The Canadian government is launching a strategic offensive to break China's stranglehold on the global supply of critical minerals. In an unprecedented move, Natural Resources Minister Tim Hodgson has announced plans for the federal government to take direct equity stakes in mining and processing projects deemed vital to national interests.
Direct Government Investment in National Interest Projects
Minister Hodgson revealed that the government has already begun evaluating specific projects that would receive these equity investments. The initiative targets operations that are struggling to secure private funding despite their strategic importance. "For example, some of the rare-earths processing facilities that are being talked about — unless they receive equity-like support, given the stranglehold that certain countries have on those markets, they're unlikely to happen," Hodgson stated in an interview with Bloomberg News.
The minister emphasized that these investments would be reserved for entities "deemed in the national interest, but for some reason they aren't able to find the equity." This represents a significant shift in policy for the Canadian government, which has traditionally avoided direct ownership in private sector resource projects.
Funding and Immediate Market Impact
The equity investment program will be financed through the $2 billion "critical minerals sovereign fund" introduced in the latest federal budget. This substantial fund will provide not only equity investments but also loan guarantees and offtake agreements to support the domestic critical minerals sector.
The market has already responded positively to the government's announcement. Shares of Nouveau Monde Graphite Inc. jumped nearly 12% following reports of the plan, while Canada Nickel Company saw its stock surge by an impressive 48% this week. Both companies have projects that the government is seeking to fast-track for approval.
Accelerating Strategic Projects and Expanding Stockpiles
Beyond equity investments, the government is implementing multiple measures to secure Canada's access to critical minerals. The approval process is being accelerated for several key mining projects, including Nouveau Monde Graphite Inc.'s phase 2 project in Quebec, Canada Nickel Co.'s Crawford project in Ontario, and a tungsten and molybdenum mine in New Brunswick.
Canada is also expanding its mineral stockpiling program to protect domestic industries from supply disruptions. Hodgson confirmed that Canada has already begun stockpiling scandium and graphite and is actively assessing which other minerals to add to national reserves. "We're doing a whole mapping exercise, looking at what Canada's needs are relative to what Canada's production and sourcing capability is," the minister explained. "Where we see a significant deficit, we will absolutely look at stockpiling as a way to protect Canadian industries and the economy."
This comprehensive strategy aligns with recent G7 initiatives aimed at securing mineral supplies outside of China and mirrors actions taken by the United States, which has also purchased stakes in mining companies this year, including Vancouver-based Lithium Americas Corp. and Trilogy Metals Inc.
