For the past two years, the Unites States has made an effort to decrease its dependence on foreign mineral imports while encouraging domestic miners to provide these minerals. The America First mining program designated 35 products that were important to the national and economic security of the country; China currently dominates the production of many of these important minerals, including aluminum. China is the world’s largest producer of aluminum with a yearly production capacity of roughly 36 million tons.
With tensions rising between China and the U.S., the United States is eager to enter into trading relationships with other countries to compensate for the mineral production deficit caused by ceasing trade relations with China.
Canada seems to be at the top of the list of trade partners for the U.S. This may be because Canada also dominates production of many of the minerals that the U.S. is looking for. For instance, Canada is among the top-five producers of cobalt and has the most productive potash mines globally. In 2018, the Canadian mining industry was valued at $47 billion. In addition to this, there are considerable geopolitical and financial incentives to forming a holistic North American mineral supply chain.
With these incentives in mind, the two nations have worked to establish a holistic mineral supply chain. Last year, Presidents Justin Trudeau and Donald Trump cosigned such a project. In June of this year, Seamus O’Regan, the Canadian Natural Resources Minister confirmed that an action plan was in place that would ensure North American mineral independence and maximize the mining output of both the U.S. and Canada. This plan would help in recovery after the coronavirus pandemic.
It is fortunate for both nations that their already established relations means that both the political and physical infrastructure is in place for this agreement to bear results. This infrastructure is important in meeting the quickly changing mineral demands on both sides of the border. A U.S. Geological Survey paper that was published in 2017 discovered that critical mineral annual production had grown over the last 40 years, from a 21% growth in production of tin to a 2,800% growth in production of gallium.
A Natural Resources Canada spokesperson stated that this project was a great opportunity for the U.S. and Canada to develop value-added downstream industries and strengthen their capacities to transform metals and minerals.
The spokesperson also highlighted that processing and production challenges may impede the development of the holistic supply chain. Despite the vulnerability this economic collaboration would pose to both countries, Natural Resources Canada is optimistic that these challenges can be overcome. Department officials explained that both governments would have a role to play in ensuring responsible discovery, processing and development of critical minerals. They then added that the agreement could also be used as a motivating factor for the implementation of various domestic mining programs.
One mining company you should watch is GoldHaven Resources Corp. (CSE: GOH) (OTCQB: ATUMF). The company specializes in acquiring as well as developing mineral-rich properties. It recently announced the acquisition of seven gold projects in the Maricunga Gold Belt, found in Chile.
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