Mobile phones, cameras, computers, aircraft, LEDs, fighter jets, tanks, and satellite communications systems. All these products need one important ingredient. To function, they are all dependent on rare-earth minerals. And one might easily grasp that anyone in possession of resources that are so crucial, has a clear geopolitical edge.
History tells us that there has always been a race to control valuable resources, and a power struggle over these rare earth minerals is unavoidable in the future. And trust us when we say, Canada will be the centre of this colossal geopolitical struggle.
A few weeks ago, Justin Trudeau made the decision to raise the bar for foreign entrance into Canadian vital mining sector. The government intends to toughen laws to make it much more difficult for foreign state-owned enterprises to invest in Canadian critical minerals companies. It added that the transactions involving investments by state-owned corporations into Canadian critical-minerals companies will only be permitted on an “exceptional basis.”
But we had already told you how the Canadian government was too late to come up with this decision. Only after realizing China’s stronghold in the rare-earth sector, Canada is now trying to curb the investments. Harsh truth, but China has already taken over Canada’s mining sector.
Read more: Canada can no longer produce defence equipment without China’s approval
China has built up stakes in more than two dozen Canadian mining companies. According to Bloomberg, Chinese firms have been involved in 89 announced acquisitions and investments in Canadian metals and mining industries over the past ten years. Numerous transactions include businesses connected to the 31 essential minerals identified by Canada.
And this is how China today is leading the upcoming great game for rare earth minerals. China has a stranglehold on the world’s supply of critical rare earth. It has over 38% of the total world’s 385 reserves as well as is the world’s largest producer of rare earth metals, dominating 80% of the global supply for the materials that are essential to much of today’s high-end tech.
China is using them as a political weapon. Even though it has its own reserves, and leads the production race, as a backup plan, Beijing is investing heavily in other countries’ mining sectors, including Canada. Canada, you see, has some of the largest known reserves and resources of rare earth oxides, estimated at over 14 million tonnes in 2021.
So how does Beijing enter foreign markets? Because it effectively uses its state-backed companies, a cheap labour force, and loose environmental rules to seize control.
Over the last 15 years, China has done the same in Canada with Ottawa’s approval. The latest decision by the federal government to kick foreign companies out of their sector has been taken keeping China in mind as they realised it could soon turn into a national security threat. Well, better late than never!
But guess what? Canada ignored its own allies in order to give Beijing a free pass, and this has surely been noted by the same allies. As soon as Ottawa came up with this decision, it’s the US which is now planning to enter the Canadian mining sector.
According to a report by CBC, The United States military has been quietly soliciting applications for Canadian mining projects that want American public funding through a major national security initiative. The United States itself has made attempts to reemerge as a dominant player in a rare earth supply chain, but this aim has been shattered by Beijing.
But to be in the race, President Joe Biden invoked the 1950 Defense Production Act to expand the domestic mining sector, and the military received hundreds of millions of dollars to implement it. Matthew Zolnowski, a portfolio manager for the program stated, “So an investment in Alberta or Quebec or Nova Scotia would be no different than if it was in Nebraska or anywhere else in the United States. As a matter of law.”
Read more: A secret Chinese police force in Trudeau’s Canada
Canadian officials say they’ve already provided the U.S. with a list of 70 projects that could warrant U.S. funding. Clearly, things are moving forward, and as Trudeau plans to kick one key player out of its mining sector, he is inviting another one. And it’s China we are talking about, surely it won’t be easy to kick out China which is already present everywhere in Canada. So a US-China rivalry is bound to take place in Canada. Let’s see whose side it will be on.
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