By Christopher Hernandez-Roy

February 23, 2026

Just like coal and steel production in the 19^th century, and oil in the 20^th, critical minerals are now keystones of national capabilities, alongside semiconductor fabrication, aerospace, advanced manufacturing, information technology, artificial intelligence and energy.

The relationship between mining and defence is being reshaped by the need for Western countries to rearm in the face of Russia’s threat to Europe and China’s rapid expansion of its military might.

For Canada, it is also about preserving sovereignty in a world now dominated by hegemons. What was once mostly driven by consumer product and energy-transition objectives is now increasingly framed through a national security and industrial-strategy lens.

This shift is accelerating, given the near monopolistic control of some minerals by China, and the country’s use of price manipulation, export controls or outright bans as strategic leverage.

Canada’s new Defence Industrial Strategy (DIS), released on February 17, recognizes that a secure Canadian supply of critical minerals is vital to the defence supply chain and that sourcing it domestically enhances Canada’s sovereignty while at the same time providing economic benefits.

Canada and allied governments are moving to re-anchor mineral supply chains domestically and within trusted networks. Bilateral and multilateral instruments and agreements are increasingly explicit about strengthening the resilience of supply chains and ensuring the secure sourcing of critical minerals essential for defence, rather than regular consumer-market or climate goals alone.

Canada can position itself as a cornerstone of national security and defence-critical mineral supply for ourselves — as the DIS makes clear — but also for our allies. We have reserves of all twelve minerals that NATO identifies as essential for defence manufacturing and active production for 10 of them, in addition to other minerals on the U.S. Department of Defense and EU critical minerals lists.

Trade friction between the U.S. and Canada has accelerated a push to diversify trading relationships and exports, including defence-relevant mineral exports, deepening ties with leading Western economies through the G7 Critical Minerals Action Plan or with Europe, through the Security and Defence Partnership and the SAFE initiative as well as NATO.

In this context, minerals themselves could become a form of defence currency—an alternative pathway for Canada to meet NATO readiness and burden-sharing objectives in the Hague Investment Plan.

While regular consumer demand for critical minerals still drives markets, defence is becoming an increasingly important market signal, but not always a clear one in terms of which specific minerals, in what volumes, and on what timelines defence companies will require them.

The pieces that will make Canada a defence critical minerals superpower are falling into place.

Unlike EV or battery markets, defence-driven demand comes through classified planning, procurement systems, and shifting threat assessments. The strategy promised in the DIS to be unveiled in the second quarter of 2026 to expand the production, processing, stockpiling, and procurement of defence-critical minerals, could provide the necessary market signals to investors, miners and processers.

It should also help address financing constraints including through the new Canadian Critical Minerals Sovereign Fund and the Defence Investment Agency, a core mandate of which is to source critical minerals within Canada.

The recently announced Canadian stockpile of graphite and scandium should be expanded to other defence minerals, at greatest risk of supply disruption, which will not only produce strategic depth in a time of crisis, but can insulate the defence industry against price manipulation.

The government could also offer tax incentives for defence companies to maintain their own stockpiles of critical materials as part of a move to harden supply chains.

Policy and regulatory alignment remain another central challenge in the mining–defence nexus. Defence procurement authorities, industrial policy agencies, and minerals regulators often operate under different mandates, timelines, and levels of risk tolerance.

Even when political consensus exists on the need to expedite the production and refining of defence-critical minerals, this does not necessarily mean faster permitting processes or clearer regulatory decisions.

Recent efforts — particularly through the Building Canada Act and the Major Projects Office — to streamline environmental assessments, centralize approvals for major projects, and accelerate developments deemed to be in the national interest reflect an attempt to reconcile the urgency of the critical minerals industry with the integrity of the regulatory framework.

Processing and midstream capacity represents one of the most acute structural bottlenecks. Investments in rare-earth processing, magnet manufacturing, and recycling illustrate both the opportunity and the difficulty of building midstream capacity fast enough to meet defence timelines and the need to quickly pivot away from adversarial sources.

But progress is being made with the Saskatchewan Research Council’s REE facility, Rio Tinto’s Scandium Production Plant in Quebec, and Ucore Rare Metals Inc.’s facility in Kingston, Ontario, for example.

For miners, all of these dynamics force decisions and also provide opportunities as they navigate both geopolitical and commercial calculations.

Some will remain focused on supplying feedstock, while others may pursue deeper integration as strategic partners to processors, defence companies, or the Canadian government as it seeks to meet the objectives it has mapped out in the Defence Industrial Strategy.

The pieces that will make Canada a defence critical minerals superpower are falling into place.

Christopher Hernandez-Roy is a Senior Fellow and Deputy Director of the Americas Program at the Center for Strategic and International Studies.