BERLIN (Reuters) -Canada is working with its allies to potentially fund critical mineral transactions, similar to what the U.S. government did with MP Materials to diversify the supply chain from China, Energy and Natural Resources Minister Tim Hodgson told Reuters on Tuesday.

The key target, Hodgson said, would be minerals subject to China's export restriction, which is challenging the production of important types of mineral products in G7 and NATO countries.

"I think you'll see us looking at similar types of transactions, working with our allies," Hodgson said.

"The difference between the MP Materials deal is all of the output goes to the United States there. We are interested in doing these sorts of deals in partnership with our allies to share the output with our allies," he said.

MP Materials said on July 10 that it had entered into a public-private partnership with the U.S. Department of Defense to build out a domestic rare earth magnet supply chain and reduce foreign dependency.