BMO Financial Group vice-chair warns of a potential critical minerals crisis

Vital Metals became the first rare earth producer in Canada by starting ore production from the Nechalacho project in the Northwest Territories in June 2021. Credit: Vital Metals

One of the unexpected repercussions caused by the covid-19 pandemic was the impact it had on global supply chains, pushing up the price of commodities and resources across the board, including within the mining industry. The cracks in the supply chains also highlighted broader geopolitical issues affecting world economies, including the reliance on limited sources of extracting certain minerals and refining them. And at the top of the list of commodities deemed of strategic importance are critical minerals.

With most of the critical minerals being produced and refined in a handful of countries, including China, Indonesia and the Democratic Republic of the Congo, governments and industries in Canada and the United States have become more active in seeking to secure a more stable North American supply chain.

One of those who has been a vocal proponent of creating a stronger critical minerals supply chain between the two countries is David Jacobson, vice chair of BMO Financial Group and the former U.S. Ambassador to Canada in President Barack Obama’s first term (2009-2013). Ambassador Jacobson spoke to The Northern Miner about challenges, opportunities and the potential for a critical minerals crisis.

The Northern Miner: Why do you think it’s important for Canada and the U.S. to address the critical minerals issue?

David Jacobson: Well, I think that the time is right. You just had an election in Canada, the government in the United States is relatively new, so both sides are still feeling each other out as to how they’re going to relate to one another. This issue is as important as any other we’ve seen since covid highlighted the impact of disruptions on supply chains. And perhaps the most critical of those supply chains, to coin a phrase, is critical minerals. The computers that we’re talking over, our cell phones, our cars, our batteries, our smart grids that we want to develop, everything makes use of these critical minerals.