The US Department of Defence is leaving no stone unturned in its quest to wrest strategic battery supply chains from China. Not even the little blue one.That’s because the Pentagon on Tuesday announced a $27.6 million grant for a Canadian company to create a cobalt refinery on Temiskaming Shores in northern Ontario, near the Quebec border.The cash will go to Toronto-based Electra Battery Materials Corporation from the US Ukraine Supplemental Appropriations Act of 2022. The federal government, meanwhile, is chipping in another $4.9 million of taxpayer dollars for the project.."This award will develop North American production of a key precursor material for large capacity batteries, helping to create a more robust industrial base capable of meeting growing demand across both the defense and commercial sectors," Dr. Laura Taylor-Kale, the Pentagon’s assistant secretary of defense, said in a statement.Added federal Energy Minister Jonathan Wilkinson: “There is enormous opportunity for both Canada and the United States from both an economic and a security perspective.”The Defense Production Act (DPA) funds will enable Electra to establish the first North American refinery for the production of cobalt sulfate, an active material in lithium-ion batteries, leading to a domestic processing facility capable of producing commercial-scale levels of a critical precursor material for large capacity batteries used in many DoD systems. Whereas the US motivation is military, Canada wants the factory to support its subsidized EV industry.It’s the third — and the largest — of a series of military grants as part of a joint initiative announced by US President Joe Biden and Prime Minister Justin Trudeau during a state visit to Ottawa in 2022..The first two announcements earlier this year saw $15 million steered into copper, gold, graphite and cobalt mining in the Northwest Territories and Quebec.The dollars reportedly come with no strings attached, meaning they don’t have to be repaid. However, the US military could eventually procure supplies of the minerals in the event of a war or other crisis under Canadian law that grants Ottawa emergency powers to essentially expropriate raw materials on behalf of a NATO ally.It’s only the first time since the Second World War that such a deal has been struck, when Uncle Sam helped fund the expansion of Quebec’s aluminum industry to power its military arsenal.This time, the adversary is clearly China which has a stranglehold on critical minerals and rare Earths necessary for a variety of civilian and military hardware, including EVs, electronics and even missile guidance systems. Cobalt alloys are useful for high temperature applications such as gas turbines and jet components. That said, cobalt mining is extremely labour intensive and has resulted in human rights abuses and child slave labour in places like the Congo.
The US Department of Defence is leaving no stone unturned in its quest to wrest strategic battery supply chains from China. Not even the little blue one.That’s because the Pentagon on Tuesday announced a $27.6 million grant for a Canadian company to create a cobalt refinery on Temiskaming Shores in northern Ontario, near the Quebec border.The cash will go to Toronto-based Electra Battery Materials Corporation from the US Ukraine Supplemental Appropriations Act of 2022. The federal government, meanwhile, is chipping in another $4.9 million of taxpayer dollars for the project.."This award will develop North American production of a key precursor material for large capacity batteries, helping to create a more robust industrial base capable of meeting growing demand across both the defense and commercial sectors," Dr. Laura Taylor-Kale, the Pentagon’s assistant secretary of defense, said in a statement.Added federal Energy Minister Jonathan Wilkinson: “There is enormous opportunity for both Canada and the United States from both an economic and a security perspective.”The Defense Production Act (DPA) funds will enable Electra to establish the first North American refinery for the production of cobalt sulfate, an active material in lithium-ion batteries, leading to a domestic processing facility capable of producing commercial-scale levels of a critical precursor material for large capacity batteries used in many DoD systems. Whereas the US motivation is military, Canada wants the factory to support its subsidized EV industry.It’s the third — and the largest — of a series of military grants as part of a joint initiative announced by US President Joe Biden and Prime Minister Justin Trudeau during a state visit to Ottawa in 2022..The first two announcements earlier this year saw $15 million steered into copper, gold, graphite and cobalt mining in the Northwest Territories and Quebec.The dollars reportedly come with no strings attached, meaning they don’t have to be repaid. However, the US military could eventually procure supplies of the minerals in the event of a war or other crisis under Canadian law that grants Ottawa emergency powers to essentially expropriate raw materials on behalf of a NATO ally.It’s only the first time since the Second World War that such a deal has been struck, when Uncle Sam helped fund the expansion of Quebec’s aluminum industry to power its military arsenal.This time, the adversary is clearly China which has a stranglehold on critical minerals and rare Earths necessary for a variety of civilian and military hardware, including EVs, electronics and even missile guidance systems. Cobalt alloys are useful for high temperature applications such as gas turbines and jet components. That said, cobalt mining is extremely labour intensive and has resulted in human rights abuses and child slave labour in places like the Congo.
