Introduction
Global demand for critical minerals is surging with projections indicating a near quadrupling by 2040. In my February 6 article, I reviewed the global scale of mining of critical minerals. In order to secure supply chains, however, the processing capacity of critical minerals is also vital. Processing refers to the midstream phase where raw ores are refined into usable materials – which, in many supply chains, results in a bottleneck. Supply chains are concentrated, particularly in processing stages, raising concerns about security, vulnerabilities, and economic impacts from disruptions. This report examines global processing capacity, with a focus on Canada and the United States, highlighting current capabilities, strategies, and challenges.
Global Overview
Globally, critical minerals processing is highly concentrated, with China dominating most segments. In 2024, China accounted for approximately 70 % of global mining and 90 % of processing capacity of key minerals. [1] It leads in refining for 19 out of 20 strategic minerals, holding an average market share of 70%. [2] For example, China processes over half of the world’s lithium, two-thirds of the cobalt, one-third of nickel, 91% of graphite, and nearly all rare earth elements (REEs). [3] This concentration has intensified, with top three refining nations’ market share rising from 82% in 2020 to 86% in 2024, driven by growth in China for cobalt, graphite, and (REEs). [4]
Battery manufacturing, a key downstream sector, saw global capacity reach over 3 TWh in 2024, with 85% located in China. Recycling capacity also favours China, which captured two-thirds of global growth since 2020. [4] Other notable players include Chile (25% of copper processing) and Malaysia (2nd in REE separation at about 9%). [2] The market value of critical minerals was $328 billion in 2024, and is projected to reach $586 billion by 2032, growing at a rate of 7.53 %. Demand for energy transition minerals like lithium (up 50% in investment), copper, and nickel, is driving this expansion. [5] However, vulnerabilities can arise from reliance on only a few suppliers.
Canada
Though Canada is positioned as a major supplier of sourced critical minerals, with abundant reserves and a stable regulatory framework, its processing capacity is limited. However, it is attempting to realize its potential. According to iea.org, the sector employs 110,000 people in extraction, processing, and related activities. [6] The nation produces over 60 minerals and metals, including major outputs of copper and nickel, with emerging projects in lithium, graphite and cobalt processing facilities. [7] As of 2025, there were 32 critical mineral processing centres, with 8 owned by Canadian parent companies, primarily handling aluminum and other minerals. [8] According to Natural Resources Canada, 27 facilities (6 urban and 21 rural) were operational in 2024, with 4 new ones (3 under construction and 1 in production) added since 2022. [9]
The Canadian Critical Minerals Strategy (CCMS), backed by $3.8 billion in funding, aims to increase domestic production and processing. Targets include a 10%+ production increase for 60% of key minerals by 2030. In 2024, 47% (9/19) of tracked minerals achieved this, including lithium, graphite, and aluminum. [9] However, it is important to note that domestic processing remains small, with raw materials often exported for refining (i.e. to China), due to gaps in midstream capacity. Canada’s government estimates that $20 – 65 billion is required for upstream investments by 2040 in order to open over 30 new mines. [10] Challenges can include long lead times (10 to 15 years for new mines) and China’s 95% control in some processing.
United States
The United States faces a significant reliance on imports for critical minerals, with the USGS List identifying 60 commodities essential to the economy and security. [11] It is 100% net-import reliant for 12 minerals and over 50% for 29 more. [12] Processing capacity is limited, with known operations for beryllium and graphite in 2024, but data is sparse. [13] Even for domestically-mined minerals such as REEs (the U.S. is the second-largest producer of unprocessed oxides), materials are exported for refining due to insufficient capacity. [14]
The U.S. strategy emphasizes reducing foreign dependence through executive orders, funding, and partnerships. [12] Funding includes $355 million for by-product recovery pilots and $275 million for industrial facilities. [15] Progress includes advancements in substitutes, efficiency, recycling (i.e. lithium batteries), and a new economic risk model assessing over 1200 disruption scenarios. International efforts include agreements with Mexico, Japan, and the EU to diversify supply, countering China’s processing dominance. The U.S. will face challenges however that include lengthy permitting, legal hurdles, and high costs. By 2030, the U.S. is projected to still hold less than 2% of the global processing market. [13]
Comparing Canada and the U.S
Both Canada and the United States share strengths in reserves and ESG standards but, compared to global leaders, lag far behind in processing. Canada has more established nickel and cobalt facilities and contributes 1 – 2 % of global lithium / graphite, while the U.S. focuses on REEs and recovery but remains import-heavy. The two nations both require billions in investments and face 10 to 15 year timelines for new capacity. [10] Bilateral cooperation (i.e. through USMCA) could build joint processing, but risks include market distortions and supply shocks from foreign nations. [17]
Conclusion
Global minerals processing is dominated by China, posing risks amid rising demand. Canada and the U.S. are ramping up efforts through strategies and funding to build resilient, domestic capacities. Their success will be a function of overcoming economic, regulatory, and investments hurdles to secure supply chains for a sustainable future. Further integrating partnerships between the two nations is imperative to achieve these goals.
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Sources:
[1] Steptoe.com, https://www.steptoe.com/en/news-publications/stepwise-risk-outlook/the-race-to-decouple-and-diversify-critical-minerals.html
[3] wri.org, https://www.wri.org/insights/critical-minerals-explained
[4] iea.blob.core.windows.net, https://iea.blob.core.windows.net/assets/ef5e9b70-3374-4caa-ba9d-19c72253bfc4/GlobalCriticalMineralsOutlook2025.pdf
[5] datamintelligence.com, https://www.datamintelligence.com/research-report/critical-minerals-market
[7] sciencedirect.com, https://www.sciencedirect.com/science/article/pii/S0301420725002028
[8] hillnotes.ca, https://hillnotes.ca/2025/09/23/the-critical-minerals-supply-chain-building-canadas-resilience-2/
[9] natural-resources.canada.ca, https://natural-resources.canada.ca/corporate/planning-reporting/departmental-results-reports/horizontal-initiative-canadian-critical-minerals-strategy-2024-25
[10] carboncredits.com, https://carboncredits.com/canadas-65b-critical-minerals-challenge-can-it-keep-up/
[11] usgs.gov, https://www.usgs.gov/programs/mineral-resources-program/science/about-2025-list-critical-minerals
[12] csis.org, https://www.csis.org/analysis/new-executive-order-ties-us-critical-minerals-security-global-partnerships
[13] eesi.org, https://www.eesi.org/papers/view/issue-brief-critical-minerals-and-the-u.s-clean-energy-transition
[14] whitehouse.gov, https://www.whitehouse.gov/presidential-actions/2026/01/adjusting-imports-of-processed-critical-minerals-and-their-derivative-products-into-the-united-states/
[15] energy.gov, https://www.energy.gov/hgeo/funding-notice-mines-metals-capacity-expansion-piloting-product-critical-minerals-and
[16] usgs.gov, https://www.usgs.gov/programs/mineral-resources-program/science/about-2025-list-critical-minerals
[17] brookings.edu, https://www.brookings.edu/articles/broad-support-for-prioritizing-responsible-critical-minerals-development/
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