Search
AI-powered
search, human-powered content.
We have updated our Privacy Policy and Terms of Use for Eurasia Group and its affiliates, including GZERO Media, to clarify the types of data we collect, how we collect it, how we use data and with whom we share data. By using our website you consent to our Terms and Conditions and Privacy Policy, including the transfer of your personal data to the United States from your country of residence, and our use of cookies described in our Cookie Policy.
--FILE--Chinese workers check tungsten ore at a factory
Most Americans are likely unaware that the Department of Defense has morphed into a major mining investor but it is becoming a significant backer of Canada’s critical minerals sector. Last Friday, the DoD announced it is investing $15.5 million in a feasibility study at a tungsten mine in eastern Yukon owned by Fireweed Metals. The Canadian government is a partner in the project, upgrading roads and transmission lines.
The investment falls under the Defence Production Act, which is intended to streamline critical defense supply chains. Under the DPA, Canada is considered a domestic source of resources for the US, hence the DoD cash. This is the sixth such investment in a Canadian company and comes at a time when concerns are growing about stockpiles of minerals used in aerospace components, munitions and ground-vehicle armour.
China has dominated the sector, extracting 60 % of rare earth elements and processing 90% of global supply. Prices for many minerals have tanked because of Chinese oversupply, leaving North American companies struggling to attract capital. Canada’s production of minerals such as copper, nickel, cobalt and zinc has declined as a result.
The US and Canada have a new strategy: partner up to address unfair competition and deliberate over-production in the sector. The Fireweed deal is unlikely to be the last.
