The U.S. military has announced a substantial new investment in Canadian mining, with a $20 million grant being awarded to Electra Battery Materials Corporation to establish a cobalt refinery in Temiskaming Shores, Ontario. This funding, provided under Title III of the Defense Production Act, is part of the Pentagon’s efforts to enhance domestic production of key minerals as outlined in the 2024 National Defense Industrial Strategy.
Electra Battery Materials’ cobalt refinery project has received support from both the U.S. Department of Defense and the Canadian government. In June, the Canadian government granted Electra $3.6 million to advance a battery materials recycling initiative at the same refinery. This investment is part of a broader initiative that was launched during President Joe Biden’s visit to Ottawa in 2022, and it represents the largest of several U.S. grants aimed at securing critical mineral supplies in Canada.
The construction of the Ontario Cobalt Refinery will enable Electra to launch North America’s first cobalt sulfate hydrometallurgical plant, which will play a crucial role in producing cobalt sulfate—a key component for lithium-ion batteries. These batteries will support defense projects and the growing electric vehicle supply chain in both the U.S. and Canada.
The cobalt facility being developed by Electra Battery Materials is a groundbreaking project that features a hydrometallurgical facility with a proven track record. It is the only facility in North America providing cobalt sulfate for electric vehicles, and its modular design allows for future expansion to meet the growing demand in the EV market. The site is fully permitted and ready for further development, boasting significantly lower greenhouse gas emissions compared to Chinese facilities due to its hydroelectric power source. At full capacity, the facility could produce enough cobalt sulfate for over 1 million electric vehicles annually.
The investment in cobalt mining in Canada reflects concerns about overreliance on China for essential minerals needed in electric vehicles, electronics, and weapons systems. With tensions rising over Taiwan, the U.S. is seeking to diversify its supply chain and enhance its national security. The grants provided earlier this year targeted various mineral projects in Quebec and the Northwest Territories, with a focus on copper, gold, graphite, and cobalt. These investments are crucial for creating a more robust industrial base capable of meeting the growing demand for minerals in both defense and commercial sectors.
Canada’s wealth of critical minerals is poised to play a significant role in meeting the global demand for these essential resources. The International Energy Agency predicts a substantial increase in the energy sector’s demand for critical minerals by 2040, with the North American zero-emission vehicle market alone projected to reach $174 billion by 2030. Canada’s abundant reserves of cobalt, graphite, lithium, and nickel make it a key player in the production of minerals essential for future batteries and electric vehicles, highlighting the importance of investing in these resources for a sustainable green energy transition.
Jonathan Wilkinson, Canada’s Minister of Energy and Natural Resources, emphasized the economic and security benefits of developing secure critical minerals value chains in collaboration with the United States and other allies. By mining responsibly sourced critical minerals, processing them in North America, and building batteries for electric vehicles and other technologies, there is a significant opportunity for economic growth and job creation in both countries. This partnership aims to create sustainable industrial bases that support emission-reducing supply chains and climate change solutions for future generations.
In conclusion, the U.S. Department of Defense’s investment in cobalt production in Canada, particularly in partnership with Electra Battery Materials, is expected to have a significant impact on the industry in the coming years, contributing to the development of a more secure and sustainable supply chain for critical minerals.
