(Bloomberg) -- Canada wants its allies to explore a pricing floor for critical minerals to address what it views as market interference from China, the dominant supplier of metals key to the energy transition.
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Canada has been thinking about supporting investment through measures such as pricing floors to address alleged market manipulation, the country’s Natural Resources Minister Jonathan Wilkinson said Wednesday at an event in Washington. Such measures should factor in an accounting of environmental and labor standards associated with production, he said.
“We in Canada and in the United States are not going to go into a downward spiral on labor standards in order to compete with China,” he said during the event, hosted by the Wilson Center. “But we need to acknowledge that we do have labor standards that do add costs — and so that has to be built into this conversation around pricing.”
China has a dominant role as a producer and processor of minerals found in everything from electric vehicles, batteries, solar panels and technology including military hardware. Such dominance has the US and allies scouring the globe for alternative sources and weighing trade and policy measures to reduce dependence on China.
Wilkinson said he wants to work with other Group of Seven nations to make pricing support initiatives a possible “centerpiece” of discussions when Canada hosts the G-7 Summit in June. This could be expanded to other nations like Australia, he said, adding that nickel dumping has caused “enormous problems for our Australian friends.”
To build mines and secure resources, investors will need “some degree of certainty that the products that they’re actually producing are going to have value at the end of it,” Wilkinson said. “If China can simply intervene and crater the price, you will never see the development of the critical minerals that we have to.”
The Canadian minister said he has had talks with the Biden administration as well as members of the US Senate and Congress, and he hopes to engage with Trump’s team. Under Biden, officials had considered using federal funds to support US critical mineral projects, setting a price floor and then paying the difference when market prices fall below it in limited circumstances, Politico reported in August.