What are critical minerals and the Ring of Fire?

The Public Policy Forum’s recent report on critical minerals, Mission: Critical Minerals, describes a “once-in-a-generation” resource race to mine and produce minerals that will be essential to everything from electric vehicles (EVs) to solar panels and defence technologies.

Canada is rich with these minerals, like lithium, cobalt and nickel, but there are big challenges ahead, including market volatility, potential Chinese market manipulation, and regulatory and infrastructure hurdles.

Drawing from the report, authored by PPF Fellow Mark Cameron, we answer some key questions about critical minerals in Canada:

What are critical minerals? 

Critical minerals form “the foundation upon which modern technology is built.” They are the raw materials used in everything from smartphones and solar panels to electric vehicle batteries and medical devices.

Global demand for critical minerals is expected to grow explosively in the coming years, driven by the deployment of EVs, renewable energy, energy storage and other low-carbon technologies. For example, demand for lithium, cobalt and copper could increase almost fourfold by 2030. By 2050, lithium demand alone may surge over 1,500 percent, with similar leaps in demand projected for nickel and cobalt. Overall demand for these critical minerals could increase sixfold by 2040.  

By mid-century, the market value of minerals needed for the energy transition is projected to reach around US$400 billion annually, exceeding the value of all coal mined in 2020. This booming demand presents an enormous economic opportunity for countries that can supply these materials. There is “no energy transition without critical minerals,” as the Canadian Critical Minerals Strategy notes — without these inputs, we cannot build the batteries, motors or renewable generators that a net-zero world requires.

Furthermore, with the rapidly accelerating role of artificial intelligence in the Canadian and global economy — and the rapid buildout of AI infrastructure — critical minerals are necessary for everything from microprocessors to fibre optic cables to the copper wire used in data centres. 

Where do critical minerals come from? 

A handful of countries dominate production of key critical minerals. For instance, the Democratic Republic of Congo provides about 70 percent of the world’s cobalt, China produces around 60 percent of rare earth elements and Indonesia supplies 40 percent of nickel.

Processing and refining are even more concentrated, with China refining roughly 90 percent of rare earth elements and 60 to 70 percent of global lithium and cobalt. Such concentration leaves the world exposed to supply disruptions or export restrictions. Indeed, price volatility has already become a hallmark of these markets. In 2010, for example, a sudden Chinese embargo on rare earth exports caused prices to soar by over 10-fold within a year, disrupting the electronics, automotive and other industries. 

What about Canada? 

Canada is exceptionally well-positioned to benefit from this boom. A recent assessment by TD Economics estimated the in-ground value of Canada’s known reserves of just six key critical minerals (lithium, cobalt, nickel, copper, graphite and rare earth elements) at over $300 billion. These reserves place Canada among the top 10 globally for each of those minerals by size. For example, Canada holds approximately 3 percent of world lithium reserves, 2 percent of cobalt and graphite, and 1.7 percent of nickel. 

Beyond raw resources, Canada brings other strengths to the table. It has a long-established mining industry with a skilled workforce and mining services companies that operate globally. Canada is home to nearly half of the world’s publicly listed mining and mineral exploration firms (albeit many of them small cap players) and has deep expertise in finding and developing mineral projects. It also boasts strong environmental and labour standards, which can make Canadian critical minerals attractive to buyers seeking ethically sourced inputs.  

Is there an agreed-upon list of critical minerals? 

Governments and international organizations maintain lists of what they consider “critical minerals,” and these lists can differ based on national priorities and resource profiles.

Canada’s critical minerals list (updated in 2024) contains 34 minerals and metals. It includes not only exotic elements like rare earths and lithium, but also more common ones like copper and potash, which Canada deems critical for the clean economy and food security. Notably, Canada added copper to its critical minerals list, recognizing copper’s “foundational” role in electrification (wiring, motors) and the risk of future shortages.

The United States’s critical minerals list has historically had some differences with the Canadian approach. For instance, the U.S. did not include copper on its list for many years, reasoning that it had domestic production and friendly suppliers like Chile. However, with surging demand projections and greater geopolitical uncertainty, the U.S. Geological Survey expanded its list to 50 minerals in 2022 and U.S. officials have signalled they may add copper to the country’s list of minerals considered critical to align with allies.

This divergence underscores how criteria differ between countries: the U.S. emphasis has been on import dependence and supply risk, whereas Canada’s criteria require both supply risk and “a reasonable chance of the mineral being produced in Canada.” Thus, Canada’s list focuses on minerals for which it could realistically develop domestic supply. 

At the multilateral level, NATO has identified a much narrower set of critical raw materials specific to defence needs. In 2023, NATO released a list of 12 “defence-critical” raw materials essential for military technologies. These include aluminum (for aircraft), graphite (for tanks and submarines), cobalt (for superalloys in jet engines), rare earth elements (for guidance systems and electronics), titanium, tungsten and others. 

What is the Ring of Fire?

Discovered in the early 2000s, the Ring of Fire has been called one of Canada’s greatest mineral prospects, potentially a region that could supply key materials for 100 years. It is a remote 5,000 km² region with abundant chromite (for stainless steel), nickel, copper, platinum group metals and more.

Despite its promise, progress in the Ring of Fire has been exceedingly slow. Development has been bedeviled by infrastructure uncertainty, permitting holdups, and concerns over the rights of Indigenous communities.

Infrastructure deficits are paramount: the area lies about 500 km northeast of Thunder Bay, Ont., with no all-season road or rail links. Year-round access is impossible without new roads — currently, heavy equipment and supplies must be flown in or trucked over winter ice roads, a tenuous option shrinking each year as the climate warms.

Ontario has committed nearly $1 billion toward “critical legacy infrastructure” — principally a network of three all-season roads, totalling about 360 km, to connect the region to the provincial highway system. However, building in the roadless muskeg wetlands is expensive and slow, and construction has yet to begin in earnest.

In 2020, the province and two First Nations (Marten Falls and Webequie) agreed to plan a Northern Road Link, and environmental assessments are ongoing. Still, as of 2025, the road has not been constructed. The latest timeline aims for road construction by 2027, with a hope of having the first mine (Eagle’s Nest nickel) operational by 2030. This means roughly a two-decade gap from discovery to possible production.

The long delays have had real costs: investors lost patience, and the federal and provincial governments at times diverged on priorities. By late 2022, the federal government signaled other critical mineral projects might take priority over the Ring of Fire, given the sensitive wetlands and unresolved concerns from Indigenous communities.

In June 2025, Ontario Premier Doug Ford said the province planned to designate the Ring of Fire a special economic zone “as quickly as possible.”

Multiple Environmental Assessments are required for roads and mining projects, and a federal–Indigenous regional impact assessment is now underway to evaluate cumulative environmental effects in the Ring of Fire. While proper scrutiny is important given the sensitive peatland ecology and the rights of local Indigenous communities, these processes have introduced uncertainty and delay. There are nine Matawa First Nations in and around the proposed mining area, meaning that consultation and consent are a prerequisite for development. Only in recent years have agreements started to materialize (such as Indigenous-led road planning and the January 2025 regional assessment agreement), but these represent initial steps in a long process.

These issues are not unique to this project. A 2024 survey of mining stakeholders ranked permitting delays as the top barrier to Canadian critical mineral projects, followed by the lack of infrastructure in remote regions. In the Ring of Fire, the convergence of those hurdles — difficult geography, infrastructure gaps, intensive regulatory reviews and the need for Indigenous partnership — has meant that a decade of attention has yet to translate into development on the ground.

What can Canada do get ahead? 

Our Mission: Critical Minerals report has three main recommendations: Build strategic mineral stockpiles, set price floors and launch innovative financing supports. For more details, read the full report.