US demand for right of first refusal on Canadian minerals 'impossible': experts

A blanket US right of first refusal on Canadian minerals is unworkable for Canada, experts told Platts as trade talks over the Trump administration's pending 50% tariff targeting America's northern neighbor draw to a close.

The hefty US tariff, announced July 20 and set to go live Aug. 19, would hit a swath of Canadian goods and was imposed in response to Canadian trade policies, according to the Trump administration. In an effort to lessen the blow of the tariff, US and Canadian officials have been holding intense trade talks in recent weeks.

The talks go beyond the 50% tariff and include efforts to address broader trade issues, including the 50% US tariffs on aluminum and steel, vehicle import duties and Canadian trade restrictions on dairy. Among reported US demands is a right of first refusal (ROFR) on Canadian minerals, or at least preferential access to them, according to media reports citing unnamed sources familiar with the matter.

Narrower, commercially acceptable rights to minerals could work, experts told Platts.

"But a blanket ROFR? Impossible," said Heather Exner-Pirot, senior fellow and director of natural resources, energy and environment at the Macdonald-Laurier Institute, a public policy think tank in Ottawa.

More at stake

The trade talks and tariffs come amid an increasingly protectionist US trade policy. The Trump administration has used tariffs in an attempt to expand domestic industries and on July 1 declined to outright renew the United States-Mexico-Canada Agreement (USMCA), a wide-ranging trade pact. Instead, the US opted for annual reviews, consistent with President Donald Trump's criticism of the agreement.

Canada accounted for 17.7% of US metals and minerals imports, valued at $43.5 billion in 2024, according to the US International Trade Commission.

Trump has threatened to use economic force to annex Canada, often referring to the country as the 51st state, acquire Greenland and seize the Panama Canal. The US has also taken control of Venezuela's oil reserves after removing the country's president and sought 50% of Ukraine's rare earth minerals before reaching a separate deal for a reconstruction fund involving resource revenues, according to media reports.

"The Canadian delegation has a hard time negotiating with a counterparty that has no respect for existing agreements and makes whimsical extortionist demands," David Harquail, chairman emeritus of royalty and streaming giant Franco-Nevada Corp., told Platts. "This latest ROFR demand will be counterproductive to US interests as it forces Canada to seek alternate markets."

Neither Canada's federal government nor the White House responded to a request for comment to confirm and provide details about the right of first refusal.

A blanket right of first refusal would put miners and metal producers in Canada in a tough spot, experts said. If broadly applied, it could potentially mean the US could divert metal sales already under contract.

"I believe the concept of a ROFR on Canada's critical metals is a non-starter," David Davidson, a mining analyst at Paradigm Capital, said, citing challenges in applying the mechanism in a sector dominated by sales between private companies.

Exner-Pirot questioned how the US rights to Canadian minerals would work in practice, wondering if all miners would have to draft supply contracts with a clause including it.

"I don't even think it's possible [under] Canadian law," Exner-Pirot said, adding it would not be acceptable to the Canadian public or miners operating in the country.

Canada produces many metals and is a key supplier to the US, with 91% of Canada's $17.4 billion in aluminum exports headed there in 2024, before Trump took office, according to Natural Resources Canada. Canada produced 20% of global mined uranium in 2025, 6.9% of mined gold and 3.4% of mined nickel in 2025, according to S&P Global Market Intelligence data.

Trade issues

Access to Canadian minerals is a higher profile issue in the ongoing trade talks than Canada has made public, according to reporting by the Globe and Mail.

The Globe and Mail reported Aug. 16 that the US offered to slash auto tariffs to 12% from 25%, while Canada has sought to have all USMCA content exempted.

Talks have also included a proposal to impose tariff rate quotas on steel and aluminum. In quota steel would have 10% to 15% tariffs, while aluminum would have in quota tariffs in the single digits, the Globe and Mail reported.

Reaching an agreement on autos remains a key sticking point in US-Canada trade talks, according to Bloomberg reporting Aug. 17. The two countries have tightly integrated auto sector supply chains, though the Trump administration has imposed stiffer tariffs to bolster US vehicle manufacturing and tighter origin rules, while exempting the value of US-content under USMCA trade. The new 50% tariff on Canada would also target the auto sector.

The trade talks, now in their final leg, are "very intense and delicate," Canadian Prime Minister Mark Carney said Aug. 17, speaking with reporters.

Targeted rights

Still, the US could secure more Canadian minerals using traditional levers, experts said.

Davidson pointed to South Korea's export bank's recent $1 billion loan to Glencore that reportedly included copper supply commitments for South Korean companies. Exner-Pirot flagged US investments in Canadian mineral projects, that could include offtake agreements, which are standard in the mining sector.

"That option already exists and [the US government] can take equity if they want in Canadian projects," Exner-Pirot said. "It's a private matter for private companies to settle in contracts."

The US and Canada, along with many other countries, have made mineral security a higher priority in recent years as they try to boost domestic mining and manufacturing, and depend less on imports. The US has invested directly in companies like rare-earths miner MP Materials Corp., which has US mining operations, and launched other policies including tax incentives to support mining and metals production.