In a bid to enhance the North American critical minerals supply chain, the Canadian and US governments announced a co-investment in two Canadian companies under the Canada-US Energy Transformation Task Force.

“Canada is positioning itself as a global leader in the supply of responsibly sourced critical minerals for the green and digital economy,” said Jonathan Wilkinson, Canada’s minister of energy and natural resources.

“Through our work with the United States and other allies, we are developing secure critical minerals value chains that will power a prosperous and sustainable future,’ he added in a Thursday (May 16) press release.

The countries’ goal is to accelerate the development of crucial minerals essential for the defense, clean energy and high-tech industries, ensuring secure and sustainable supply for the continent.

Fortune Minerals (TSX:FT,OTCQB:FTMDF) and Lomiko Metals (TSXV:LMR,OTCQB:LMRMF) are the recipients of the funds, with the latter set to receive up to C$7.5 million from the Canadian government, matched by an additional US$6.4 million from the US Department of Defense’s Defense Production Act Investments Office.

The funds will help advance the NICO project, which is focused on cobalt, bismuth, copper and gold.

Robin Goad, Fortune’s president and CEO, expressed his appreciation for the grant, commenting in a release, “It has been difficult attracting investment funding for essential Critical Minerals projects in traditional capital markets. We are therefore grateful for the U.S. Defense Department’s timely and strategic financial support to enable Fortune Minerals to accelerate development of the NICO Project to provide additional domestic capacity and security of supply.”

Located in the Northwest Territories and Alberta, the NICO project aims to become a reliable North American supplier of cobalt sulfate, which is crucial for the lithium-ion battery industry. The company also has plans for a hydrometallurgical refinery in Alberta to process mined concentrates into valuable metals and chemicals.

Lomiko Metals will receive C$4.9 million from the Canadian government alongside US$8.4 million from the US.

The funding will support pilot plant testing to convert flake graphite into battery-grade material, addressing the growing demand for high-quality graphite in the production of electric vehicles and energy storage solutions.

The North American critical minerals supply chain is currently challenged by heavy reliance on foreign sources, particularly from politically unstable regions like the Democratic Republic of Congo, which is the top producer of cobalt by far, and countries with strong refining capacities, such as China. Developing domestic resources in Canada and the US is essential to reducing this dependency and ensuring stable future supply of these vital materials.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.