Canada’s energy minister said the country is open to using “all tools available,” including investing in equity securities of mining companies, to protect its access to critical minerals, as the country fights to remain a major player in the global mineral market during Thursday’s multilateral negotiations in Toronto with G7 countries.

As the U.S. government makes its own decisive moves to invest in mining companies and strike bilateral critical mineral trade agreements, Energy Minister Tim Hodgson said Canada is prepared to make deals to supply minerals to manufacturers or other countries, purchase minerals for strategic stockpiles, use mechanisms to stabilize mineral prices and consider tools like debt and equity securities. Allies in the Group of 7—France, Germany, Italy, Japan, the United Kingdom, and the U.S.—plan to follow the same playbook, he said in a press conference late Wednesday.

The comments came ahead of a high-stakes meeting between the countries’ energy and environment ministers, where Hodgson aims to use the last stretch of the country’s G7 presidency to advocate for a Canadian-led Critical Minerals Production Alliance. That pact would secure environmentally responsible critical minerals for G7 partners and try to shield commodity prices from market manipulations. 

Such investments could create a flurry of investor interest. In recent weeks, the U.S. has taken equity stakes in mining companies, including Canada’s Lithium Americas and Trilogy Metals, and started pursuing its own bilateral mineral-trading deals with Australia, Malaysia, Cambodia and Japan. Investors are taking notice. Trade negotiations have triggered volatility in stocks of rare earths companies and driven huge stock price surges for several Canadian companies that have netted U.S. investments.

Asked if Canada would pursue its own bilateral deal with the U.S. on rare earths, Hodgon said, “I’m not going to scoop our conversations for later this week,” but added that “Canada chose to take this leadership role in a multilateral format through the G7. As a middle power, Canada believes the best way to secure these supply chains is to have multilateral agreements.” 

The right deal could reinvigorate Canada’s reputation as a leading jurisdiction for mining financing at a time when geopolitical tensions between the U.S. and China have otherwise dominated the market. 

“Fellow nations are looking to Canada as a resource-rich nation for its vision, expertise and any key announcements that could help shape the global critical mineral and rare earths landscape,” said David Anonychuk, global vice-president of metallurgy and consulting at SGS, who attended some of the week’s events leading up to the G7 meeting.

If Hodgson can reach consensus on a “shared agenda” among the other G7 countries, he said, it could help them pool enough metals for major projects like semiconductor manufacturing, electric vehicle battery plants and wind turbines, which require steady streams of germanium, nickel and rare earth materials. He said Canada hopes to provide allies with important resources currently held in “a chokehold by nations who do not share our values.” 

Canadian policymakers have long worried about China’s market power over such minerals. China refines 92 per cent of the world’s rare earths and has used export controls as a negotiation tactic with the U.S. government, although it agreed to pause those measures for one year as part of a Thursday trade deal. It has nonetheless left smaller countries caught in the  middle. 

“China holds the cards and the cash,” said a briefing note prepared for deputy ministers in March, which warned that Canada should work with allies to secure key minerals or risk giving it “geopolitical leverage.” The briefing note, prepared for a meeting about vulnerabilities in Canada’s Arctic, was obtained by The Logic through an access to information request. 

Prime Minister Mark Carney has since indicated he is open to rekindling an economic relationship with China, though the Investment Canada Act, which regulates foreign investments in the country, would make it difficult for the mining industry to benefit.

While Canada hosts 40 per cent of the world’s public mining companies, the sector has urged Ottawa to boost competitiveness with Chinese conglomerates through equity stakes and defence funding. Companies like Vale and Halifax-based rare earths refiner Ucore said they see the G7 presidency as an opportunity to expand their reach into new markets and improve their “bankability.”

Dominic Raab, a former U.K. deputy prime minister and head of global affairs at mining investment firm Appian, said there are “a lot of stars aligning” for public- and private-sector investment partnerships in the mining industry, and at the moment, Canada is a “huge player.” 

“It’s got a lot of soft power,” Raab said, “So in the G7 negotiations, [it] is very well regarded.” 

With files from David Reevely in Ottawa