While global investors remain fixated on advanced chips and surging electricity needs, the artificial intelligence boom is quietly pushing another strategic resource to centre stage: rare earths. For Canada, a country rich in both mineral deposits and AI research, a rare opening is taking shape.
Toronto-based Sprott Asset Management now views AI as the third structural driver of rare earth demand, joining defence and electrification. The world’s five largest hyperscale data-centre operators are expected to spend roughly US$400 billion (C$562 billion) in 2025 alone, and the build-out is consuming vast quantities of rare earth permanent magnets. These materials are embedded in cooling systems, storage infrastructure, semiconductors and communications equipment; cooling alone accounts for about 20% of a facility’s electricity costs. The International Energy Agency forecasts that AI data centres will absorb 3% of global magnet rare earths by 2030.
MTETALS 100 interviewed Kerem Usenmen, CEO of Volta Metals Ltd. (CSE: VLTA) (FSE: D0W) (OTC Pink: VOLMF), who discussed the company’s recent developments and future direction. Volta Metals is a Canadian mineral exploration company focused on critical minerals, with an emphasis on rare earths, gallium, lithium, cesium and tantalum, and is strategically focused on building a portfolio of high-potential critical mineral assets. The company is positioning itself as a key supplier of essential materials for the North American semiconductors, energy transition, advanced electronics, and defense sectors.
Demand extends well beyond the data centre. Annual military spending has climbed to about US$2.6 trillion, NATO members have agreed to lift defence budgets to 5% of GDP, and the United States is considering expanding missile and defence-system production — all of which rely on high-performance rare earth magnets. Meanwhile, electric vehicles and wind turbines continue to underpin long-term consumption, with forecasts suggesting clean-energy magnet demand could double by 2050.
The source of anxiety is the supply chain’s extreme concentration. China accounts for roughly 94% of global permanent magnet output. Although the United States mines about 13% of the world’s rare earths, it still imports roughly two-thirds of its requirements from China. Recent Chinese export controls on military-grade rare earth products have intensified concerns. While Washington has taken an ownership stake in MP Materials, offered long-term price guarantees and backed new processing plants — and while Australia, Japan, Apple, Goldman Sachs and others have channelled capital into non-Chinese capacity — the hurdles remain daunting. A new mine takes an average of 16 years to move from discovery to production, and building separation and refining expertise takes even longer.
Canada is positioning itself to fill that gap. Its Critical Minerals Strategy treats these minerals as the foundation of the green and digital economy. Official data shows 56 active critical-mineral mines, 31 processing facilities and more than 170 major projects, with the sector contributing roughly C$40 billion to GDP and supporting about 110,000 direct and indirect jobs. What makes Canada’s case distinctive is the combination of natural resources and elite AI research — institutions such as the Vector Institute and Mila are helping turn the country from a raw-material exporter into a technology integrator by applying artificial intelligence to exploration and processing.
Aclara Resources, for instance, is working with Stanford University and the Argonne National Laboratory to use AI for predicting mineral deposits and simulating complex rare earth separation flowsheets. It plans a heavy rare earth separation plant in Louisiana, building a vertically integrated non-Chinese supply chain. Canada and Japan are simultaneously exploring deeper cooperation on critical minerals, while Teck Resources has recently expanded production capacity for germanium, gallium and antimony — materials essential to semiconductors.
As the AI race increasingly doubles as a supply-chain security race, Canada is straddling both the resource and the technology track, giving it a firm hand at the global rare-earth table.
