Vast reserves of critical minerals mean little for sovereignty without domestic capacity to process and refine them. 

That’s one of the main messages relayed by experts from different sectors in a House committee study on critical minerals and national defence. 

“Having minerals in the ground does not secure our future; only producing them does,” said Jeff Gaulin, Vice-President at Vale Metals.

“Everything else flows from that: refining, manufacturing, trade and security.” 

Similarly, Canadian businessman Jim Balsillie, founder of the Centre for International Governance Innovation, told the committee Canada won’t be able to use its critical minerals strategically unless it develops processing capabilities. 

“Owning critical minerals…is the beginning of leverage but in and of itself, it is not leverage,” he said.

“We have no sovereignty to turn these minerals into products. It’s an abdication that no other country in the world has done. We must reorient,” he said.

Photinie Koutsavlis of the Mining Association of Canada puts it in business terms: “The challenge Canada faces is not a lack of critical mineral resources; it is a concentration risk and an execution risk.” 

China’s near-monopoly on refining and magnet production, paired with its tightening export controls, creates real vulnerabilities for advanced economies, she warns. 

“At the same time, Canada has lost multiple smelting and refining facilities,” said Koutsavlis, adding that output for several key metals is lower than it was a decade ago. 

“This matters, because many defence-related critical minerals are recovered through smelting and refining processes, often as co-products, rather than produced directly at the mine.” 

Refineries aren’t competitive 

Gaulin said Canada is not extracting enough minerals to make refineries economically viable. 

He told the House committee that Vale mined 80,000 tonnes of nickel last year, but still had to import 16,000 to make its refineries operate efficiently. 

“Think on that: We had to import nickel to Sudbury, home to the second-largest nickel sulfide deposit in the world,” he said. 

Vale recently announced a partial sale for its nickel mine in Thompson, Manitoba, raising $280-million to keep the operation going. 

When asked if the company intended to revive smelting capacity there, Gaulin said no decision had been made yet. 

“That’s something the new owners are looking at. There’s no commitment at this point. I think it’s about stabilizing operations and increasing production,” he said. 

Agnico Eagle’s Sean Boyd tells the committee creating an environment where companies want to invest in processing will take time. 

“I think there are quick wins looking at older operations that already have permits,” he said. 

“But processing is really about the economics,” added Boyd, specifying that, historically, successful Canadian processing facilities have been built around big base metal mines. 

Heather Exner-Pirot, director at the McDonald-Laurier Institute, also stated that processing and refining capabilities are a real issue. 

She said the focus of defence policy should be on gallium, germanium, graphite and rare earths — not on nickel or lithium.