Pentagon funding draws Canadian mining industry closer to US war machine
Written by: Owen Schalk
In late May 2024, the US military transferred $15 million to two Canadian mining companies: Fortune Minerals, which operates a cobalt-gold-bismuth-copper mine in the Northwest Territories and a refinery in Alberta, and Lomiko Metals, a Quebec-based graphite and lithium miner. The funding was allocated through the Cold War-era Defense Production Act. After the news broke, the CBC plainly stated the reason behind the US military’s hunger for Canadian minerals, in a section heading: “What’s driving it: US fear of China.”
US companies have been unable to compete with China on high-tech production. Earlier this month, the sluggishness of US production led President Joe Biden to impose sweeping tariffs on Chinese electric vehicles, the best-selling EVs on the global market. Canada, following Washington’s lead, is now considering EV tariffs.
In a tacit admission of the failure of Washington’s market-driven economic policy, Biden claimed that Beijing’s substantial subsidies for its EV industry, a state-led approach to EV development, is “unfair.”
That the Pentagon is directly funding Canadian mines shows Washington views its economic inferiority as a national security issue. And more Pentagon money may be incoming, as the US has allocated over $500 million in cross-border mineral funding. In fact, mining companies in the Ring of Fire stated that the US has expressed interest in funding their projects, despite committed resistance to mining from many Indigenous nations in the region. Companies in the Ring of Fire that have been contacted by the US Department of Defence include Wyloo Metals, Electra Battery Materials Corp., and Avalon Advanced Materials. So, the Pentagon may target the Ring of Fire in its next round of funding.
Canada jumps where the US tells it to
In June 2021, the Biden administration released a report on “building resilient supply chains.” The report describes the US’s technological inferiority to China, and America’s resultant reliance on the Chinese market for important tech inputs, as a national security risk. “For an issue so central to U.S. economic and national security,” the report states, “we cannot afford to be agnostic to where these technologies are manufactured and where the associated supply chains and inputs originate.”
Put differently: “China is a sovereign country, an economic powerhouse that pursues its own interests. We can’t push them around. Canada, however, is utterly subservient. We can get anything we want from them.”
The CBC claims funding from the US military has “no strings attached,” but also notes that “in a national-security crisis, the U.S. military could demand these supplies — say in the event of a severe trade war, or worse, a shooting war in the Asia-Pacific.” Given the US government’s belligerent actions toward China in the past several years, it often appears that the US is indeed planning for such a war. And if war broke out, the US would view Canada as an important supply of resources in the fight against China – and it seems Ottawa is more than willing to place its mining industry at the behest of the US war machine.
The US military first announced that it would consider funding Canadian mines in November 2022. At the time, CBC noted that “Canadian mining is becoming the nexus of a colossal geopolitical struggle.” In March 2023, Biden reiterated his promise to fund Canadian mines.
Why are Canadian projects even eligible for US military funding? CBC News journalist Alexander Panetta writes that “[it’s] because Canada has, for decades, belonged to the U.S. military industrial base and is every bit as entitled to the cash as American mining projects.” But why does Canada “belong to the US military industrial base?” Because Canadian sovereignty does not exist, even as the state robs Indigenous nations of theirs. As this author explained in Canada in Afghanistan: A story of military, diplomatic, political and media failure, 2003-2023, the US military has long sought to ensnare the Canadian defence industry so Canada’s capitalist class receives benefits from supporting US imperialism:
“…the US government explicitly sought entanglement of the Canadian and American defence industries in the mid-twentieth century. Washington hoped that increasing the economic interdependence of the two countries would lead the Canadian government to support US militarism since Canadian companies would also benefit. As a 1958 US national security document notes, Washington considered it important to maintain a ‘healthy…Canadian defence industry’ so the US would ‘receive the same excellent cooperation in the joint defence effort that has prevailed in the past.’”
Canada has supported the US through all its imperialist wars, from Korea and Vietnam to Afghanistan and Iraq, because many Canadian companies enrich themselves through Washington’s globe-spanning imperialist violence. Mining companies are merely the latest Canadian companies to benefit from Washington’s aggressive actions on the world stage.
Mining for hypocrisy
Ottawa’s decision to allow the US military into Canada’s mining industry is utterly hypocritical when one recalls they barred three Chinese companies from the Canadian mining sector in late 2022, citing “national security.” At the time, industry minister François-Philippe Champagne stated, “we will act decisively when investments threaten our national security and our critical minerals supply chains, both at home and abroad.”
As the Canadian government sought to squeeze China-based companies out of its mineral sector, the Globe and Mail claimed that “Front and centre on the heavily restricted list are companies with ties to the authoritarian Chinese state.”
Ottawa’s hypocrisy deepens when one remembers what become of the Canadian Ombudsperson for Responsible Enterprise (CORE). Born out of Trudeau’s promise to establish an independent ombudsperson on mining, the CORE was soon revealed to be a cynical effort at deflecting criticism of Canadian abuses around the world. For instance, the CORE cannot compel mining companies to hand over information. The ombudsperson’s inability to properly investigate the Canadian mining industry sparked mass resignations within the CORE’s office. As Yves Engler writes:
“By the spring of 2019, all fourteen of the union and NGO representatives advising on CORE’s work resigned, complaining that the government had ignored everything they said. In March of this year, Liberal MP John McKay reportedly confronted Mary Ng, minister of Small Business, Export Promotion and International Trade, over the government’s failure to provide CORE with sufficient investigative powers.”
In 2023-2024, the CORE finally released its findings on Canadian mining abuses abroad – and they all related to the use of alleged “Uygher forced labour” by companies working in China’s Xinjiang province. The CORE has not bothered to investigate mining companies in Guatemala, where Canadian interests have a long and documented history of involvement in violence (including assassinations) against mining opponents. There have been no investigations into Canadian mining in Peru, Ecuador, Mexico, or any other countries where Canadian mining companies have been connected to such crimes. No. Just China. It is obvious that the CORE, far from holding the Canadian mining industry accountable for its manifold abuses, has been wholly coopted into the new Cold War against China.
With new funding from the Pentagon, the Canadian mining industry is becoming even more integrated with the US military and its imperialist policies toward China. By allowing this integration to continue, Ottawa is once again showing the emptiness of its claims about the Canadian mining industry’s leadership in environmental, social, and governance matters (ESG).
If a company’s alleged ties to an “authoritarian” state are enough to warrant a national security risk, then Canadian mining companies should not be permitted to accept one cent from the US military. But no – the Canadian government is actively tethering our mining industry to a blood-drenched war machine responsible for millions of deaths around the world, including those killed with American arms in Israel’s ongoing genocide against Palestinians.
This does not bode well for the thousands of activists in Canada who have long sought to hold the Canadian mining industry accountable for its laundry list of corruption, ecological destruction, and violence at home and around the world.
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Owen Schalk is a writer from rural Manitoba. He is the author of Canada in Afghanistan: A story of military, diplomatic, political and media failure, 2003-2023 and the co-author of Canada’s Long Fight Against Democracy with Yves Engler.
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