Canadian critical minerals company KAP Minerals and Japanese trading and industrial materials company Hanwa have signed a memorandum of understanding (MoU) to advance a strategic partnership focused on offtake supply and the development of downstream critical minerals supply chains between Canada and Japan.

The agreement establishes a framework for negotiating long-term offtake and commercial collaboration. In the first phase, Hanwa will buy and distribute phosphate and rare earth element (REE) concentrate production at KAP's Northern Ontario project.

In the second phase, the companies will collaborate to establish processing capacity in Ontario, including the production and distribution of purified phosphoric acid and the additional supply of phosphate and rare earth concentrates.

KAP's project is designed to redevelop the historic Agrium phosphate mine and tailings complex near Kapuskasing, Ontario, into a multi-product critical minerals platform. The project will initially produce 70 000 t/y to 100 000 t/y of phosphate product, followed by about 450 000 t/y of high-grade phosphate concentrate alongside rare earth concentrates and other critical minerals used in defence and advanced manufacturing supply chains. 

Under the terms of the MoU, Hanwa will leverage its extensive global distribution network and long-standing relationships with battery manufacturers, automotive companies, magnet producers and advanced materials firms across the world to develop downstream supply chains for the project’s products. 

The companies will also explore collaboration on the establishment of midstream processing in Ontario, including technical cooperation in Phase 2 of the project.

“This partnership with Hanwa represents a major step forward in establishing the Kapuskasing project as a cornerstone of the Canada–Japan critical minerals relationship. Japan is a global leader in advanced manufacturing and battery technology, and Hanwa brings a deep network of industrial relationships across the world. Together we are building a supply chain that connects Northern Ontario’s resources with the industries shaping the future of energy, defence, mobility, and advanced technology,” says KAP CEO Geoff Hampson.

“Hanwa is committed to developing reliable and sustainable supply chains for critical materials essential to the global energy transition and advanced manufacturing. Our partnership with KAP Minerals creates an opportunity to connect Japan’s industrial demand with a secure, allied source of phosphate and rare earth materials from Canada.

"We look forward to working closely with KAP and building our downstream consortium together for a resilient supply chain that benefits both countries,” adds Hanwa managing executive officer Shoji Shirasawa.

Ontario Minister of Northern Economic Development and Growth George Pirie, meanwhile, says the MoU has the potential to help secure reliable access to phosphate and other critical minerals, while also reflecting a shared interest in advancing a modern processing facility in Kapuskasing that would support the community and create many jobs in the region.

“Ontario and Japan are proving that trusted democratic allies can build secure supply chains together, without relying on hostile or unstable regimes. Northern Ontario will help power the next generation of batteries, defence technologies and advanced manufacturing, creating good-paying jobs and new investment here at home. Our government will keep cutting red tape and accelerating responsible resource development so Ontario can become the world’s most trusted supplier of critical minerals," adds Ontario Energy and Mines Minister Stephen Lecce.