SAPPORO - Canada is ready to become a reliable provider of critical minerals to its international allies including Japan, a senior official said, as the Group of Seven (G7) countries deem such minerals essential for climate goals and energy security.

Canada has signed a joint action plan with the United States to advance secure supply chains for critical minerals and has similar critical minerals cooperation agreements with Japan and the European Union.

"We view this resource has been very strategic, not only from an economic point of view, but also from a security point of view," Canada's minister of environment and climate change Steven Guilbeault told Reuters in Japan where he will take part in a G7 ministerial meeting on climate, energy and environment.

The April 15-16 meeting in Sapporo, part of Japan's G7 presidency this year, will discuss the growing importance of critical minerals for the clean energy transition and the need to prevent economic and security risks caused by vulnerable supply chains and monopolization, among other topics, the latest draft communique seen by Reuters showed.

China dominates the market for critical minerals used to make electric vehicle batteries, central to developed nation goals to decarbonise, and Russia - which invaded Ukraine last year - is also a major player.

Last year, Canada asked three Chinese companies to sell their stakes in Toronto-listed lithium explorers following a national security review.

Guilbeault said this was for "strategic security reasons".

"We have a lot of those critical minerals, we have almost all of them in Canada with a few exceptions. We can become a reliable provider of these resources or products for our international allies like Japan, for example," he said.

FOSSIL FUELS AND COAL POWER PLANTS
The main battle among G7 environment and energy ministers this year is focused on whether investments in fossil fuels, in particular liquefied natural gas (LNG), can continue and how long coal-fired power plants should continue to operate.

Energy-poor Japan wants to keep LNG as a transition fuel to cleaner energy for at least 10-15 years and to co-fire ammonia with coal at its thermal power plants.

Climate activists content that approach helps extend the life of coal power plants and supports big corporations rather than decarbonisation.

Canada's position is that phasing out coal is one of the most effective ways to fight climate change and there are a lot of alternatives to coal-fired electricity, Guilbeault said.

"So it's a message that we are conveying to all of our peers whether it's Japan, China or India... We are very much aware that any new large investment in fossil fuels infrastructure will be with us for many, many years," he said.

"It doesn't mean that there won't be any more fossil fuel investment. But they have to be very limited and we have to make sure they are in line with our climate change commitment, not just for 2030, but for 2050 to be net zero."