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U.S. President Joe Biden speaks during a virtual roundtable on securing critical minerals at the White House in Washington, U.S., February 22, 2022.
Speaking of China,the US and Canada are taking their efforts to compete with Beijing underground – literally. The Pentagon on Thursday announced it would invest $15 million in two early-stage mines in Canada looking to dig for “critical minerals” that are considered essential for national security.
The Canadian government will pony up a similar amount for the project, which represents the first US-Canada tag team of its kind. The two projects will focus on cobalt and graphite, critical components in solar power batteries and other fuel cells which are at the heart of the green energy transition.
China is the world’s leading miner of graphite and dominates the global cobalt industry through its control over the sector in the Democratic Republic of Congo, the world’s largest producer.
The American money for the two Canadian mines comes under the Defense Production Act, a tool from the early days of the Cold War that enables the president to expedite the funding or production of industries deemed essential for national security.
The small print? Governments were the only option. The mining companies weren’t able to raise money for these projects on traditional capital markets, because the prospects are at such an early stage that they can’t be proven.