US Military Invests $15M in Canadian Mineral Projects

US Military Invests $15 Million in Canadian Mineral Projects to Reduce Dependency on China

In a significant move to secure critical mineral supplies, the U.S. military has invested $15 million in Canadian mineral projects. Lomiko Metals and Fortune Minerals, both grant recipients, will advance graphite projects and establish North American processing facilities. This investment is part of a broader strategy to reduce dependency on China for minerals used in modern technology, including batteries, electronics, and munitions.

The U.S. Congress is also exploring alternative sources, such as deep-sea mining, as highlighted by a $2 million Pentagon study. Additionally, $20 million has been awarded to South32's Hermosa project in Arizona to boost manganese production, an essential material for batteries.

However, Canadian regulatory concerns are growing due to Chinese investments in the mining sector. Over the past 30 years, Chinese companies have invested billions in Canadian mining, prompting increased scrutiny and rejections of deals involving critical minerals. This vigilance reflects fears that foreign control over these resources could undermine Canada’s strategic autonomy and national security.

Key Takeaways

• The U.S. military has invested $15 million in Canadian mineral projects to secure critical resources like copper, gold, graphite, and cobalt.
• Lomiko Metals and Fortune Minerals, grant recipients, will advance graphite projects and establish North American processing facilities.
• A $2 million Pentagon study on deep-sea mining and $20 million for South32's Hermosa project highlight efforts to diversify mineral sources.
• Canadian government scrutiny of Chinese investments in mining reflects national security concerns around strategic autonomy.
• Critical minerals, such as those used in EV batteries and advanced military equipment, are vital for both civilian and military applications.

Analysis

The US military's $15 million investment in Canadian mineral projects reduces dependency on China for critical minerals, benefiting both countries' strategic autonomy and national security. This move, along with a $2 million Pentagon study on deep-sea mining and $20 million for South32's Hermosa project, aims to diversify mineral sources. Consequently, companies like Lomiko Metals and Fortune Minerals will advance graphite projects and establish North American processing facilities. However, increased scrutiny of Chinese investments in Canadian mining reflects regulatory concerns and potential disruption of critical mineral supplies. In the long term, this strategic shift may foster competition and cooperation in the global critical mineral sector.

Did You Know?

• Critical minerals are natural resources that are essential for the production of high-tech products, including batteries, electronics, and munitions. These minerals are considered critical due to their limited supply and high demand, which can lead to geopolitical tensions and supply chain disruptions.
• Graphite is a critical mineral used in the production of lithium-ion batteries, commonly found in electric vehicles (EVs) and high-tech devices. Graphite is also utilized in the production of advanced military equipment, such as night vision goggles and radar systems.
• Lomiko Metals and Fortune Minerals are Canadian mining companies that have received grants from the U.S. military to advance graphite projects and establish North American processing facilities, aiming to reduce the U.S.'s dependency on China for critical mineral supplies and establish a more diversified and resilient supply chain.
• Deep-sea mining is a controversial and largely unproven method of extracting minerals from the ocean floor. The Pentagon has awarded a $2 million study to explore the potential benefits and risks of deep-sea mining as an alternative source of critical minerals.
• South32's Hermosa project is a manganese mining project in Arizona that has received a $20 million grant from the U.S. military. Manganese is an essential material for batteries and is used in a variety of high-tech applications.
• Canadian regulatory concerns around Chinese investments in the mining sector reflect growing fears that foreign control over critical mineral supplies could undermine Canada's strategic autonomy and national security. Over the past 30 years, Chinese companies have invested billions in Canadian mining, leading to increased scrutiny and rejections of deals involving critical minerals.