In a bid to diversify its critical mineral sources, the United States military is pursuing Canadian mining projects to apply for American public funding through a substantial national security program. This comes as the US government urgently seeks to diminish its dependence on China for crucial minerals required in the production of goods used in electronics and mobility applications, as well as in defense.

The ongoing power struggle between the US and China has placed Canada’s mining industry in the spotlight. After the Canadian government recently removed Chinese state-owned firms from the sector, the US is now contemplating channeling public funds into Canadian mining. To expand the domestic mining sector, President Joe Biden invoked the 1950 Defense Production Act, assigning hundreds of millions of dollars for the military to oversee its execution. The funds will be used for conducting feasibility studies, upgrading plants, recycling batteries, and training workers.

For decades, Canada has been a key component of the US military industrial base, making it eligible for the same funding as American mining projects. To date, Canadian authorities have provided the US with a list of 70 potential projects warranting US funding. Furthermore, the Canadian government is committing billions of dollars to the sector via federal and provincial initiatives.

The growing demand for critical minerals, especially in the electric vehicle industry, is driving the race to secure stable supplies. China’s current control over two-thirds of the global lithium processing capacity poses a challenge to the US. To mitigate this issue, the US is adopting a four-pronged strategy that includes boosting domestic demand for minerals, increasing supply by financing new production and recycling, creating stockpiles, and partnering with allies.

Establishing a dependable critical mineral supply chain is of paramount importance to US national security interests. By supporting Canadian mining projects, the US aims to reduce its reliance on China while fostering stronger ties with a trusted partner. As the shift towards environmentally friendly technologies gains momentum, the demand for these minerals will surge, making it vital for the US to secure a stable supply. The cooperation between the US and Canadian mining sectors will not only yield economic benefits for both countries but also guarantee the safety and robustness of their supply chains in a progressively competitive and unpredictable global environment.

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