Caught in a critical minerals crossfire

What happened: China added new export controls for critical minerals and batteries last week, adding five more minerals to its export list and new restrictions on refining technology.

It’s the latest escalation between China and the U.S. - one that’s drawing Canada into the crossfire.

The details: China first introduced export controls for 12 critical minerals back in April, and now adds holmium, erbium, thulium, europium and ytterbium to the list. Exports of technology for refining rare-earth metals will also be restricted.

Foreign-owned companies using Chinese materials or equipment will need a license to export - even if production happens outside China.

Limiting exports is likely a bargaining chip in upcoming U.S.-China trade negotiations, but highlights the important role that critical minerals now play in geopolitics.

Why it matters: China controls 90% of global rare earths processing - a vital bottleneck for climate technologies like solar panels and EVs, but also semiconductors and defence tech.

Canada has ambitions to become a leader in critical minerals and battery supply chains, tapping into abundant natural resources, a strong tech sector, and existing mining industry.

But the strategy is facing an increasingly polarized world: China is wielding its processing and manufacturing strengths, while the U.S. is doubling down on securing North American supply chains, taking equity investments in Canadian companies like Trilogy Metals, Lithium Americas, and Electra Battery Materials to secure access to critical minerals.

The bottom line: Power plays by the U.S. and China highlight the urgency - and fragility - of Canada’s critical minerals ambitions. If Canada wants to be a leader, it needs to turn high-level strategies and frameworks into concrete financing tools, supply deals, and permits that drive the industry forward.

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