Scandium oxide, often used in aerospace and 3D printing.
China is expanding its export controls on minerals used in strategic industries as part of its retaliation against U.S. tariffs, putting Canada in a position to potentially fill some of the void.
U.S. President Donald Trump on Wednesday hit China with additional 34-per-cent tariffs, on top of the 20-per-cent levies he had already imposed. The assault on China is part of Mr. Trump’s global suite of “reciprocal” tariffs targeting countries his administration perceives as treating the U.S. unfairly.
Beijing on Friday fired back, announcing its own tit-for-tat tariffs of 34 per cent on all imports of U.S. goods. But it also announced new controls on the exports of rare-earth minerals, including scandium, samarium, gadolinium, terbium, dysprosium, lutetium, and yttrium to the U.S.
Rare earths – a subset of critical minerals – are mined in extremely small quantities worldwide and are known for their magnetic, fluorescent and conductive qualities. The minerals have specialized uses in the tech sector, robotics, low-carbon power and military applications.
China is the dominant global supplier of rare earths while the U.S. is a bit player, so the export restrictions put some American industries at risk of supply shortfalls. A prime example is the rare-earth yttrium, a vital input in electronics and the aerospace industry. The U.S. imports 93 per cent of its yttrium from China, according to the United States Geological Survey, leaving it with few options for alternative supply.
For some of the rare earths targeted by the new Chinese restrictions, the U.S. has other potential suppliers, notably in scandium, and Canada could become a key supplier. Anglo-Australian miner Rio Tinto PLC produces some scandium at its titanium plant in Sorel-Tracy, Que. At the moment, the scandium operation is a commercial-demonstration plant, meaning it is not yet producing large amounts of rare earths. If it can reach its potential, Rio predicts the plant can produce three tonnes of scandium oxide a year, which would account for about 20 per cent of the global market.
The biggest uses of scandium are in aluminum-scandium alloys used in the aerospace industry and solid-oxide fuel cells used for powering satellites and space capsules. Currently, Japan, China and the Philippines are the chief suppliers of scandium to the U.S.
Scores of junior miners are also trying to develop rare-earth projects in Canada, but the timelines to production in most cases are measured in years and depend on proving the economics, securing customers, and raising huge amounts of capital.
Montreal-based Torngat Metals Ltd. is developing the Strange Lake project in the remote Nunavik region of northern Quebec, which contains deposits of dysprosium and terbium, two of the rare earths that China has put U.S. export restrictions on. The privately held Torngat hopes to start production in 2028.
While China has about a 69-per-cent share in the mining of rare earths, on the processing side it is even stronger, controlling about 95 per cent of the market.
Canada has made some inroads on the processing side. The Saskatchewan Research Council, a provincially owned scientific research facility, operates a plant in Saskatoon that can process neodymium, praseodymium and samarium, and hopes to supply the U.S. military. Samarium is used in missile guidance systems, stealth technology and F-35 fighter jets.
China’s restrictions on rare earths exports follow an even more aggressive move in December, when it halted exports of three critical minerals to the U.S., antimony, gallium and germanium.
While the U.S. used to rely on China for about 23 per cent of its germanium needs, Canada supplies roughly the same amount to the Americans. Vancouver-based Teck produces germanium dioxide at its Trail smelter in British Columbia and it is the only Canadian supplier to the U.S. Teck’s germanium is produced as a byproduct from zinc it mines at its Red Dog mine in Alaska. Germanium is used in fibre optics, infrared night vision systems and solar panels. Owing to germanium’s importance to the North American critical minerals supply chain, Natural Resources Minister Jonathan Wilkinson in January proposed that Canada join forces with the U.S. to invest in Teck’s Trail operation.