Critical Mineral Partnership
Canada and Germany Agree to Cooperate on Critical Mineral Supply Chains
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Canada and Germany have signed a Joint Declaration of Intent on critical minerals, pledging to work together both bilaterally and inside the G7 to break the West's reliance on China. The deal, announced in August 2025, centers on a joint supply chain mapping initiative to find priority opportunities in battery-related minerals. At the G7 Summit in Évian in June 2026, Prime Ministers Mark Carney and Chancellor Friedrich Merz announced the next step: moving from mapping to actual capital investments and stockpiling by the end of 2026.
The stakes are high. China controls roughly 60% of global critical mineral processing and up to 91% of rare earth refining, according to the IEA. Both leaders say that gap must close. Carney put it plainly, saying the goal is to "show the world that countries like Canada and Germany punch above their weight."
How the Canada-Germany Minerals Deal Came Together
The roots of this deal go back to August 2022, when then-PM Justin Trudeau and Chancellor Olaf Scholz signed the Canada-Germany Hydrogen Alliance. Germany's urgency deepened after Russia cut off natural gas following the Ukraine invasion, forcing a rapid pivot to renewables. That energy shock made secure, friendly supply chains a national priority in Berlin.
Canada's new PM Mark Carney pushed things further at the G7 Summit in Kananaskis in June 2025, launching the Critical Minerals Production Alliance (CMPA). Its aim: counter what officials called the "market manipulation" of non-market economies. Two months later, Carney and Merz signed the Joint Declaration of Intent in Berlin, appointing special envoys and kicking off the supply chain mapping work, according to Toronto Sun.
$2 Billion Funds and a Mine-to-Magnets Supply Chain Vision
Canada has backed the partnership with real money. The federal government formalized a $2-billion Critical Minerals Sovereign Fund in November 2025. Germany has matched ambition with its own €1-billion Raw Materials Fund managed by state lender KfW. Energy Minister Tim Hodgson says Canada is building "mine-to-magnets" supply chains designed to "take a card out of the hands" of adversarial regimes.
Companies are already moving. Firms like Troilus Gold and Rock Tech Lithium have signed cooperative agreements with German industrial giant Aurubis AG. Québec signed its own standalone deal with Germany in March 2026 to prioritize provincial mineral processing. Analysts project over $15 billion in economic activity over 30 years from projects linked to the alliance.
Critics Say the Deal Lacks Teeth and Skips Indigenous Consultation
Not everyone is impressed. Industry analysts at MINING.COM argue that roughly 60% of these agreements remain non-binding, with no specific investment obligations. Conservative Leader Pierre Poilievre mocked the energy components, questioning why Canada would ship resources via long global routes rather than building out East Coast infrastructure. Some U.S. officials have also raised concerns about the cost of a Western trading bloc that depends on government price supports, according to National Post.
Environmental and Indigenous groups are also pushing back. Ecojustice and certain B.C. First Nations argue that fast-tracking projects under Canada's new Building Canada Act bypasses the constitutional duty to consult. They say the political drive for speed is overriding environmental review. The tension between urgency and due process may be the partnership's biggest domestic challenge.
Falling Lithium Prices Make Western Investment Harder to Justify
The timing is tricky. Lithium prices have dropped 80% since 2023, making it hard for Western projects to compete without government support. Global demand for critical minerals is still projected to rise 400% over the next decade, but the short-term price crash has cooled private investment. Both governments see sovereign funds and offtake agreements — guaranteed purchase deals — as the bridge to keep projects moving.
Canada also reported a 10% rise in domestic production of nine key minerals, including lithium and graphite, in late 2025. The June 2026 joint statement signals that the next phase will treat these minerals as strategic assets — similar to oil reserves — with national stockpiles to guard against supply shocks. Whether the two countries can turn declarations into drills in the ground remains the open question.
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