First came the chip wars. Now it looks like the critical minerals wars have begun.
As supply chains warp and allegiances shift, the Five Eyes countries — an intelligence coalition of anglophone countries (the US, the UK, Canada, Australia and New Zealand) that traces its roots back to second world war code-breaking — are forming a protectionist huddle, jealously guarding how much foreign interference, or investment, they permit within their borders.
Deteriorating Sino-US relations, alongside disastrous reliance on Russian gas, led Western countries to nervously tot up supply chain dependencies, and it is critical minerals that have come to the fore.
Critical minerals are those increasingly crucial for fuelling the modern world but for which there are no substitutes. Lithium, nickel, cobalt, manganese and graphite are crucial for batteries; rare earths are needed for wind turbines and electric cars; copper and aluminium are the cornerstone of electric networks.
China dominates the supply. According to figures from the International Energy Agency, China accounts for more than 71% of global extraction and 87% of global processing capacity for rare earths.
With a stable supply of critical minerals becoming ever more strategic, consensus is mounting within the Five Eyes countries to leverage their geopolitical alliance to loosen dependence on China and limit the risk of Beijing’s weaponising its tight control over their supply.
Closing ranks
Canada was the first to lower the portcullis. It forced three Chinese firms to divest from Canadian-owned mining firms last November and updated the Investment Canada Act to screen acquisitions of controlling stakes in Canadian critical minerals firms.
In a statement on November 2, minister of innovation, science and industry, François-Philippe Champagne, termed these “investments that pose a threat to our national security and critical mineral supply chains”.
But Canada is not a lone actor. Its role in the Five Eyes alliance means its stance may speak to wider bloc policy.Â