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Canada - U.S. Strong, Smart, Strategic Approach to Reduce Mineral Reliance from China

By Anjiline Sirsikar

Canada and the U.S. are joining hands in an effort to reduce dependence on China for rare- earth minerals. It is widely acknowledged that China continues to monopolize the market, and jeopardize other companies’ chances of operating by increasing production and driving startup companies out of business. This tactic of China has long been tolerated by its foreign counterparts.

Counterefforts must be made by Canada and the United States to reduce reliance from China for rare earth minerals. At a joint meeting earlier this year, President Trump and Prime Minister Trudeau agreed to negotiate a joint strategy on mineral collaboration. U.S. intends to expand its effort by recruiting its allies, who share similar U.S. concerns regarding mineral dependency on China.

The realization of this joint effort comes after China threaten to restrict critical materials to U.S. A tactic applied previously by China in its disputes with Japan. In 2010, Beijing single-handedly, restricted mineral exports to Tokyo, in a disputed conflict over islands.

The “joint action plan” is said to be a work in progress, and will be presented to the incumbent Canadian Prime Minister, according to a federal briefing document obtained by The Globe and Mail. Furthermore, this joint plan is said to include appropriate funding for mineral projects and strategic investments related to rare – mineral extractions in Canada.

With a heightened rise in uncertainty across both sides of the geographical border, and in the general global sphere. Indicating President Trump’s impeachment on the horizon, while Canada awaits the announcement of their next incumbent Prime Minister. The tension continues to mount, as it is deeply concerning to know that China now dominates the world market for cesium production and supply.

Cesium products is widely used in military, aerospace, chemical and medical fields. Last year, the U.S. department listed cesium minerals as being crucial for the U.S. economy and national security. The U.S. critical mineral lists of 2018 consist of six minerals for which Canada was a top supplier for the United States. The six-minerals listed here included; aluminum, cesium, rubidium, indium, tellurium, uranium all of which are mainly used in industrial applications.

In recent years, Chinese firms not only gained stakes in Canadian firms that extract the minerals related to chromium – a key ingredient in stainless steel and lithium, but have also claimed state ownership by purchasing a cesium mine in eastern Manitoba.

Sinomine Resource Group owned and operated by China, trumpeted their Canadian acquisition, claiming how they now dominate the world market for cesium production. It is also worth knowing that China purchased the Manitoba mine, and the associated processing and recycling plant from U.S. based Cabot Resources. Surprisingly, this transaction was approved by both the U.S. and Canada governments.

This mineral collaboration opportunity with United States is an opportunity Canada cannot, and should not miss. Canada needs this strategic partnership with United States to spur investments towards mineral projects. Simultaneously, increase prospects for job creation and economic growth across Canada and other industrial sectors. This strong, smart, strategic collaboration will strengthen ties among both countries, and spur long term economic gains.

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