$72 Billion Fund Revives Domestic Critical Minerals Mining

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By Patrick Davis

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Biden's $72B fund for critical minerals like graphite delivers a significant boost to domestic mining. Discover why Graphite One (TSX: GPH) is worth watching.

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The Biden administration has boosted the domestic mining sector by confirming that projects involving critical minerals like graphite, lithium, and cobalt may be eligible for a $72 billion federal loan fund. This move aims to strengthen the domestic mining industry and secure energy and supply networks. This development could be particularly advantageous for companies like Graphite One Inc (TSX-V: GPH) (OTCQX: GPHOF). Many companies engage in operations that are strategically important to the U.S. economy and have received support in various forms to enhance domestic production capabilities, including Tesla (NASDAQ: TSLA) and Freeport-McMoRan Inc (NYSE: FC).

Graphite One (G1) is advancing the development of the largest graphite deposit in the United States. The company has already received two significant grants from the US Department of Defense.

According to the Energy Department, mining projects involved in critical minerals mining such as graphite, lithium, nickel or cobalt can access the $72bn fund through the Loan Programs Office’s Title 17 Clean Energy Financing Program. This funding supports innovative energy and supply chain initiatives. The move comes in response to China's dominance in the market and the increasing global demand for these essential minerals.

To qualify for a loan guarantee under Title 17, a project must be related to energy and located within the United States or its territories. It should demonstrate the capability to significantly reduce, utilize, or sequester greenhouse gases and air pollutants. The technology used must be commercially viable, and the project should have a solid repayment strategy. Additionally, the application must include an analysis of the benefits it will bring to the community. Graphite One is expected to meet the critical criteria for this type of support, and securing a loan guarantee would be a significant catalyst for the company to accelerate its graphite project and advance its operations.

Senator Lisa Murkowski, senior senator from Alaska, has long highlighted the importance of reducing US dependence on foreign mineral supplies by enhancing domestic mineral production and processing capabilities. She has publicly supported Graphite One’s efforts in the past and is thought to be the driving force behind this latest $72 billion federal loan fund.

Graphite One Inc (TSXV: GPH)(OTCQX: GPHOF) is well-positioned to benefit from the rising demand for graphite, a critical material in lithium-ion batteries and various technological manufacturing processes. As the adoption of these batteries increases, the demand for graphite is expected to surge significantly. Projections by the World Bank suggests that the graphite market could grow by 494% by the year 2050, indicating strong potential for substantial growth in this sector. G1’s Graphite Creek Property is designed to establish a fully integrated, all-American supply chain for battery materials, focusing on the mining, processing, and manufacturing of anode materials. Alongside a proposed state-of-the-art manufacturing plant, the company plans to construct a recycling facility in Ohio. This facility is anticipated to be dedicated to recovering graphite and other components from used batteries, complementing the mining operations at the Graphite Creek Property in Alaska. This integration aims to enhance the sustainability and efficiency of the U.S. battery materials supply chain.

Tesla (NASDAQ: TSLA) is known for benefiting from various forms of government support, such as significant tax incentives and grants, particularly in the early stages of its growth. While Tesla itself is not directly involved in the mining or extracting of critical minerals, its need for lithium, cobalt, graphite, nickel, and other minerals critical to battery production indirectly ties it to the critical minerals sector. For its Gigafactory in Nevada, which produces battery cells and assembles electric vehicles, Tesla negotiated substantial state-level tax incentives. These incentives were critical in Tesla's decision to locate its production facilities in Nevada. Tesla’s demand for these materials influences global supply chains and has implications for mining and extraction industries. Additionally, Tesla has shown interest in securing more direct sources of critical materials to ensure the sustainability and stability of its supply chain for battery production.

Freeport-McMoRan Inc (NYSE: FC) is another large business that has benefited from federal support. A leading international copper miner, Freeport-McMoRan has benefited from various government initiatives aimed at boosting domestic mining activities. Through its subsidiary Freeport Minerals Corporation, the company operates two mines in Arizona and is a part of the Department of Energy's (DOE) recent initiative to allocate $475 million for clean energy projects on mine lands across the country. The investment is expected to generate 121 jobs in construction and operations at the sites managed by Freeport Minerals Corporation. Additionally, the company has committed to offering scholarships to up to 300 Native American students from 14 tribes, supporting educational opportunities in communities affected by mining activities.

The Department of Energy has highlighted the urgency of expanding mining activities due to China's dominance in the critical minerals industry and the escalating global demand for these resources. Supply chain weakness creates economic vulnerabilities, weakened energy security, and reliance on unstable foreign sources that often do not uphold stringent environmental or labor standards. In response, the Biden administration is advocating for increased mining exploration and development within the United States to mitigate these risks and strengthen national security and economic independence.

Furthermore, Senator Murkowski has consistently highlighted the U.S.'s decades-long absence of domestic graphite production and its total dependence on imports, primarily from China. She has also raised alarms about the U.S.'s inadequate capabilities in processing natural graphite into forms suitable for advanced technologies—a field where China maintains a strong lead. Her persistent efforts to secure funding for initiatives like Graphite One are starting to yield results, paving the way for a secure domestic supply chain for graphite and other critical minerals. These developments are crucial steps toward forging a pathway to enhancing national security and economic independence.

It’s believed Senator Lisa Murkowsk’s legislative efforts have helped create access to this $72 billion loan from the U.S. Department of Energy (DOE). Recent updates to the DOE's Title 17 loan guarantee program guidelines now make U.S. mining projects that produce critical minerals eligible for this funding. This pivotal change enables these projects to obtain low-cost financing, which is expected to boost domestic production and reduce reliance on imported minerals, thereby strengthening the U.S.'s mineral independence. Graphite is counted among the official US Government-listed Critical Minerals that need secure supply channels, suggesting Graphite One could be a strong contender for this federal loan guarantee program.

Discover more about Graphite One and its plans to solidify a US graphite supply with an all-American battery materials supply chain solution.

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