VRIC: Refining, not mining, is West’s security bottleneck

National security is reshaping Western mineral policy, speakers told the Vancouver Resource Investment Conference on Sunday – and the critical-minerals choke point is no longer in the ground, it’s in the refineries and processing plants needed to turn ore into usable material.

Retired U.S. Army Col. Douglas Macgregor and former Canadian defence minister Harjit Sajjan, speaking Sunday on separate panels, both framed processing as the strategic vulnerability – and China’s dominance in key downstream supply chains as the pressure point forcing North America to rethink industrial policy.

“They process 90% of rare earths,” Macgregor said, describing the situation as “not a supply chain, that’s a hostage situation.”

For miners and investors, the processing pinch point matters because it can determine whether projects reach production at all – and whether governments begin supporting parts of the value chain through incentives, price supports, or strategic procurement.

Five Eyes file

North America will have to compete directly with China on cost and reliability, Macgregor argued, suggesting that subsidized energy may be part of making new refining capacity viable at scale.

“There are plenty of places on the planet that have rare earths,” he said. “The bottleneck is not rare earths. It’s refining.”

More than 8,000 investors attended the VRIC this week. Credit: Henry Lazenby

The critical minerals file moved up Ottawa’s agenda as allies examined vulnerabilities in defence supply chains, Sajjan suggested in a fireside chat. China’s lead in processing left Canada and its partners exposed, calling for a more deliberate effort to build capacity at home.

Sajjan pointed to the Five Eyes – the intelligence-sharing alliance among Canada, the United States, the United Kingdom, Australia and New Zealand – as a forum where security concerns around supply chains were discussed at the highest levels.

Before leaving government, Sajjan said policymakers were discussing support for domestic refining technologies and whether governments should “guarantee certain prices” to help companies withstand commodity cycles and compete with entrenched offshore capacity.

Silver policy mismatch

Discussions also turned to silver – a metal with a long monetary history but rising relevance to industrial and technology uses.

On the de-dollarization panel, Vancouver-based analyst Jennifer Shaigec noted that the U.S. is the largest importer of Canadian silver and pointed to Washington’s decision to classify silver as a critical mineral as a shift with implications for North American supply expectations.

Canada’s critical minerals list, updated in 2024, does not include silver – a divergence that could become more conspicuous if the U.S. uses its “critical” designation to inform procurement, stockpiling or industrial policy.

Shaigec has been watching Canada’s decision not to follow the U.S. on silver and suggested that “critical” designations can carry geopolitical expectations about who supplies whom in a crunch.

Another panellist, economic journalist Taylor Kenney, stressed silver’s “dual role” and argued that its industrial demand profile is underappreciated in conventional commodity narratives, particularly as governments prioritize technologies and defence-linked supply chains.

Macro messages

VRIC’s macro panel reinforced why the conference’s strategic-minerals message resonates with about 8,000 attending investors.

On the “Bullish Markets, Broken Signals” panel, economist David Rosenberg argued that headline gross domestic product can mask underlying weakness, highlighting what he described as a gap between spending and incomes.

From the right: Col. Douglas Macgregor, Jennifer Shaigec, Taylor Kenney on-stage at the VRIC this week. Credit: Henry Lazenby

Macroeconomist Nomi Prins pointed to heavy debt burdens and the cost of servicing government borrowing as constraints that can pressure policymakers toward easier financial conditions. Adam Taggart, the founder and host of Thoughtful Money, described a “K-shaped” economy in which affordability strains remain acute even as asset markets hold up for higher earners.

A key takeaway from the panel: if governments leaned harder on industrial policy and security-driven supply chains, capital can follow the policy signal – especially where projects have clear pathways from resource to processed product.

Canadian downstream

For Canadian companies trying to build processing and refining capacity, future financing will hinge less on geology than on certainty. Developers will need bankable offtake with creditworthy buyers, a credible plan for low-cost and reliable power and realistic permitting and construction timelines that match the complexity of building a plant.

Just as important, lenders will look for policy that reduces risk – support that turns “strategic” into something measurable, such as the kind of price guarantees Sajjan referenced or other mechanisms that stabilize cash flow.

Bottom line: the next critical-minerals fight may be decided less by drill results than by who controls the middle of the supply chain – and whether Canada and the U.S. are willing to pay, politically and financially, to rebuild it.