Canada’s government-backed stockpiles of critical minerals—including lithium, nickel, and copper—are a key part of the country’s energy transition strategy. However, industry leaders warn that without a national network of processing plants, these reserves are essentially useless, as they must be refined abroad before they can support domestic manufacturing.
At the GlobeXchange conference in Toronto, mining executives emphasized the urgent need for processing infrastructure to secure Canada’s economic future. They stressed that domestic critical mineral refining is essential for national security, investment growth, and resource independence.
Strategic Stockpiles Without Processing? “Not Productive,” Says Wyloo CEO
Kristan Straub, CEO of Wyloo’s Toronto-based subsidiary, compared Canada’s critical minerals stockpiling strategy to the U.S. Strategic Petroleum Reserve—highlighting a key distinction.
“Oil can be refined into gasoline, jet fuel, plastics—you name it. But a stockpile of lithium or nickel in Canada today? That has to be sent to Asia for processing, then brought back for use in a battery plant in Ontario,” Straub said. “Developing a strategic reserve, without the capacity to process critical minerals domestically, would not be productive.”
This comparison underscores a major gap in Canada’s mining and refining sector: unlike oil, which can be easily converted into usable products, raw minerals require sophisticated processing plants to become viable for industries such as electric vehicle battery manufacturing and renewable energy production.
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Canada’s Competitive Disadvantage in the Global Critical Minerals Market
Industry leaders warn that Canada is falling behind in the critical minerals race, particularly when compared to competitors like Australia. Both nations share vast hard-rock lithium deposits and strict environmental regulations, yet Australia has already positioned itself as a global leader in lithium processing.
“Australia has turned its lithium reserves into a major industry, producing 86,000 tonnes in 2023—more than Chile and China. Canada? We have yet to produce a gram of lithium outside the lab,” Straub noted.
Due to the lack of domestic processing infrastructure, Canadian mining companies must export raw minerals to foreign refineries, primarily in China. These minerals are processed into battery-grade materials before being re-imported for use in clean energy technologies.
“China has built an entire ecosystem around critical mineral refining, and as a result, they dominate global markets,” said Francisca Quinn, chair of the ESG committee at Canada Nickel Co. “If Canada wants to compete, we need a fully integrated critical mineral supply chain—from mine to finished product.”
Investment in Processing Plants: “Build Low, Sell High”
Another major challenge facing Canada’s critical minerals industry is the slow development timeline for mining projects. According to S&P Global, it takes an average of 27 years for a mine to go from discovery to production—faster than the U.S. (29 years) but lagging behind Australia (20 years).
Despite federal investments, such as the $1.5 billion Critical Minerals Infrastructure Fund, regulatory delays and permitting bottlenecks continue to hinder progress.
“Refineries and processing plants are massive capital projects, and timing is everything,” said Matt McCulloch, head of decarbonization at mining engineers Norda Stela. “You want to build when costs—materials, labor, time—are low, so you’re ready when the market surges. That means taking on capital risk upfront.”
Global Competition and Geopolitical Pressures
The urgency to develop a domestic critical minerals processing sector is further intensified by geopolitical tensions, particularly with China and Russia. Recent discussions between Ottawa and Washington about “joint investments” have raised concerns over sovereignty, as Canada weighs the trade-offs between attracting foreign capital and maintaining control over its natural resources.
“Countries like China and Russia are going to want to control refining and production [of critical minerals] to price out competitors,” Quinn said. “If Canada doesn’t invest now, we risk becoming just another supplier of raw materials rather than a leader in the clean-energy economy.”
Industry experts warn that if Canada fails to act, global critical mineral production could become controlled by an OPEC-style cartel, where a handful of dominant players dictate prices and supply.
The Path Forward: Canada Must Invest in Processing Infrastructure
Some mining companies are already taking steps to address Canada’s processing shortfall. For instance, Wyloo has committed to building Canada’s first low-carbon nickel refinery in northern Ontario. However, industry executives stress that isolated projects will not be enough—a coordinated national strategy is essential.
“Critical minerals are the foundation of the energy transition,” Straub emphasized. “This is an opportunity for Canada to take charge of its resources, create high-paying jobs, and ensure we’re not dependent on foreign processing facilities. We just need to seize it.”
With the global critical minerals market projected to double to $770 billion by 2040, the key question remains:
Will Canada invest in domestic processing infrastructure and establish itself as a global leader, or will it continue exporting raw materials while other nations capture the economic benefits?
