One of the projects on the Americans' radar is northern Ontario's Ring of Fire
Author of the article:Naimul Karim
Publishing date:Nov 16, 2022 •
Headquartered at the Pentagon in Arlington, Virginia, the U.S. Department of Defense is having discussions with miners about the important role northern Ontario’s Ring of Fire region will play in producing the critical minerals needed by Canada and the U.S.
PHOTO BY REUTERS/AL DRAGO
The United States military is talking to Canadian miners about potentially funding some critical minerals projects in Canada, the latest evidence of President Joe Biden’s administration’s commitment to cutting its reliance on China for the metals needed to build defence equipment and expand the electric vehicle (EV) market.
One of those projects is in the Ring of Fire region in northern Ontario, which Premier Doug Ford’s government believes has “multi-generational potential” to produce minerals such as nickel and copper that are currently in high demand as countries look to accelerate the shift away from fossil fuels.
“We’ve had initial discussions with the U.S. Department of Defense regarding the important role that northern Ontario’s Ring of Fire region will play in producing the critical minerals needed by Canada and the U.S.,” Luca Giacovazzi, chief executive of Wyloo Metals Pty. Ltd., the Australian company that owns the Eagle’s Nest project in the area, confirmed in a statement.
Ontario is currently working to build an all-season pathway to connect the Ring of Fire with manufacturers in the southern part of the province. The project, which is being advanced with the help of two Indigenous groups, however, has also faced opposition by other First Nations.
Wyloo Metals Pty. Ltd.’s Eagle’s Nest project in the Ring of Fire region in northern Ontario. The deposit contains nickel, copper, platinum and palladium.
PHOTO BY WYLOO METALS PTY. LTD.
Toronto-based Electra Battery Materials Corp. is another company that has had “preliminary discussions” with the U.S. Department of Defense. In September, the company inked its first “big commercial contract when it signed a deal to supply LG Energy Solution Ltd., a global lithium-ion battery maker, with 7,000 tonnes of cobalt from its Ontario refinery.
Lithium miner Avalon Advanced Materials Inc., based in Toronto, also had talks with the U.S. Department of Defense.
“The capital-intensive nature of our projects and moving them at the requisite speed is a sizeable challenge,” said Zeeshan Syed, the company’s vice-president of external affairs. “Our U.S. colleagues quite clearly understand they may have a role to play to help fortify North America as a dominant player.”
‘A broader strategy’
Aaron Shull, managing director at the Centre for International Governance Innovation, a think-tank, said the American government’s discussions with Canadian miners were “tactically part of a broader strategy” on how Western democracies confront “adversarial authoritarian state actors” such as China, which dominates the EV sector.
Shull was referring to the series of steps taken by the U.S. and Canada to ensure EV production occurs close to home, or at least in places where they wield influence.
In late October, Prime Minister Justin Trudeau’s government raised the bar that foreigners must clear to join Canada’s critical minerals industry, saying any attempt by a state-owned enterprise to purchase assets in the sector can now trigger a section of the Investment Canada Act (ICA) that determines whether deals that could be “injurious to national security” require lengthy reviews.
Days later, Ottawa ordered three Chinese companies to divest their investments in three Canadian junior lithium miners.
China dominates
Washington’s recently passed Inflation Reduction Act (IRA) offers a US$7,500 subsidy meant to encourage the production of EVs in North America, while Deputy Prime Minister Chrystia Freeland used a series of speeches this fall to stress the need for “friendshoring,” an idea that would see democratic allies build supply chains through each other’s economies and tackle the influence of authoritarian regimes in the energy sector.
Toronto-based Electra Battery Materials Corp. is another company that has had “preliminary discussions” with the U.S. Department of Defense. In September, the company inked its first “big commercial contract when it signed a deal to supply LG Energy Solution Ltd., a global lithium-ion battery maker, with 7,000 tonnes of cobalt from its Ontario refinery.
Lithium miner Avalon Advanced Materials Inc., based in Toronto, also had talks with the U.S. Department of Defense.
“The capital-intensive nature of our projects and moving them at the requisite speed is a sizeable challenge,” said Zeeshan Syed, the company’s vice-president of external affairs. “Our U.S. colleagues quite clearly understand they may have a role to play to help fortify North America as a dominant player.”
‘A broader strategy’
Aaron Shull, managing director at the Centre for International Governance Innovation, a think-tank, said the American government’s discussions with Canadian miners were “tactically part of a broader strategy” on how Western democracies confront “adversarial authoritarian state actors” such as China, which dominates the EV sector.
Shull was referring to the series of steps taken by the U.S. and Canada to ensure EV production occurs close to home, or at least in places where they wield influence.
In late October, Prime Minister Justin Trudeau’s government raised the bar that foreigners must clear to join Canada’s critical minerals industry, saying any attempt by a state-owned enterprise to purchase assets in the sector can now trigger a section of the Investment Canada Act (ICA) that determines whether deals that could be “injurious to national security” require lengthy reviews.
Days later, Ottawa ordered three Chinese companies to divest their investments in three Canadian junior lithium miners.
China dominates
Washington’s recently passed Inflation Reduction Act (IRA) offers a US$7,500 subsidy meant to encourage the production of EVs in North America, while Deputy Prime Minister Chrystia Freeland used a series of speeches this fall to stress the need for “friendshoring,” an idea that would see democratic allies build supply chains through each other’s economies and tackle the influence of authoritarian regimes in the energy sector.
China dominates the EV supply chain through its refining and processing industries even though most of the metals required by EVs, such as lithium, nickel and cobalt, are mined outside the country.
Patricia Mohr, an economist and former vice-president at Bank of Nova Scotia, said that the competition with China “is growing for these important metals.” She added that Canada had a “big advantage” when it comes to nickel, noting the geology of the U.S. isn’t “prospective” for the metal.
“Furthermore, most nickel deposits in Canada involve sulphide ore which will have a much lower carbon footprint than the lateritic projects in Indonesia, mostly developed with coal-fired power,” Mohr said.
The U.S. Department of Defense wasn’t immediately available for a comment. According to the CBC, an official from the department confirmed that Canadian projects would qualify for an investment from the U.S. military while speaking at a conference.
• Email: nkarim@postmedia.com | Twitter: naimonthefield
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