The US Department of Defense (DoD) has announced $20.6m in funding for the development of the proposed Talon nickel mine in the northern state of Minnesota. 

The funding forms part of a programme seeking to strengthen US critical mineral supply chains and will support prospecting work in Michigan and Minnesota. The announcement follows a $114m funding package from the Department of Energy last year to develop Talon Metal’s ore processing plant in North Dakota. 

 The Defense Production Act allows the president to expediate and expand the supply materials and services needed for national defence. 

Nickel is used both in high-temperature alloys required for the aerospace industry and in stainless steel and lithium-ion batteries. 

According to the announcement published on 12 September, the US only has one operating nickel-cobalt mine, which is currently expected to close in 2026 unless more suitable ore is discovered. The Eagle Mine is located on Michigan’s Upper Peninsula. 

“This award exemplifies the DoD’s commitment to strengthening the resilience of critical supply chains and lessening our reliance on foreign sources of vital materials,” said Anthony Di Stasio, director of the DoD programme. 

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By GlobalData

The announcement comes despite a decision by the White House earlier this year to protect wilderness areas in north-eastern Minnesota from mining activity. Under the order, signed in January, certain areas cannot be subject to geothermal or mineral leases for 20 years. 

Talon said it will also contribute $21.8m in matching funds over a three-year period. It will use the money to buy equipment, hire employees and find more high-grade nickel deposits, primarily in Michigan. 

“With this funding, Talon will be able to accelerate our efforts to discover domestic sources of battery grade nickel and help ensure that the United States is not dependent on Russia, China or Chinese companies operating in countries like Indonesia for nickel that is needed in both defence platforms and clean energy systems,” said Henri van Rooyen, CEO of Talon. 

On 12 September, the DoD also announced a $90m agreement to develop lithium deposits in the country. The funding will support chemicals company Albemarle‘s planned reopening of the Kings Mountain lithium mine, which will be operational between 2025 and 2030.  

The lithium funding, which also falls under the Defence Production Act, comes alongside financial support from the Inflation Reduction Act. The wide-ranging policy package seeks to increase investment in clean energy technologies in the US. 

“The agreement with Albemarle demonstrates the DoD’s ongoing commitment to meeting the needs of our warfighter, today and in the future,” Di Stasio added in a statement