Critical minerals such as lithium, nickel, and copper, among others, are the backbone of modern technology – they’re used in smartphones, electric vehicle batteries, artificial intelligence, as well as defense systems and equipment.  

As the race for these minerals intensifies, securing North American supply chains will be crucial to economic competitiveness and resilience. 

During a panel discussion that I moderated at the third annual US-Canada Summit hosted by BMO and Eurasia Group, entitled “Ties that Bind – Supply Chains, Critical Minerals, and Building a More Resilient North America”, it became clear that there’s no single solution to the challenges ahead. It will take a collective effort to build the kind of resilient systems we need, along with diversification and regulatory reform. 

I was joined on stage by:  

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  Abigail Hunter, Executive Director of the Center for Critical Mineral Strategy at SAFE 

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  Oskar Lewnowski, Founder and Chief Investment Officer of Orion Resource Partners 

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  Rahim Suleman, President and CEO at Neo Performance Materials 

I began the conversation by asking each panelist to identify the biggest vulnerabilities and what needs to happen to make critical mineral supply chains more resilient. Here were a few of the things that stood out to me during our conversation. 

It’s well known that much of the rare earths and critical minerals the U.S. and Canadian economies rely on come from China, but Rahim Suleman of Neo put that risk into perspective. The challenge isn’t only that China mines most of the critical minerals, it’s also that most of the processing has slowly moved to the country as well, including minerals mined in other countries. 

Roughly 60% of the critical minerals and more than 90% of the magnets are produced in China, he said. “Then the challenge becomes, what do we do next about that, and where are the risks?” he asked.  

For Orion’s Oskar Lewnowski, it will be essential to ensure that there is enough supply from a secondary source so that the dominant player can’t control the market. “Resilience is the ability to make sure that any supply chain can deal with the monopoly power that China currently uses,” he said. 

While China is the leader in processing minerals, it also has a grip on upstream production, added Abigail Hunter at SAFE. “We’re dealing with a geopolitical, political competitor who’s not only got monopoly power, but monopoly power in their purchasing of these materials. That can have distorted effects on the markets and can undermine projects as they’re getting going,” she said.  

To create a second source of supply, governments could offer price guarantees to encourage domestic production, thereby giving non-Chinese suppliers enough time to scale up and compete effectively.  

Hunter, while critical of price supports, agreed that for specific markets, “it does behoove the government to intervene to make sure they can weather a kind of a low-price storm for a time period.” She favors private sector-government collaboration to build resilient supply chains. 

The question around price supports is “incredibly complex,” Suleman added. “I think there’s different solutions for different problems, and maybe there’s targeted areas where some level of price support for some period of time might make sense,” he said.  

Despite the challenges, I shared the panel’s optimistic view about the strength of our markets.  

In addition, public-private partnerships may be a way to strengthen critical mineral supply chains in North America. “I think the public sector brings both capital but also risk-reducing geopolitical cover and permitting relief,” Lewnowski said. “The private sector brings a laser focus on return of capital and on making sure that the projects that are funded are the ones that are the most economically resilient to deal with.” 

Suleman agreed, saying, “I really think that the idea of private-public partnerships is key to this.” He applauded the G7’s work in actively seeking solutions to reduce concentration risk. 

Lewnowski also noted that technological solutions for mining would enable countries like Canada and the U.S. to leapfrog the existing Chinese energy-intensive processes, although they’re still in the pilot stage. 

While Canada and the U.S. can both play an important role in reducing the concentration risk around access to critical minerals, there are obstacles. Obtaining permits to build mines has been an obstacle for critical mineral supply chains in Canada and the United States, Lewnowski suggested.  

Getting projects built in North America takes significantly longer now than it did 20 years ago. “Getting a regulatory framework to be more sensible than it is now is the key issue to deal with,” he said.  

Hunter, meanwhile, emphasized the need for traceability and transparency, and said countries should band together and try to ensure there’s a collective movement toward not rewarding highly subsidized, lower-standard supply.  

“Until we shine a flashlight – a giant flashlight – on where we get these materials today and go beyond the reliance of trust between our sub-tier suppliers to each other and the end users, we’re not going to fully be able to have security of supply and reward good actors,” she said.  

Critical minerals are the building blocks of digital innovation and national security. That’s why making the industry’s supply chains more resilient is a priority. Our discussion made clear that greater diversification aligned with market principles and regulatory reform to strengthen efficiency will help advance our shared economic and security interests in North America.