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The United States government says it will provide a US$754-million loan to construct a synthetic graphite plant in Tennessee to Novonix Ltd., whose chief executive Chris Burns is based in Halifax, where it maintains its research labs, though it is publicly listed in Australia.
The loan is just one example of how U.S. President Joe Biden‘s administration’s focus on building out a North American critical minerals supply chain has often accrued to the benefit of Canadian-based companies, many of which have struggled to raise money on public markets in the face of moribund commodity prices.
In total, such companies have received hundreds of millions of dollars in support from the U.S. government and many industry insiders say there could be more deals announced before Donald Trump takes over next month.
“Up until January 20, 2025, I think you’re going to continue to see the types of agreements we saw with Novonix yesterday,” Chris Berry, president of House Mountain Partners LLC, a strategic metals advisory firm, said. “Biden and his Department of Energy are incentivized to get as much money out the door as they possibly can.”
Congress has already approved legislation that sets aside funds for critical minerals projects, he said, but unless it is awarded to specific companies, the incoming Trump administration could decide to shift policy and simply not dole out the money for such purposes.
Many other critical minerals companies besides Novonix, which has ambitions to be a major player in the battery sector, have received commitments of various forms from U.S. government agencies during the past few years, sometimes even for projects located in Canada.
London, Ont.-based Fortune Minerals Ltd. in May announced an $8.7-million grant from the U.S. Department of Defense to support its efforts to develop a cobalt-gold-bismuth-copper deposit in the Northwest Territories, and Toronto-based Electra Battery Materials Corp. in August said it had received a US$20-million grant to help build a cobalt refinery in Ontario.
In another deal, the U.S.-based Export-Import Bank in October announced a potential loan of US$325 million to Vancouver-based Graphite One Inc. to support the development of a graphite deposit in Alaska.
Graphite is used in battery anodes, but China dominates that supply chain, refining around 90 per cent of the total supply.
“Critical minerals have been the flavour of the month for a couple of years now,” Berry said, “but it all boils down to commodity price … and so many of these metals have just been beaten up.”