Canada and Japan are exploring collaboration on critical mineral projects and a potential joint stockpiling plan for key metals, aiming to reduce China's outsized control over the market. Canada’s Minister of International Trade, Maninder Sidhu, revealed the initiative in an interview with Reuters following a Canadian delegation visit to Japan.
“We're offering Japan that avenue to do more with Canada in terms of critical minerals,” Sidhu stated, emphasizing the strategic alignment between the two G7 economies. The move comes as global demand surges for minerals essential to electric vehicles, renewable energy, and defense technologies.
Japanese and Canadian companies have already signed agreements worth more than C$1 billion, signaling concrete progress. These investments target supply chain development for minerals such as lithium, nickel, and rare earth elements, where China currently dominates processing and refining.
The partnership represents a coordinated effort to diversify critical mineral sourcing away from China, which controls approximately 60% of global rare earth production and a significant share of lithium refining. Both nations face pressure to secure stable supplies amid geopolitical tensions and trade restrictions.
While the plan addresses supply chain vulnerabilities, analysts caution that building new mining and processing capacity will take years and require substantial capital. China’s established infrastructure and cost advantages remain formidable barriers to rapid diversification.