Rare Earth Elements
Québec’s role in loosening China’s grip
Like with many other conversations on critical minerals, the one on rare earths ought to address the Dragon in the room. China currently extracts over 60% of rare earth elements globally and processes 90% of the global supply. REEs, long a focus of geopolitical concern, have gained even more attention due to China's dominant role in their mining and processing and its history of leveraging this control through trade restrictions.
Indeed, while Beijing has long been playing chess with commodities markets, Ottawa and Washington have in recent years been louder in terms of developing their own critical supply chain. In June 2024, Canada blocked a sale of stockpiled REEs mined in its far north to a firm in China. In the coming years, Québec has the potential – and the economic resources – to be at the forefront of North America’s push to loosen China’s grip. In the context of the green energy transition, the question is not if – but rather when – will Québec be able to develop a cost-effective alternative to China’s supply.
Hopes in projects eyeing commercial production of REEs
Québec’s mineral endowment in terms of rare earths is well established. The northern part of Canada’s largest province is home to several deposits, such as Ashram, Strange Lake, and Crater Lake, that have received global traction and investment in recent years. Importantly, while Canada has some of the world’s largest known reserves and resources of rare earths, estimated at 15.2 million t of oxide, Québec is home to the highly valued elements of terbium and dysprosium. And despite a hefty rare earths price correction in 2023 (following China ramping up supply) that saw REEs hitting their lowest point since 2020, several projects in Québec have the potential to put the province on the map of commercial producers before 2030.
In the critical minerals space, experts are betting that the underlying bottom line of the green energy transition is stronger than market headwinds. In that sense, companies have advanced projects to the latter stages of mining development. Commerce Resources made the strategic call to update the PEA at its Ashram deposit to present the total blue sky of the project (one of the largest in scale in North America). The firm will eye production at their facility, before shipping the product to processors such as Solvay potentially in 2028 President and CEO Christopher Grove of Commerce Resources detailed: “An updated PEA will allow us to be re-rated by both the market and the industry in terms of putting a value on the Ashram project and give us a wider range of commercial opportunities in terms of potentially securing an industry partner who recognizes the strong fundamentals of the deposit.”
South of Ashram and consisting of a full suite of light and heavy rare earths (neodymium, praseodymium, dysprosium, and terbium) the Strange Lake project is now fully funded to bankable feasibility study. In 2023, Torngat Metals conducted an extensive confirmation drilling program of 33 diamond drill holes in the B Zone of the Strange Lake Peralkaline Complex. The firm eyes PFS and BFS completion by 2025, and the firm is currently piloting its process at scale to ensure it will work as designed when going into operation.
“When in production, the Strange Lake project will position Québec at the forefront of establishing a rare earths industry in Canada. Québec will thus be a major supply security player for the entire North American and global supply chain.”
Christine Burow, Chief Marketing Officer, Torngat Metals
Pioneering a Canadian rare earths industry
When looking at the technological and military uses of REEs, China’s supply grip is increasingly alarming, particularly in the context of a green energy transition. Beyond production, Beijing also boasts something close to a monopoly in the downstream space. As detailed by Christopher Grove: “China imposed an export duty on REE in 2005, and while it took the WTO seven years to declare that export duty illegal, manufacturers and processors had set up facilities in China to access the cheaper-priced domestic feedstock. These companies included Solvay, the world's largest REE processor, and Hitachi, the owner of the dominant recipe for magnet manufacturing. Over the past 19 years, China has managed to increase its dominance in the REE sector as well as downstream in the manufacturing of magnets.”
Geology is not the problem in richly-endowed Québec. The challenge is that, compared with China, players are often not playing with the same rules. The focus on environmental regulations, community relations, and social efforts that are dear to the province’s operators add financial weight to projects, which makes competition with China difficult, particularly in the current price environment for REEs. But Christine Burow, Torngat’s chief marketing officer, is seeing efforts at the governmental level: “As things stand, China controls the supply market and its low rare earth pricing challenges the economic case for new projects. In Canada and the US, we are seeing governments and industry working together to become less reliant on China while making a major contribution to the global transition to electrification.”
In the race to get projects online in a timely fashion, Québec stands as one of the only North American provinces (besides California, home of the Mountain Pass mine operated by MP Materials) able to offer an alternative to Chinese supply. Both Burow and Grove highlighted the growing support at the federal and provincial level, with Commerce Resources notably applying to receive funding from Ottawa’s C$1.5 billion Critical Minerals Infrastructure Fund. The volume of production from projects nearing construction has the potential to put Québec in a new dimension and to position the province as a major supply security player for the entire North American and global supply chain.
Going forward, market fundamentals suggest a positive outlook for Québec’s rare earths developers. The democratization of electric vehicles is forecast to lead to a fivefold increase in REE demand by 2030, and even higher for heavy rare earths (dysprosium and terbium) essential for high-efficiency, low-carbon technologies. As the West shifts from near-total dependence on Chinese imports to supply diversification, Québec can pull its weight by leveraging its high standards and offering traceable and sustainably produced minerals.
Article header image courtesy of Torngat Metals