Canada and Allies Tackle Critical Minerals Dumping
Canada’s Response to Global Market Manipulation
Canada, alongside its Five Eyes Alliance partners (the U.S., Britain, Australia, and New Zealand), is actively addressing the issue of price manipulation and dumping in the international critical minerals market. This practice involves flooding the market with critical minerals at below-cost prices, undermining domestic producers and threatening national security.
Dumping by Large Producers
Two major players in the critical minerals market, China and Indonesia, have been accused of engaging in dumping practices. Their dominant positions have enabled them to drive down prices and threaten the viability of Western companies. Nickel, a crucial mineral used in electric vehicle batteries, has experienced a drastic decline in value due to this flooding.
Friendshoring and Collective Responses
To combat this threat, Canada and its allies are considering “friendshoring” their critical minerals supply chain. This strategy involves prioritizing trade with countries that align politically and economically. By reducing reliance on potentially hostile actors, the Five Eyes nations aim to ensure their economic and national security.
Minister Freeland’s Address
During the recent First Nations Major Projects Coalition conference, Canada’s Finance Minister Chrystia Freeland emphasized the government’s commitment to tackling this issue. She stated that Canada’s critical minerals sector, which includes 31 designated critical minerals, is vital for future energy and technology transitions.
Western Producer Pressures
The dumping of critical minerals has significant impacts on Western mining companies. First Quantum Minerals Ltd. of Canada, Glencore PLC of Switzerland, and Wyloo Metals Pty Ltd. of Australia have all closed or idled mines due to the depressed prices. BHP Group Ltd., the world’s largest mining company, recently estimated that half of global nickel production is operating at a loss.
Government Measures
Canada has introduced tax credits and investment incentives to attract global car makers and boost the domestic critical metals and electric vehicle supply chain. Additionally, the government is exploring collective responses with its Five Eyes partners. These measures could include tariffs or other trade restrictions to level the playing field.
Conclusion
Canada’s active response to critical minerals dumping reflects the country’s commitment to protecting its national economic and security interests. By collaborating with allies and implementing strategic measures, Canada aims to create a resilient and sustainable supply chain for these essential resources. The ongoing efforts emphasize the importance of fair and competitive trade practices in the global market.