The U.S. military has taken the biggest step yet to fund mining initiatives in Canada as part of a new national security initiative.
The Pentagon announced Tuesday that it is providing $20 million to build a cobalt refinery in Temiskaming Shores in northern Ontario. The money will go to Toronto-based Electra Battery Materials Corporation, with the Canadian government contributing $3.6 million ($4.9 million Canadian) to the project.
This is the third and by far the largest in a series of grants from Washington for Canadian projects under an initiative announced during U.S. President Joe Biden’s visit to Ottawa in 2022.
This project is the first of its kind since World War II. At that time, the United States urgently needed aluminum for its military arsenal and therefore financed the expansion of the aluminum industry in Quebec.
The reason for this is the growing fear in the US that it is heavily dependent on China for the production of a wide range of civilian and military goods – from batteries for electric vehicles to electronics and weapons systems. Washington is trying to find new sources of supply for such products in the event of a crisis – for example if trade with China is interrupted due to tensions over Taiwan.
The first two U.S. announcements earlier this year were for copper, gold, graphite and cobalt mining and processing projects in Quebec and the Northwest Territories. These two earlier grants totaled less than $15 million.
Mining projects in Canada have been funded as part of a major U.S. defense program announced by U.S. President Joe Biden (seen here in Ottawa in 2023). (Blair Gable/Reuters)
In interviews, representatives of the companies that received the two previous grants said they were unconditional, meaning they did not have to pay the money back and were not obligated to sell their minerals to the U.S. military.
However, it cannot be ruled out that in the event of a war or other crisis, the US military could also become a customer: under Canadian law, Ottawa has the authority to purchase raw materials on behalf of a NATO ally in an emergency.
