Lithium ore.

Lithium ore. (Carla Gottgens/Bloomberg)

Albemarle and Talon Metals are getting about $110 million in new U.S. government funding to support the expansion of domestic mining of lithium and nickel, two metals critical to the nation’s energy transition.

Albemarle, the world’s largest lithium producer, will get $90 million to help support the miner’s planned reopening of its Kings Mountain, N.C., lithium mine. Nickel miner Talon Metals will get $20.6 million to advance exploration of its Tamarack Intrusive Complex in Minnesota. The agreements, under the Defense Production Act, were announced Tuesday by the Defense Department.

The funding comes as the U.S. battles to secure self-sufficient supply of the minerals critical to producing batteries for electric vehicles and other products needed for the energy transition. China has long been the dominant supplier or processor in the global race for many of these commodities, causing the Biden administration to bolster the U.S. position with legislation that includes billions of dollars in grants and tax incentives for suppliers.

President Joe Biden in early 2022 invoked Cold War-era powers of the 1950 Defense Production Act to boost domestic production of battery materials, helping give mining companies access to $750 million under the Title III fund. The latest funding follows other Defense Department announcements, including a $37.5 million grant to Graphite One announced in July to help the start-up develop North America’s largest deposit of the material.

Albemarle envisions reopening the Kings Mountain mine with an initial annual capacity of 50,000 metric tons in 2027. The Charlotte, N.C.-based company operates the only active lithium mine in the U.S., at Silver Peak, Nev.

Tamarack, a joint venture between Talon and Rio Tinto Group, isn’t in commercial production yet, but Tesla already agreed to purchase 75,000 tons of nickel concentrates from the Minnesota project. The mine will also produce copper and cobalt.

The U.S. government’s road to securing a fully domestic supply chain of critical materials could be long. China’s head start makes it the go-to producer for everything from rare-earth elements to lithium-ion batteries. Critics say these grants and loans by the U.S. government pale in comparison to the amounts needed to compete with the behemoth. Bloomberg’s Yvonne Yue Li contributed to this report.

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