The Tanco Paradox

"How a foreign-held mine became the test case for Canada's quiet, sovereign battery ecosystem."

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A Chinese-owned lithium and cesium mine in Manitoba looks like a contradiction at the heart of Canada’s critical minerals strategy. On a long enough horizon, it isn’t — but only because of what’s quietly being built around it.

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A reader wrote in after last week’s piece on Mark Carney and the Wilkinson appointment, and the question landed exactly where I hoped it would: if this Prime Minister is operating on the long horizon, how on earth do we explain the Tanco mine?

It’s the right question. It’s also one of the cleanest tests of whether the framework I laid out — Carney as a Stratum VIII operator working a 30-year arc while the press gallery covers him on a 30-hour one — actually holds up against a hard case.

So let me walk through the file. Then let me show you what the Carney government has actually been doing in the eleven months since taking office, because the contrast between the daily coverage and the structural reality is genuinely something to behold. By the end, I think the apparent contradiction dissolves — but it dissolves into a sharper picture, one that reflects very poorly on a couple of actors who have so far escaped meaningful scrutiny.

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What Tanco actually is

The Tantalum Mining Corporation of Canada — Tanco — sits on the northwest shore of Bernic Lake, about 130 kilometres northeast of Winnipeg, between Whiteshell and Nopiming provincial parks. It has operated, on and off, since the 1920s. Today it is the only consistently producing lithium mine in Canada. It is also one of the world’s most important sources of cesium, drawing from the Tanco pegmatite — a 2.6-billion-year-old geological formation that holds the largest known deposit of pollucite on the planet, roughly two-thirds of global reserves.

This is not an ordinary mine. This is a geological singularity. There is no other deposit like it anywhere on earth.

In June 2019, Sinomine Resource Group — a publicly traded, Beijing-headquartered, Shenzhen-listed Chinese mining company — bought Tanco from the American chemical giant Cabot Corporation for roughly $135 million plus a ten-year lithium royalty. The Trudeau government did not subject the transaction to a formal national security review under the Investment Canada Act. At the time, Tanco was understood primarily as a cesium and tantalum operation. Lithium was an afterthought.

Three years later, the world had changed. In late 2022, Ottawa abruptly ordered three Chinese firms to divest from other Canadian lithium juniors — Power Metals, Ultra Lithium, and Lithium Chile — citing national security. Tanco was not touched. Sinomine quietly restarted lithium production at Bernic Lake in October 2021 and began shipping spodumene concentrate directly to China to feed the world’s largest battery supply chain.

That’s the contradiction the reader is pointing at. And it gets sharper.

The Manitoba angle, and why it deserves a harder look than it’s getting

In 2024 and 2025, Sinomine moved to expand. The company sought — and received — a new provincial environmental licence to continue and intensify operations at Bernic Lake. In a 2023 Globe and Mail interview, Sinomine had floated the idea of partially draining Bernic Lake to access more of the orebody from an open pit. That specific proposal was not formally part of the licence application, but it framed the political atmosphere around the file.

Opposition was substantial and substantive. The Manitoba Métis Federation, the Bird River Cottage Owners’ Association, and downstream residents filed four separate appeals against the new licence, citing concerns about water quality in the Bird River watershed, road safety, and the integrity of an ecosystem sitting on the edge of a provincial park. Forty-nine submissions were filed during the licensing process.

In July 2025, Premier Wab Kinew’s NDP cabinet issued an order in council allowing the environment minister to dismiss all four appeals.

I want to slow down here, because most of the coverage has not.

This was an NDP government — the party that has spent two decades positioning itself as the natural defender of Indigenous rights, environmental protection, and resource sovereignty — using a cabinet order to shut down four citizen and Indigenous appeals against a Chinese state-adjacent mining operation seeking to intensify extraction next to a provincial park. The appeals went, by statute, to the same minister whose department had issued the licence in the first place. There is no independent environmental appeal body in Manitoba. The Clean Environment Commission, which could have heard these appeals at arm’s length, was not used. Critics of the process — including former Manitoba environment officials — have pointed out that the province does not name appellants, does not publish their concerns, and does not respond to those concerns in any substantive public way.

The Kinew cabinet’s stated reason for dismissal was that “concerns were addressed during the licensing process.” That is the kind of administrative phrase that closes a file without answering a question.

There is a charitable read on Kinew, and I’ll give it to him because I think it’s partly true. Tanco employs about 150 workers in southeastern Manitoba, most of them in Lac du Bonnet and Pinawa — communities with limited economic alternatives. Closing or disrupting the mine would inflict real damage on real households. The cesium produced there is genuinely globally scarce. The provincial economy needs the activity. A premier who shut Tanco down to make a national security point would be making it on the backs of his own constituents.

That’s the charitable read. Here’s the harder one.

The NDP did not have to dismiss the appeals via cabinet order. It could have referred them to the Clean Environment Commission for an independent hearing. It could have required a substantive public response to the Métis Federation’s concerns. It could have used the licence renewal as leverage to extract enforceable commitments on water monitoring, downstream impacts, and Indigenous consultation. It could have done any number of things that would have been politically harder but procedurally honest. It chose, instead, the path of administrative closure.

And it did so with respect to a Chinese-owned mine, in a moment when both the federal government and the broader allied bloc are explicitly trying to reduce Chinese leverage over Western critical mineral supply chains. The optics are bad. The substance is worse. A New Democrat premier signed off on dismissing Indigenous and environmental appeals against a Beijing-headquartered firm that ships ore directly to China, in the middle of a global realignment, on the grounds that the licensing process — a process whose appeal mechanism runs back to the same desk that issued the licence — had already addressed everything that needed addressing.

You can make the economic argument for keeping Tanco open. I made it above, and I think it holds. But you cannot make the argument that the appeals process was honoured. It wasn’t. And the silence from federal NDP figures, from Indigenous policy commentators usually loud about consultation, and from the broader Canadian left on this file has been — let’s be polite — instructive.

Kinew has gotten a pass on this that he should not be getting. I want to put that on the record.

Holding two ideas at once

Now to the harder analytical question: how do we read the federal posture, given all of the above?

Here is where the long horizon matters, and where I’d ask readers to do something genuinely difficult: hold two things in your head at the same time without collapsing them into a single judgment.

Thing one: the 2019 Tanco sale was a strategic error. There is no charitable read on which the absence of a national security review looks wise from the vantage point of 2026. The geopolitical environment of 2019 was already sliding toward the one we now inhabit, and the Trudeau-era Investment Canada apparatus was visibly behind the curve on Chinese state-linked acquisitions in the resource sector. The 2022 divestment orders were a tacit admission of this. Tanco escaped because the framework wasn’t ready in 2019, and once Sinomine was in possession of an operating asset with deep capital sunk into it, the cost and legal risk of forcing a divestment was an order of magnitude higher than blocking deals at the exploration stage. That is not a defence of the original decision. It is an explanation of why the 2022 government drew the line where it did — not at Tanco, but in front of the next Tanco.

Thing two: even granting all of the above, the Carney government’s posture toward the existing Tanco file is not the contradiction it appears to be. It is a perfectly recognizable move on the long horizon, and once you see it, the apparent incoherence dissolves entirely.

Tanco is being made strategically irrelevant rather than legally undone. That is the move. And the scale of what’s actually being built around it deserves to be seen clearly, because almost no one is putting the pieces on a single page.

What Carney is actually doing — the structural reality

Pull together what’s happened in the eleven months since this Prime Minister took office. Not the optics. The architecture.

June 2025, G7 Summit: Carney launches the Critical Minerals Production Alliance during Canada’s G7 presidency. The framing, from day one, is allied supply chain coordination — Australia, Japan, Korea, the EU, the UK, plus the G7 — explicitly designed to build a non-Chinese mineral bloc.

September 2025, Major Projects announcement: Carney designates a slate of nuclear, mineral, electrification, and energy infrastructure projects as national interest priorities, eligible for accelerated approval. This is the signal to capital that the regulatory regime is changing.

November 2025, Budget 2025: Two new financing instruments are seeded. The Critical Minerals Sovereign Fund — $2 billion over five years — is given the authority to take equity stakes in Canadian critical mineral projects, issue loan guarantees, and sign offtake agreements. This is genuinely new for Natural Resources Canada. Ottawa has not historically been an equity investor in private resource extraction. The First and Last Mile Fund — $1.5 billion through 2030 — is targeted at the exact infrastructure gap that has historically forced Canadian ore offshore for refining: the road that doesn’t exist, the transmission line that stops short, the processing facility that’s just out of reach.

February 2026, Defence Industrial Strategy: Certain critical minerals are designated national security priorities under the Defence Production Act. This is not symbolic. It gives Ottawa legal tools to mobilize domestic production, stabilize prices, and direct supply to allied defence industries — including, if needed, in ways that would be unavailable under ordinary commercial law.

February 2026, Critical Minerals Ministerial in Washington: Foreign Affairs Minister Anita Anand attends the 54-country US-led critical minerals conference. Canada is positioned as the indispensable Western supplier in a JD Vance–era American strategy that is, finally, willing to cooperate with allies on this file rather than steamroll them.

March 2026, PDAC Convention in Toronto: Energy Minister Tim Hodgson announces, in a single day, $3.6 billion in new programs and investments. The Sovereign Fund’s spring launch is confirmed. The First and Last Mile Fund formally absorbs the older Critical Minerals Infrastructure Fund, with $114.9 million flowing immediately to the first five projects. $59.4 million is committed to accelerating domestic projects. $96.7 million goes to R&D across the value chain. $8.27 million seeds a Canadian critical minerals stockpiling regime — small in dollars, enormous in precedent. Canada starts stockpiling scandium and graphite. A Mine Permit Navigator is launched to streamline regulatory approvals under the “One Project, One Review” objective with a two-year timeline target.

The day before PDAC, March 2 2026: Hodgson signs 30 new partnerships under the Critical Minerals Production Alliance with 12 allied countries, unlocking $12.1 billion in mining and processing project capital. India signs a critical minerals MOU with Canada during Carney’s bilateral visit. Cyclic Materials’ rare earth elements recycling Centre of Excellence in Kingston gets up to $9.1 million in federal money on top of a $25 million equity investment from the Canada Growth Fund. First Phosphate’s LFP-cathode-grade phosphorous project in Saguenay–Lac-Saint-Jean gets $16.7 million plus Belgian institutional backing.

Throughout the period: Canada becomes Chair of the IEA Critical Minerals Working Party. Canada signs new formal critical mineral cooperation mechanisms with Germany, Australia, and Japan. Canada negotiates direct offtake agreements with Rio Tinto for scandium and Nouveau Monde Graphite for graphite — meaning the federal government is now a buyer of last resort for strategic Canadian production, exactly the kind of price-floor mechanism that breaks Chinese market manipulation.

Now look at the cumulative picture. In under a year, Canada has assembled — and this is not hyperbole — the largest reorientation of Canadian resource policy since the National Energy Program, except this one is being done in coordination with allies rather than against them, and with equity tools rather than expropriation. We are talking about, conservatively:

• $2 billion in the Sovereign Fund (equity, debt, offtake)

• $1.5 billion in the First and Last Mile Fund (infrastructure)

• $18.5 billion mobilized through the Production Alliance across two rounds

• $12.1 billion unlocked in the second alliance round alone, with 12 allied partners

• Direct federal offtake agreements with two named producers and more in the pipeline

• A stockpiling regime, a Mine Permit Navigator, and a Defence Production Act designation

• Chairmanship of the IEA Working Party

• New bilateral mechanisms with Germany, Australia, Japan, India, the EU, Greenland, and the UK

Hodgson’s framing of this at PDAC was striking, and worth quoting because it tells you the doctrine: “Secure, critical mineral supply chains is national security, is sovereignty.” That is not the language of incremental policy. That is the language of a government that has decided critical minerals are now a strategic national priority on the order of energy security in the 1970s — and is funding it accordingly.

Why this is the harder, smarter play on Tanco

Now reread the Tanco file in light of all that.

Imagine the alternative. Suppose Carney came in and ordered Sinomine to divest from Tanco tomorrow. What happens?

You get a multi-year legal war under the Investment Canada Act, almost certainly ending up at the Federal Court and potentially at international arbitration. You get a chilling effect on every other foreign investor in the Canadian resource sector — including the Australians, Koreans, Japanese, Germans, and Indians we are actively recruiting through the Production Alliance. You get a Chinese retaliation playbook deployed against Canadian canola, seafood, and potash; we have seen this movie before, twice, and it ended badly both times. You get a domestic political fight over whether the precedent applies to other legacy Chinese-held Canadian assets, of which there are many. You get, at the end of all that, possible repossession of an asset that still cannot be processed in Canada because we have no domestic lithium refining capacity at scale yet. The ore would sit. The cesium would stop. The world’s only reliable non-Russian, non-Chinese cesium source would go offline in the middle of a global scramble for it.

None of that builds a Canadian battery ecosystem. It just sets one on fire to make a point.

The Stratum VIII move is different. You let the existing asset run. You quietly accept that the 2019 sale is a sunk cost. You spend the next five to ten years building the parallel capacity — the Sovereign Fund, the First and Last Mile Fund, the offtake agreements, the German and Korean and Japanese and Indian partnerships, the rare earths processing facilities at Cyclic Materials, the LFP-grade phosphorous at First Phosphate, the stockpiling regime, the Defence Production Act tools. You position Canada as the indispensable non-Chinese supplier inside an allied bloc that includes the EU, the UK, Japan, Korea, Australia, and increasingly India. And you do all of this while Tanco continues to ship ore to China — because the moment Canadian and allied refining capacity comes online at scale, Tanco’s leverage collapses on its own. It becomes one source among many, not the only game in the country.

That is the long game. It is patient. It is deeply unsatisfying to anyone who wants a headline tomorrow. And it is, I would argue, genuinely the best available strategy for a middle power that does not yet have the industrial base it needs to play hardball — but is methodically, quarter by quarter, building exactly that base.

The asymmetry of attention

Step back, and the contrast is almost comic.

Tanco is one operating mine. It employs 150 people. It produces a few tens of thousands of tonnes of spodumene concentrate annually. It generates regular news coverage, recurring social media debate, and a steady drumbeat of “why isn’t Carney doing anything about China?”

The Critical Minerals Sovereign Fund, the First and Last Mile Fund, the Production Alliance, the Defence Production Act designations, the offtake agreements, the stockpiling regime, the IEA chairmanship, the bilateral mechanisms with seven allied governments — together representing somewhere north of $35 billion in mobilized capital and an entirely new federal toolkit for industrial strategy — got, collectively, a fraction of the public attention that one anonymous Twitter thread about Bernic Lake commands in a week.

That is the asymmetry I keep coming back to. The visible signal, week to week, is that “nothing is being done about Tanco.” The actual signal, decade to decade, is that Tanco is being routed around so completely that by 2035 it will look quaint that anyone ever worried about it.

The reactions your friend was observing — the short-sightedness, the lack of vision — are real. But, with respect, I’d gently relocate them. They are not in the federal government. They are in the analytical lens being used to evaluate the federal government. We have built a political-media ecosystem that punishes patience and rewards the dramatic gesture, even when the gesture is strategically incoherent. We see “no Tanco divestment” and call it weakness. We don’t see the $3.6 billion announced at PDAC in a single day, the 30 partnerships unlocked the day before, the $25 million Canada Growth Fund equity investment in a rare earths recycling facility in Kingston, the LFP-grade phosphorous coming online in Saguenay, the offtake agreements with Rio Tinto and Nouveau Monde — because none of those things are loud.

They are, however, the actual war.

One last thought, on Kinew

I want to come back to the Manitoba angle one more time, because it deserves to be named clearly.

The federal posture on Tanco is defensible. The provincial posture is not, or at least not in the form it took. Kinew had options that would have been politically harder but procedurally honest. He chose administrative closure. He used a cabinet order to dismiss four appeals — including from the Manitoba Métis Federation — without independent review, without substantive public response, and without using the existing arm’s-length Clean Environment Commission that was designed for exactly this purpose. He did so on behalf of a Beijing-headquartered firm whose ore flows to China.

If a Conservative premier had done that, the coverage would have been wall-to-wall for a month. The fact that it was a New Democrat doing it, and that the file involves Indigenous appellants whose concerns were dismissed by cabinet fiat, should be generating a much harder conversation than it has. The silence is itself a data point — about how much of our political commentary is actually about principle, and how much is about which jersey is being worn.

I’ll keep watching Kinew on this. There may be more to the story, and I want to be fair. But on the record as it stands, this was not the NDP’s finest hour, and pretending otherwise is the same kind of short-sightedness the original reader was rightly complaining about — just pointed in a different direction.

Where this leaves us

The phrase that keeps coming back to me on this whole file is one I borrowed from a strategist friend years ago: the absence of drama is sometimes the presence of strategy.

A government that was actually flailing on critical minerals would be staging dramatic confrontations with Sinomine to generate headlines while quietly doing nothing structural. This government is doing the opposite — visibly leaving Tanco alone while quietly assembling, in eleven months, the most ambitious industrial-strategy reorientation Canada has attempted in two generations. The Sovereign Fund alone, with its equity-investment authority, is a tool Ottawa has not had in living memory. The Production Alliance is genuinely new infrastructure for allied supply-chain coordination. The Defence Production Act designations give the federal government legal levers most Canadians don’t know exist.

If the framework from last week is right — and I think it is — that’s exactly what we should expect to see from a Stratum VIII operator on a 30-year horizon. Patient at the surface. Frantic underneath. Letting the legacy asset run while the alternative gets built around it. Refusing the dramatic move that would feel good for a week and cost Canada five years of allied trust.

And it’s exactly what makes it so easy to miss.

More on the Sovereign Fund’s first equity investments when they’re announced this spring. More on the German MOU and the rare earths processing build-out. More on the Defence Industrial Strategy and what the critical minerals designations actually unlock. There’s a great deal here, and very little of it is being covered with the seriousness it deserves.

In the meantime: when someone tells you Carney is doing nothing about China and critical minerals, ask them what they think the Sovereign Fund is for. Ask them what they think 30 partnerships with 12 allies in 24 hours adds up to. Ask them what they think it means that Canada now chairs the IEA Critical Minerals Working Party.

You’ll usually find the conversation gets quieter pretty quickly. That, too, is a data point.

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Glen Roberts is the author of Sacred Metaphysics and Consciousness: The History of the Absolute and Eternal and the developer of Universal Dynamics and the Vajra sovereign AI architecture.

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