Canada, Japan push critical minerals pact with $1bn deals to cut China dependence

Stock image for referential purposes

Canada and Japan are deepening their critical minerals alliance, seeking to reduce their dependence on Chinese supplies. At Canada's largest-ever trade mission to Tokyo and the Asia-Pacific region, companies from both countries signed commercial agreements worth over CAD 1 billion (USD 706.11 million), exploring joint initiatives to secure future supplies of key minerals.

The delegation comprised around 300 participants representing about 180 companies and organisations. Collaboration in areas including mining investments and long-term offtake agreements was discussed, including the potential shared stockpiling of critical minerals like gallium and graphite.

Canada's International Trade Minister Maninder Sidhu confirmed that both countries are evaluating the feasibility of joint stockpiling to improve supply security against future market disruptions. 

The global aluminium casting usage is expected to reach 24.2 million tonnes in 2026. To learn about the future market trends, pre-book our upcoming report “Global Aluminium Casting Market 2026-2032”

Reducing reliance on China

The proposed partnership comes as Japan and Canada attempt to reduce import dependence from China. Almost 80 per cent of Japan's rare earth imports are sourced from China.

China, dominating global production of graphite, gallium and battery-grade materials, accounts for around 60 per cent of global rare earth mining and more than 90 per cent of refining capacity, thereby gaining influence over global supply chains.

These minerals are essential for electric vehicles (EV), renewable energy systems, semiconductors and defence applications, including missile components and advanced electronics.

China dominates supply; supply chain concerns intensify

Efforts to diversify supply have intensified since China began tightening export controls on critical minerals. Restrictions on gallium and germanium exports introduced in 2023 were expanded in 2025.

Moreover, Beijing imposed export controls on several heavy rare earth elements and related products in April 2025. A second round of restrictions followed later that year covering additional rare earth materials, equipment, technologies etc.

The measures have increased concerns among governments and manufacturers over supply security for clean energy technologies, electric vehicles and defence industries.

Earlier this year, China also restricted exports of dual-use products to 20 Japanese companies, further reinforcing Japan's push to secure alternative sources of critical raw materials. 

Unlock key insights from leading companies and experts across the aluminium ecosystem with our e-Magazine - Mine to Market: ALuminium Producers & Manufacturers 2026 

Strategic investments and global shifts

Canadian and Japanese companies are already expanding cooperation in the sector. Mitsubishi, an investor in LNG Canada, is interested in investing in Canada's critical minerals industry to gain access to the Pacific Coast. Meanwhile, Panasonic has already entered an agreement to push initiatives on battery-grade graphite production in Canada.

The Canada-Japan initiative reflects a broader international effort to diversify critical mineral supply chains. A week ago, G7 leaders met in France, agreeing to improve supply chain resilience by reducing dependence on non-G7 suppliers and lowering import rate from such external sources below 60 per cent by 2030.