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As Global Tensions Rise, the Buildout of an Integrated North American Critical Minerals Supply Chain is Coming into Focus

Amidst growing tensions between the United States and China, the United States is stepping up its friend-shoring efforts in an attempt to diversify its critical mineral supply chains. Recent trade deliberations with Japan and the European Union have yielded a free trade Critical Minerals agreement to strengthen supply chains with Tokyo and will likely lead to a similar accord between Washington, DC and Brussels.

Perhaps the most natural ally for the United States, is to our north – Canada.

Both countries have in recent years explored ways to partner up in their efforts to secure critical mineral supply chains, and have deepened and formalized their cooperation in this field in the context of the 2020 Canada-U.S. Joint Action Plan on Critical Minerals and various multilateral forums, including the Sustainable Critical Mineral Alliance launched at the end of last year, and the Minerals Security Partnership launched in June of 2022.

While many country-to-country communiques never make it past the bureaucratic boilerplate, the U.S.-Canadian relationship is “more than metaphorical” and “[u]nlike any of America’s other allies, Canada has long been part of a special relationship, linking the two country’s defense industrial bases as one” with the defense union dating back to the months preceding America’s entry into World War II, as ARPN’s Daniel McGroarty phrased it in a 2018 piece for Investors Business Daily. 

In a plea for greater bilateral critical minerals cooperation in the fall of 2021, former U.S. ambassador to Canada David Jacobson wrote in the Globe and Mail:

“We are in a race against time, and we cannot always count on the competition to play fair. Americans and Canadians have historically pulled together for the good of both nations in times of challenge. Such times are coming. Let’s once again plan for, face and beat this new challenge by together establishing our place in the global supply chain.” 

His call was echoed by U.S. Senator Joe Manchin (D-WV), who in the summer of 2022 suggested that the U.S.-Canadian energy and critical minerals partnership be strengthened “to ensure [the] free world’s energy security and address climate change.”

The bilateral partnership has been given a new boost with President Joe Biden’s visit to Ottawa last month, during which President Biden and Canada’s Prime Minister Justin Trudeau celebrated the two countries’ “progress under the Roadmap for a Renewed U.S.-Canada Partnership over the past two years and reaffirm our historic alliance, steadfast friendship, and commitment to overcome the daunting challenges of today and realize the full potential of the relationship in the future.”

The Joint Statement by President Biden and Prime Minister Trudeau specifically affirmed both parties’ commitment to creating “a strong, environmentally responsible and resilient North American critical minerals supply chain,” and the mutual goal of “identifying, securing and developing critical minerals extraction, processing, manufacturing, and recycling opportunities in both countries to diversify supply chains essential to clean energy, electric vehicles, semiconductors, aerospace, and defense, among other sectors (…).”

It further announced that the recipients of the $250 million of Defense Production Act Title III funding to mine and process critical minerals for electric vehicle and stationary storage batteries would include both U.S. and Canadian companies to be announced this spring.

With geopolitical tensions on the rise, the trade dimension of critical mineral resource policy is coming more and more into focus and the importance of building an integrated North American supply chain is increasing.  However, as ARPN and others have consistently argued, the United States cannot just rely on partners to meet U.S, critical mineral needs, the United States “also needs to contribute our part to a North American minerals alliance”, as Sen. Manchin phrased it.

As ARPN previously argued:

“Let’s do it. Let’s build out an integrated North American supply chain for critical minerals where possible — but let’s also not forget that closer cooperation with our friends and allies AND strengthening domestic resource development should not be considered mutually exclusive strategies.”