Canada and the UK Announce New Critical Minerals Supply Chain Dialogue

As Canada and the United Kingdom ramp up their transition to clean technology, the two nations signed the Critical Minerals Supply Chain Dialogue on Monday. This follows the development of similar critical mineral strategies that are aligned on values, starting with the UK policy paper published in July 2022 and the Canadian strategy released in December 2022.

The global demand for critical minerals will likely quadruple by 2040, according to the International Energy Agency while evaluating the mineral requirements to reach the goals of the Paris Agreement. Canada is a key player in this global race for minerals with deep resources of 60 different minerals and metals at 200 mines across the nation. The country also contains almost 50% of the world’s publicly listed mining and mineral exploration companies.

Access to these critical minerals will determine a country’s ability to compete in the approaching net-zero economy. In a potentially defensive measure against China’s upper hand in minerals, Canada tightened the rules around foreign state-owned investments in Canadian companies. Officials recently ordered Chinese companies to divest their holdings in three Toronto-listed lithium companies.

Jonathan Wilkinson, Canada’s Minister of Natural Resources, did admit in a quote to Reuters that there are still some critical minerals processed largely in China, so measures against China will happen over time in conjunction with the increased supply of alternative options from more trusted international allies.

“Canada and the United Kingdom share similar goals and values,” said Wilkinson. “By collaborating on the development of the critical mineral supply chains that we need to achieve our net-zero future, we can reinforce global energy security, advance the fight against climate change and ensure significant economic opportunity and support good jobs on both sides of the Atlantic. Today’s announcement is a step forward toward a sustainable and secure clean energy ecosystem.”

Their shared objectives include:

• Cooperation on skill-sharing, research, and supply chain innovation among their national industries, academia, governments, and shared international allies
• Integration of safe supply chains for critical minerals between Canada and the UK, as well as shared supply chain resilience analysis
• Promotion of higher ESG performance across the entire critical minerals supply chain

The agreement between Canada and UK mirrors a similar pledge between the UK and Saudi Arabia to develop new sources of critical minerals, while also building on rigorous transparency and environmental standards. The pledge with Saudi Arabia states that the UK cannot meet all of its critical mineral needs domestically, so partnerships like this are essential for strengthening their supply chain.

Other Western countries are also focused on setting up supply chain resiliency among allies, reducing dependence on authoritarian governments like Russia and China. For example, the United States is pursuing trade pacts on critical minerals with the UK and Japan, in hopes of creating a “critical minerals buyers club”. This movement began at COP15 in Montreal when the Sustainable Critical Minerals Alliance was formed to increase environmentally sustainable and socially responsible mining, processing, and recycling practices, and responsible critical minerals supply chains. Led by Canada, the alliance also included Australia, France, Germany, Japan, the UK, and the US.

“Critical minerals are the backbone of a net-zero future, and we are positioning Canada to be a trusted supplier for our allies and the world. We cannot abandon our principles in pursuit of a net-zero economy,” said Steven Guilbeault, Canada’s Minister of Environment and Climate Change. “The signing of the alliance sets a high bar among member states that mining activity meets the highest environmental, social and governance standards, including respecting the rights and knowledge of Indigenous Peoples.”