need for an understanding between the two, which will help all other countries in the Western sphere to have better trading opportunities with China,' he assessed.The talks hold out hopes of a mutual understanding, he said, adding, however, that everyone has to understand there will continue to be geopolitical rivalries – those are natural and expected.
'The acute issue right now is, can we get to a more stable trading situation? There are places where the US and China will not agree.
That's just the way it is. But as soon as we can get to an understanding on where we do agree, then it's easier to have a trading relationship that works.' Getting down to the specifics in trade talks is a good place to start, he said.
'Discussions about rare earths are specific discussions,' Morneau explained. 'If we can agree on the specifics and places where we are going to allow businesses to successfully interact, then that will be a precursor to improved outcomes.' On the Chinese economy, Morneau said China faces challenges similar to those faced by many countries.
'There are long-term demographic issues. There are the obvious challenges of moving to domestic demand-led growth when you have more volatility around trade,' he said.
His advice to Beijing was to improve social security.
'One of the reasons people increase consumption is their confidence. Social programmes always have an important place to play,' he said. 'That's been our experience in Canada.'
After both Beijing and Ottawa had repeatedly clashed with Washington on trade, Carney and Chinese Premier Li Qiang, in a June 6 phone call, agreed on a 'reset' in the bilateral relationship after years of turbulence.
Morneau expressed optimism that China and Canada could expeditiously resolve disputes and grow trade in agriculture, natural resources and tech.
China is Canada's second-largest trading partner after the US, but a string of incidents in recent years deeply strained ties. China also imposes tariffs on Canadian agricultural exports such as canola and seafood.