The U.S. government is taking stakes in B.C. mining companies as it looks to reduce America’s reliance on China for critical minerals used to produce the high tech batteries for cell phones, electric vehicles and renewable energy.
On Monday, the White House announced it will take a 10 per cent stake in Vancouver-based Trilogy Metals Inc., which has mining interests in Alaska that the U.S. government wants to see developed.
The White House is spending $35.6 million US on the stake, and has options to increase it further in the future. The transaction remains subject to regulatory and other approvals.
The announcement came as U.S. President Donald Trump signed an executive order that directs a road to be built in Alaska allowing access to the Ambler mining district, an area rich in copper where Trilogy Metals has an interest through a joint venture.
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It can be hard to truly understand the motivations behind Donald Trump and his administration. But when looking at some of the countries that have found themselves in his crosshairs, there’s a throughline that binds them. Canada, Greenland and Ukraine are all rich in critical mineral resources. These metals are used in everything from cell phones to EV batteries to fighter jets.
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The long-debated Ambler Road project was approved in the first Trump administration, but was later blocked by the Biden administration after an analysis determined the project would threaten caribou and other wildlife and harm Indigenous people that rely on hunting and fishing.
“This proposed partnership with the U.S. Government represents a significant milestone for Trilogy Metals and for the development of a secure, domestic supply of critical minerals for America in Alaska,” Trilogy Metals CEO Tony Giardini said in a news release.
The partnership interest underscores the strategic importance of Trilogy’s Upper Kobuk Mineral Projects in supporting U.S. energy, technology and national security priorities, he said.
‘Benefit the American people,’ says U.S. Secretary
U.S. Secretary of the Interior Doug Burgum said the investment will help secure critical mineral supplies.
“They’re [Trilogy Metals] one of the companies that has mining claims in this area that is a remote wilderness right now, and again making that investment so we can make sure that we’re securing these critical mineral supplies and that ownership in that company will benefit the American people,” he said.
The U.S. government said last week it is also taking a minority stake in Lithium Americas, another Vancouver-headquartered company that is developing one of the world’s largest lithium mines in Nevada.
The Department of Energy (DOE) will take a five per cent equity stake in the miner. It will also take a five per cent stake in the Thacker Pass lithium mining project, a joint venture with General Motors.
Thacker Pass is considered crucial in reducing U.S. reliance on China for lithium.
Both Republicans and Democrats support the project and narrowing the production gap. China is the world’s largest lithium processor.
U.S. Energy Secretary Chris Wright said in a statement that the deal with Lithium Americas “helps reduce our dependence on foreign adversaries for critical minerals by strengthening domestic supply chains and ensures better stewardship of American taxpayer dollars.”
Thacker Pass is expected to produce 40,000 tonnes of battery-quality lithium carbonate per year in its first phase, enough to help power 800,000 EVs.
Lithium Americas said on Oct. 1 that it reached a non-binding agreement in principle with the DOE to advance the first draw of $435 million US on the federal loan. The DOE has agreed to defer $182 million US of debt service over the first five years of the loan.
The White House and Canada’s Lithium Americas seemed to be advancing with the deal late last month, as both parties agreed on changes to an approximately $2.3-billion federal loan that could allow the project to move forward to extract the silver-white metal used in electric vehicle batteries.
GM has pledged more than $900 million US to help develop Thacker Pass.
Shares triple
After the announcement of both deals with the Canadian miners, shares in the two companies soared.
Shares of Lithium Americas spiked more than 30 per cent when the partnership was announced, while shares of Trilogy Metals Inc. more than tripled in early trading on Tuesday.
Shares of Trilogy were up $7.86 at $10.79 on the Toronto Stock Exchange.
