Canada holds significant rare earth element (REE) deposits and is developing domestic processing capabilities to reduce the world's dependence on Chinese REE refineries, which currently control over 90% of global processing. Canadian REE projects focus on both mining new deposits and developing separation and refining technology that can produce the high-purity rare earth oxides needed for permanent magnets in EV motors, wind turbines, and defense systems.
REE processing matters because these elements are genuinely irreplaceable in many high-tech applications, and the concentration of processing in China represents a strategic vulnerability for Western democracies. The magnets used in every EV motor, every wind turbine generator, and many defense systems depend on neodymium, praseodymium, dysprosium, and terbium — all currently processed almost exclusively in China.
Canada's strategic position in REEs is strong in terms of geological endowment but underdeveloped in processing capability. The critical minerals strategy specifically targets REE processing as a priority, and partnerships with the US and allies (through the Sustainable Critical Minerals Alliance) provide both demand signals and potential co-investment. Success here would fundamentally reshape the geopolitics of clean energy supply chains.