Last year, Ottawa announced its first-ever Critical Minerals Strategy, a program aimed at securing and expanding the access of Canadian companies to certain minerals deemed essential for the economy’s functioning. These 31 minerals, “the building blocks for the green and digital economy,” include: cobalt for jet engines, batteries, and hydrogen fuel cells; gallium for semiconductors, circuits, and LED lights; lithium for electric vehicle (EV) batteries; nickel for EV batteries, aerospace, and electronics; rare earth elements for wind turbines, EV motors, and defense technologies; and zinc for metal alloys and EVs.

Ottawa’s mineral exploration budget is one of the highest in the world. Canada also attracts around one-fifth of the world’s mineral exploration. While gold and copper dominate exploration budgets in Canada, the amount of capital poured into extracting battery metals like lithium, cobalt, and graphite is steadily growing. These critical minerals “attracted roughly double the proportion of the global budget in 2022 versus the 10-year average.”

There are currently 409 active lithium projects in Canada, most of which are not yet producing. Only one-quarter of these projects are in the “advanced” stage, where a significant amount of exploration and drilling has been done.

According to some estimates, the global market for batteries will increase 20 percent annually. The World Economic Forum asserts that “[t]he production of minerals such as graphite, lithium, and cobalt could increase by nearly 500 percent by 2050 to meet the growing demand for clean energy technologies.”

New operations centred around battery metals and Canada’s “sustainable transition” are popping up throughout the country, such as Nouveau Monde Graphite in Québec. Mining officials and government representatives are urging Canada to lead the way in global lithium production. Ottawa is incentivizing mineral exploration across the country, including in the Northwest Territories. Ontario Premier Doug Ford has announced a critical minerals strategy of his own, while pushing for mining development in the north, specifically the Ring of Fire region, where Indigenous resistance is strong.

Meanwhile, Canada and the US are targeting China’s mining industry as part of their new Cold War, which has also seen intensified US warmongering and increasingly belligerent Canadian policies in the Pacific.

In the words of Paul Triolo and Kevin Allison, “Canada—with its abundance of natural resources, including critical minerals essential for making EV batteries, wind turbines, and solar systems work—is now applying a geopolitical lens to the sector in ways that will create risk and opportunity for Canadian firms and investors.”

Around the time that Ottawa pushed several Chinese state-owned companies out of Canada’s mining sector, the US military announced it will fund mining for critical minerals on Canadian territory. As Alexander Panetta writes, this “illustrates how Canadian mining is becoming the nexus of a colossal geopolitical struggle.” And, it should be added, there are no illusions as to where Ottawa’s loyalties lie.

Despite its hostile policies toward Beijing, Canada continues to import huge amounts of computers, electronics, machine parts, and more from China, much of which need critical minerals to be produced. As such, Canada and other Western countries have a high import dependency on China. The announcement of Canada’s critical minerals plan occurred in this context: one in which Canadian elites are aiming to reduce mineral dependency on China, while the US continues to raise tensions in the Pacific with provocative military drills, arms sales, and base expansion in Taiwan, Japan, the Philippines, and elsewhere.

Anastasia Ufimtseva, a program manager with the Asia Pacific Foundation of Canada, has said that there is an interest in government and business to move away from Chinese products, but it is a difficult task given the extent to which the West embraced post-Mao China as the proverbial factory of the world. “Despite a lot of countries saying… we want to establish alternative supply chain structure,” she explains, “it’s costly and difficult to switch if your business was established, you have your suppliers. It will take such a long time to find alternatives to build that infrastructure.”

While Russia, China, Iran, and other non-Western nations expand their cooperation in the areas of energy, electronics, military, and more, so are Canada and the US deepening their collaboration, pushing for more critical mineral exploration on their own territory, Latin America, and Africa. As CEO of American Lithium Simon Clarke said in a recent interview with the Canadian Mining Journal:

[G]overnments in Canada and the US have ultimately recognized that we must develop this domestic critical industry with countries that would be part of a Western supply chain… The governments have done a lot recently, especially with the recent incentives announced by the Canadian government and the Inflation Reduction Act in the US, which is a positive step towards helping to incentivize not only domestic production, but that Act also has the potential to apply to countries like Peru and other countries to help make sure that we can secure the supply. The amount of lithium and other critical minerals we need to make this transition is huge.

American Lithium has significant investments in Peru, including the Falchani lithium project, which is the sixth largest hard-rock lithium deposit in the world. This led Clarke to defend the right-wing forces that overthrew elected President Pedro Castillo in December 2022, in what the Canadian Mining Journal interviewer accurately describes as a coup d’état.

In Clarke’s words: “I know that the [Boluarte] government… is looking to bring forward early elections later this year… Peru is a big mining jurisdiction. Mining is protected in the constitution. There may be some calls from the left to nationalize mining, but that cannot be done under the constitution.”

According to polling company IEP, 69 percent of Peruvians agree that the country needs a new constitution. However, the unelected Dina Boluarte government responded to a national uprising in favour of new elections and a constitutional assembly with massive military force, killing almost 70 civilians and injuring close to 2,000.

Clarke also neglects to mention that, before his removal, one of Castillo’s main goals was to convene a constitutional assembly to rewrite the Peruvian constitution, which was implemented under the far-right dictatorship of Alberto Fujimori.

The formation of a “Western supply chain” cannot be achieved with minerals solely from Canada and the US. That would be controversial enough given the often deleterious social and ecological effects of mining operations in Canada (particularly for Indigenous communities). No, the building of this “Western supply chain,” and the concomitant “decoupling” from China, relies on Canadian and US mineral extraction in countries like Peru, where profit-driven mining companies are allowed to operate with little to no consideration for the local and environmental consequences of their projects.

This is something that is totally lost in conversations about decoupling from China: it will mean more US and Canadian extractive investment in the Global South, specifically Latin America and Africa, which will bring more dispossession, more surveillance and state repression, more degradation of local ecologies, and more anger toward the Canadian and US governments.

For example, access to critical minerals influenced Ottawa’s shameful response to the massacres and political repression in Peru. Despite Boluarte having an approval rating of 15 percent, and with the Congress that removed Castillo having a 91 percent disapproval rate, both have “the full support of the US, Canada, and foreign mining corporations.”

At the same time, Ecuador’s embattled President Guillermo Lasso, whose approval rating sits between 12 and 14 percent, has retained Ottawa’s support because of his concessions to mining capital. Despite the nationwide uprising against his mismanagement of the country, which has set Ecuador on track for its most violent year on record, and his prioritization of foreign mining capital over the needs of his own citizens, Trudeau is behind Lasso. This is because, even though Indigenous-led resistance movements have called for more restrictions on foreign mining and greater environmental protections, Lasso has spurned their demands.

The Canada-Ecuador free trade agreement (FTA) is another factor in Ottawa’s support for the discredited Lasso government. If implemented, the FTA will greatly expand the power of Canadian companies in Ecuador by allowing them to sue Quito in a private tribunal for interfering with their ability to earn profits. Companies often sue national governments when the governments introduce higher tax and royalty rates, or introduce new protections for the environment and human rights.

The US and Canadian governments are also working hard in Guatemala to ensure that the Fenix nickel mine transfers to a Canadian company. The mine is currently owned by a Switzerland-based investment group called Solway, although it has been sanctioned by the US for alleged “Russian influence peddling.”

Previously owned by Canadian companies Inco (from 1960 to 2004), Skye Resources (2004 to 2008), and Hudbay Minerals (2008 to 2011), the Fenix mine has been a constant site of struggle for environmental and Indigenous rights. During the period of Canadian ownership, the Guatemalan state responded to Indigenous resistance at the mine with extreme violence including murder, rape, and the burning of homes, without any condemnation from Canada’s government.

Now that the mine’s current owner has been sanctioned, and Canada and the US are concerned with building a supply chain that can sideline Chinese industrial inputs, Ottawa and Washington are once again interested in Fenix. This led to a Newsweek report that the US government is intervening in Guatemala to ensure that the Canadian company Central America Nickel (CAN) acquires the nickel mine from Solway at a “substantial discount.”

At the same time, Ottawa and Washington are contending with an upsurge of “resource nationalism” in Mexico under President Andrés Manuel López Obrador (AMLO). The Trudeau and Biden governments are currently trying to hinder AMLO’s attempts to increase Mexican state sovereignty over oil and gas, electricity, and mining.

Canadian mining investments in Mexico are valued at $9 billion, ranking seventh overall in Canadian mining assets abroad. Mexico is also a top ten global producer of several minerals that the Canadian government has identified as critical for its “green and digital economy,” including zinc and graphite.

AMLO’s left-wing policies, however, have had an unwanted impact on the ability of Canadian and US companies to extract the profit and resources they want from Mexico. In addition to strengthening the state’s role in Mexico’s energy market (leading to confrontation with Ottawa and Washington under the CUSMA), AMLO has nationalized his country’s lithium and announced plans to form a lithium association with other countries in the region that produce the resource, namely Argentina, Bolivia, and Chile.

Furthermore, AMLO’s government has proposed an overhaul of the mining industry that reduces the role of private foreign investment and expands state protection of the environment. The Mexican government’s goals are threefold: “to restore state control over Mexico’s mineral and water resources; to regulate the granting, maintenance, supervision and termination of mining concessions; and to protect human rights, the environment and human health.”

In the context of the ongoing energy dispute between Mexico on the one hand and the US and Canada on the other, AMLO’s mining reforms are likely to provoke an aggressive response from the rest of North America. As journalist Nick Corbishley writes:

Both Washington and Ottawa have already threatened to take Mexico to dispute resolution settlement over the AMLO government’s energy reforms and proposed ban on imports of [genetically modified] corn. Now, the AMLO government wants to radically change the rules of the game for Mexico’s hugely lucrative mining sector, which is a major source of industrial metals and other minerals for global manufacturers. In other words, one can expect fierce resistance to the proposed reforms as they make their winding way through the legislative branches.

Canada’s Trade Minister Mary Ng has “expressed concern” about Mexico’s mining reforms on multiple occasions. In a recent statement, Ng specifically noted that AMLO’s mining reforms would “have impacts on [North America’s] supply chain resiliency.”

Reforms like these are obviously one reason why AMLO is facing so much negative press coverage in the rest of North America. If he continues interfering with the ability of Canadian and US companies to invest in Mexico on their own terms—a key component of the incipient “western supply chain”—we will likely see more demonization of AMLO and perhaps direct electoral interference against his MORENA party in next year’s presidential election.

With Chile announcing that it too will nationalize its lithium industry, and the potential for resource nationalism in left-leaning governments like Gustavo Petro’s Colombia and Lula’s Brazil, Canada and the US will face many challenges as they aim to impose the terms of their “Western supply chain” on the region.

In Africa, too, Canada has sought to increase resource investments to recover from its drift away from China and Russia. Of course, Canada is primarily interested in the ability of Canadian companies to profit from investments.

At the Mining Indaba, an annual conference hosted by South Africa, Canadian officials work to put mining companies in contact with friendly African governments, such as Zambia’s, which offer low taxes and royalties and few labour and environmental protections. At the 2022 Indaba, several speakers from large Canadian companies spoke about Russia, the war in Ukraine, and how their interest in African minerals grew following the invasion—an indication of how Canadian companies are pushing for even more investment in the continent as geopolitical blocs form between East and West.

In the post-Cold War period, Canadian governments negotiated Foreign Investment Protection Acts (FIPAs) in African countries, which give corporations the right to sue governments for interfering with their investments. The Harper government negotiated FIPAs with 15 African countries, some of which were signed or announced at mining conventions. Meanwhile, Justin Trudeau announced negotiations for a FIPA with Ethiopia in 2020, and later signed an FIPA with Nigeria.

In the case of South Africa, Canadian companies and diplomats interfered during the transition out of apartheid to ensure that mineral resources were not placed under state control.

In 2009, Congolese president Joseph Kabila withdrew the Canadian company First Quantum’s rights to a copper mine in Congo’s east. Harper immediately began lobbying against the Congolese government with the IMF, the World Bank, and other international investors, and even threatened to prevent the country from restructuring debt accrued under the Mobutu dictatorship until Kabila backed off.

In a more recent case, the Trudeau government intervened in Tanzania to prevent a ban on gold concentrate exports that would have eaten into the profits of Canadian company Barrick Gold.

It is clear that, throughout Africa, Ottawa has responded to countries that seek to gain more national control over their mining industries with political meddling.

Of course, the spectre of resource nationalism is always hovering, and even in friendly countries the transnational industry remains concerned about public demands for a greater domestic role in their nation’s mining.

It is important to remember these facts when officials in Ottawa and Washington speak on the importance of “decoupling” from the Chinese economy. When it comes to critical minerals, Canada and the US are dead set on replacing China’s supply with reserves elsewhere, namely Latin America and Africa. Given the exploitative way that US and Canadian mining functions in the Global South, “decoupling” means more exploitation of these regions, more undermining of state sovereignty, and more conflict with those who oppose selling out their mining industries to foreign capital.

Owen Schalk is a writer from Manitoba. His book on Canada’s role in the war in Afghanistan will be released by Lorimer in September. You can preorder it here. To see more of his work, visit www.owenschalk.com.