For the first time since World War II, Washington is throwing money at Canadian mining projects in the name of national security.
Driving the news: As part of a push to shore up its own critical mineral supply, the U.S. Department of Defense is giving Canadian mining company Electra Battery Materials a US$20 million grant to build a new cobalt refinery in northern Ontario.
- This is the largest of three grants that the U.S. has handed out to Canada’s mining sector this year, with just under $15 million already committed to projects in Québec and the Northwest Territories.
- The money doesn’t need to be repaid, but there is a catch. If the U.S. finds itself in a pinch, it could push Ottawa to buy minerals from these facilities on its behalf.
Why it’s happening: China produces 80% of the world’s refined cobalt — an essential material for everything from phones to EV batteries to military equipment. As tensions rise between the West and Beijing, the U.S. is pushing to cut its reliance on Chinese minerals.
Why it matters: The U.S. is looking to Canada as a future critical mineral provider, but as cheap Chinese metals flood the market and make more Canadian mines unprofitable, some in the industry say financial help is essential to building up the supply chain.—LA