The United States Department of Defense (U.S. DoD) is providing the world’s top lithium company with US$90 million to support domestic production of the metal as demand for it continues to rise.
Albemarle Corporation (NYSE: ALB) will be using the funding for the restart of its Kings Mountain lithium mine in North Carolina and a fleet of new equipment needed at the site. The DoD says the funds will be appropriated from the country’s Inflation Reduction Act and the mine is expected to be operational as early as late 2026.
The site is anticipated to support the manufacturing of 1.2 million electric vehicles per year and Albemarle says it contains one of the few hard rock lithium deposits in the U.S.
“Lithium is an essential ingredient in our sustainable energy future. Demand is expected to increase significantly, and it is imperative to secure our nation’s supply of this critical resource,” said Eric Norris, President of Energy Storage at Albemarle.
The funding agreement between the DoD and Albemarle is part of the country’s Manufacturing Capability Expansion and Investment Prioritization (MCEIP) department’s five-year investment plan to secure supply chains for minerals and other essential materials.
The news comes after a major lithium deposit, possibly the world’s largest, was discovered along the Nevada-Oregon border last week.
The DoD’s MCEIP department also announced the signing of an agreement with Talon Metals Corp. (TSX: TLO) on Tuesday and will be providing the company with US$20.6 million to support its nickel exploration in Michigan and Minnesota. Talon will be matching the amount on a cost-share basis over a 39-month period.
“With this funding, Talon will be able to accelerate our efforts to discover domestic sources of battery-grade nickel and help ensure that the U.S. is not dependent on Russia, China or Chinese companies operating in countries like Indonesia for nickel that is needed in both defense platforms and clean energy systems,” said Talon’s CEO Henri van Rooyen.
Albemarle shares dropped by 0.8 per cent Tuesday to US$184.45 on the New York Stock Exchange and have steadily declined by almost 38 per cent in the past year.
Talon stock rose by 4.8 per cent to $0.27 on the Toronto Stock Exchange and has also steadily dropped over the past year, by 46.5 per cent.