By D.L. Bowles
On July 20 President Trump announced a 50% tariff on a wide range of Canadian exports to include steel, dairy, electronics and paper that were to take effect on Aug. 22. On Aug. 21 bilateral trade talks hit an impasse when Canada refused to give the U.S. a blanket right of first refusal (ROFR) on critical minerals, leading the Canadian Prime Minister to walk away from the talks. On Aug. 24, Trump announced a 50% tariff on Canadian autos, automotive parts and steel with an effective date of Jan. 1, 2027. On Aug. 25, three days after Trump’s tariffs took effect, Canada announced a dollar for dollar counter tariff on over $27 billion of U.S. imports.
In the back and forth rhetoric that followed, the Premier of British Columbia, David Eby called for blocking U.S. access to Canadian critical minerals as retaliation for U.S. tariffs on lumber and other sectors. Doug Ford, the Premier of Ontario warned that Canada could cut off supply chains for critical minerals. Ford said the U.S.”won’t get a grain of sand out of Ontario.”
The upcoming $150 million Greenmet Rupert Rare Earth Project that was announced on July 1st will be a processing facility to extract rare earth minerals, primarily from coal waste. In addition to the coal waste on site, the “hub and spoke” project will receive feedstock materials from Cameroon, Greenland and Canada. The feedstocks from West Virginia, Cameroon and Greenland will yield rare earth elements used in items such as magnets, semiconductors, microchips, cathodes and defense related materials. The feedstocks from Canada will yield high purity manganese, which is a core component to strengthen steel and create advanced aerospace alloys. Canadian feedstocks will also produce manganese sulfate, which is a critical precursor chemical needed for EV, Lithium, and Nickel Cobalt batteries.
While critical minerals are presently exempt from the 50% tariff, a Canadian ban on exporting them remains a possibility. According to a report from Inside U.S. Trade, Canada is treating its mineral deposits as national security leverage rather than freely traded commodities and if they should limit outbound mineral shipments to pressure Washington, the Rupert facility could lose its primary international “spoke.”
If Canada were to ban export of raw manganese feedstock, the Rupert plant would still have feedstock from the other “spokes” (Cameroon, Greenland, and West Virginia). While not producing the elements for batteries would certainly reduce the company’s footprint and impact, the contingencies built into a “hub and spoke” system/business model would likely help the company to succeed. GreenMet was contacted for comment but has not responded as of press time.
