Canada rare earth and metals base seen as a buffer even as broad ETF selling hits miners

A sharp, broad selloff in miners and their exchange traded funds late this week underscored how quickly momentum can turn in a hot commodity market.

Gold’s pullback clipped global mining shares and dragged the S&P/TSX Composite lower on Thursday, even after a powerful year to date run for the sector.

Canada’s portfolio stretches well beyond gold to copper, nickel, potash, uranium and aluminum, with a growing pipeline in rare earth elements and battery materials.

The iShares S&P/TSX Global Gold Index ETF shows how violent those swings can be, yet it still sports a triple digit year to date return through October 10, reflecting stronger margins, lower costs and balance sheet repair across producers.

Ottawa’s Canadian Critical Minerals Strategy aims to accelerate permitting, de-risk projects and pull more private capital into processing and supply chain links that have long been the country’s weak spot.

The plan explicitly targets rare earths, graphite, lithium, nickel and copper as building blocks for electrification and defense manufacturing.

It is a capital spending and procurement story that can smooth the cycle for developers and mid-tier producers when risk-off waves hit public markets.

The government’s own planning materials lay out timelines for coordinated projects with provinces, Indigenous partners and allied buyers, a shift from piecemeal initiatives to a portfolio approach that spreads risk across stages and regions.

Western governments work to reduce reliance on Chinese processing, stockpiling and friend shoring are pulling more attention to non-Chinese supply.

This has kept strategic capital circling Canadian names tied to permanent magnet supply chains and to copper districts that can feed grid build-out. Investors saw that dynamic earlier this year when consolidation in the copper patch refocused attention on Toronto listed heavyweights.

Combined with a magnet materials push in North America and Europe, demand signals are broadening beyond bullion and spot prices.

The VanEck Rare Earth and Strategic Metals ETF has been volatile around policy, yet it remains up strongly this year as magnet chain producers and processors ride multi-year contracts rather than day to day pricing.

In the gold complex, index changes, special distributions and buyback policies at large producers have added moving parts for passive vehicles that can magnify intraday swings when macro news hits, without necessarily changing the multi-quarter earnings path for quality operators.

With sustaining costs restrained and capex discipline holding, free cash flow at senior and mid tier miners has widened even as inflation cooled that gives boards more latitude to keep dividends and buybacks intact through choppier weeks.

A pullback in bullion might weigh on gold heavy ETFs, but copper and uranium exposures can offset some of the drag, especially as power grid and small modular reactor narratives gather steam.

When Sprott launches an active metals and miners fund as bullion surges, the pitch is not just beta to spot prices but security selection across cycles, which can dampen the whipsaw effects that plague plain vanilla baskets.

The Teck and Anglo merger keeps copper heavyweights in the Toronto spotlight, anchoring a deeper bench of globally relevant issuers.

Ottawa sees copper as pivotal to transmission build-outs and EV supply chains, an industrial stance that pairs naturally with the rare-earths push.