A mineral supply chain may begin with geology, but it ends with power…The big challenge remains beyond meaningful public engagement. If one succeeds in mining commercial quantities of critical minerals, where do they go next? Before they can be used in any project for electrification, high technology, defence, or other deployment, they must be refined. The truth here is that minerals extracted in Canada are largely shipped overseas, almost always to China, where they will be refined for sale to end users…The dependence is not merely overwhelming; it is structural. China alone controls approximately 85% of global rare earth elements’ (REEs) processing capacity, refines 73% of the world’s cobalt, 59% of lithium, and 68% of nickel. For some minerals, the concentration is even more extreme…The gap between extraction and value-added processing is more than a missed opportunity; it is an ongoing transfer or economic rent and strategic control out of the country. Mineralized material shipped offshore entrenches this dependency…Rising demand for materials increases Canada’s exposure and reliance on foreign processing and supply. Electrification, data centres, artificial intelligence, and defence onshoring all lean directly on processing capacity that Canada does not control…Even with concerted effort now supporting a handful of new facilities, the urgent need for a broader approach is evident. A project or two does not build systemic capacity, and without systemic capacity, the commercial and national security threats persist unabated…While Canada is floating ideas, the U.S. is starting to underwrite outcomes. Deals with price floors, stockpiles, and long dated financing priced near treasury rates reflect a recognition that critical minerals are crucial infrastructure, not just commodities. Canada has yet to make that leap.

Critical minerals are mined all over the world but the majority of the supply ends up passing through China. For a broad range of key metals and minerals, China is either the largest miner, the dominant refiner, or both. This is true for rare earths, lithium, cobalt, graphite, nickel, and many other metals and minerals that are essential to defense, energy and high-tech applications. It is less about where ores are dug out of the ground and more about where they are turned into usable components. In other words, Chinese processing plants are essentially the gatekeepers of global supply…China built those downstream industries at scale over decades through state support and investment. The result is clear — China has effectively monopolized refining for most critical minerals while the rest of the world depends on it for much-needed supply…Put simply: control of smelters and refineries is the chokepoint…Many minerals that are mined in other countries are still processed into a refined product within China. That clear advantage lets Chinese policy shifts ripple quickly through global supply and pricing — a growing threat for the West…In fact, China has already weaponized its stronghold on the industry in ways that have triggered both concern and action from the United States government. Over the past couple of years, Beijing has imposed a series of export restrictions on critical minerals that have sounded alarms in Washington…This caused semiconductor and defense firms to scramble for alternatives while exposing how dangerously dependent manufacturers are on Chinese supply…These actions have shaped how Western governments view critical minerals. What were once perceived as simply commodities are now seen as strategic assets crucial to national defense. U.S. officials have become increasingly vocal about reliance on China for critical minerals and the associated risks, prompting government action to reduce exposure. These maneuvers include billions of dollars of investment into domestic production, executive orders empowering the Defense Production Act to boost U.S. mining and refining, and coordinated international initiatives to strengthen supply chains outside of China.