By: Alexander Panetta
Date: Nov 13, 2022
The United States military has been quietly soliciting applications for Canadian mining projects that want American public funding through a major national security initiative.
It’s part of an increasingly urgent priority of the U.S. government: lessening dependence on China for critical minerals that are vital in everything from civilian goods such as electronics, cars and batteries, to weapons.
It illustrates how Canadian mining is becoming the nexus of a colossal geopolitical struggle. Ottawa just pushed Chinese state-owned companies out of the sector, and the U.S. is now considering moving public funding in.
The American military has a new pot of money at its disposal to help private companies inaugurate new mining projects; it’s for funding feasibility studies, plant renovations, battery-recycling and worker training.
This whirlwind of activity was prompted by a White House study last year warning that dependence on certain foreign-made products represents a national security risk to the U.S., and it cited semiconductors, batteries, medicines and 53 types of minerals.
An official from the U.S. Department of Defence this week provided a briefing on the program at a cross-border conference, and he made one thing clear about the funding: Canadians qualify.
That’s because Canada has, for decades, belonged to the U.S. military industrial base and is every bit as entitled to the cash as American mining projects.
“It’s really quite simple. It’s a matter of law,” said Matthew Zolnowski, a portfolio manager for the Defense Production Act program, speaking to a gathering of the Canada-United States Law Institute in Washington, D.C.
“So an investment in Alberta or Quebec or Nova Scotia would be no different than if it was in Nebraska or anywhere else in the United States. As a matter of law.”
Canadian government provides list of 70 projects
Zolnowski said the U.S. is actively reaching out to companies to explain the process, as many have no relationship with the U.S. government and might not realize how it works.
“We are actively engaging those firms,” he said, describing a flurry of recent activity by quoting an old movie line: “It’s a duck on a pond. It looks quiet on the surface, but there’s a lot happening.”
The Canadian government has been active, too. Canadian officials say they’ve already provided the U.S. with a list of 70 projects that could warrant U.S. funding.
Both countries describe this as a generational initiative still in its early stages: Canada, for now, is still a bit player in producing these minerals, which include lithium, cobalt and manganese.
Canada’s critical mineral reserves
But one Canadian official said this can change. Jeff Labonté, assistant deputy minister at Natural Resources Canada, told the conference that Western democracies are now engaged in industrial policy in a way they haven’t been for decades.
“We have this resource potential…. We also have a huge capacity,” he said, touting 200 mines and 10,000 potential products in the exploration phase.