Domestic scandium and graphite are among the critical minerals Ottawa plans to stockpile as it moves to secure Canada’s supply chain and support G7 allies amid growing concerns over Beijing’s dominance of the market.
Energy Minister Tim Hodgson announced last week, along with G7 partners, new initiatives to secure critical mineral supply chains and reduce dependencies in a market widely dominated by Beijing. Ottawa said these include stockpiling critical minerals to “further safeguard Canada’s national security and sovereignty,” but did not specify which ones.
Quebec-based Nouveau Monde Graphite, with which Ottawa entered an offtake agreement as part of its recently announced measures, said the deal with the federal government includes the option to stockpile graphite, which is widely used in electric car batteries, solar and wind technologies, and the defence sector. An offtake agreement involves Ottawa buying a set amount of a mine’s production.
“Our agreement provides the capacity to stockpile or to market into domestic markets, depending on the Government’s priorities and directives,” Julie Paquet, the company’s spokesperson, told The Epoch Times.
Greg Frame, senior communications adviser to Hodgson, confirmed to The Globe and Mail that Ottawa plans to stockpile graphite, and that scandium is another critical mineral the government intends to include in its strategy.
He said the scandium will come from part of the output of Rio Tinto, a British-Australian mining and metals company with which Ottawa also recently signed an offtake agreement. Scandium is widely used in the aerospace, automotive, and defence industries. Rio Tinto owns the only scandium production plant in North America, located in Sorel-Tracy, Que.
China dominates the global production of both graphite and scandium. Ahead of announcing the critical minerals pact with his G7 counterparts, Hodgson said Canada intends to be a leader in securing critical mineral supplies for its allies to reduce dependence on China.
Allied countries have in recent years raised concerns over China’s dominance in the production of critical minerals, which are key for a wide range of industrial sectors. China had become the world’s leading refiner by 2023 of key minerals, refining more than 90 percent of global rare earth materials and producing about 69 percent of the world’s rare earth output.
Ottawa plans to earmark $2 billion over five years for a critical minerals sovereign fund, which will make strategic investments in projects and companies through equity stakes, loan guarantees, and offtake agreements, according to its 2025 budget, released earlier this week.
Ottawa says that by stockpiling critical minerals, it aims to strengthen domestic capabilities vital to national defence, secure supply chains for its own and allied defence industries, support Arctic sovereignty, and advance NATO’s deterrence and defence objectives.
Rio Tinto on Nov. 1 announced that Ottawa, through the Canada Growth Fund, would invest approximately $25 million to support scandium production at its Quebec facility, thereby “strengthening Canada’s critical minerals supply chain.”
The company also noted it had entered into two commercial agreements with Ottawa, including an offtake agreement and a commitment to assist with marketing and storing scandium on behalf of the government.
Likewise, Nouveau Monde Graphite (NMG) announced on Oct. 31 the signing of an offtake agreement with Ottawa, describing it as a significant step toward securing supplies of the critical mineral for allied countries.
“NMG stands as a strategic player for supporting energy autonomy, national security, and manufacturing efforts of governments and industries across the Western World,” said Eric Desaulniers, the company’s CEO.
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