Department of Defense awards $37M to Graphite One mining project near Nome

WASHINGTON — The Department of Defense has awarded $37.5 million to a graphite mining prospect in Western Alaska.

The Graphite Creek project is located about 40 miles north of Nome and is thought to be the largest natural graphite deposit in the U.S. Federal and industry officials say if it is developed, it would stabilize the graphite supply chain and boost economic development in Alaska.

The U.S. Geological Survey considers graphite a “critical mineral” that is essential to the domestic economy and national security, but the U.S. currently imports 100% of its graphite, with 70% of the mineral coming from China. Demand for graphite is rapidly growing as the mineral is a key ingredient in smartphone and electric vehicle batteries.

The money will go toward fast-tracking a feasibility study, which will inform a production decision from Graphite One — a Canada-based company that owns the prospect. The grant will cover half the cost of the study and the company will put up the rest, totaling $75 million.

Graphite One plans to process the mineral into concentrate at a nearby plant and manufacture the graphite at a facility in Washington. The plan also includes a Washington recycling facility to reclaim graphite.

[Earlier coverage: New US climate law could lead to a mining ‘renaissance’ in Alaska, drawing excitement and concern]

“This Department of Defense grant underscores our confidence in our strategy to build a 100% U.S.-based advanced graphite supply chain — from mining to refining to recycling,” said Anthony Huston, Graphite One Inc. CEO, in a statement.

The grant comes from the Defense Production Act, which seeks to enhance and maintain domestic production capabilities for national defense. President Joe Biden invoked the Defense Production Act last year to decrease reliance on imported critical minerals, including graphite. The Inflation Reduction Act appropriated funding for the grant.

While further exploration and analysis is necessary, Jamey Jones with the U.S. Geological Survey estimated last year that about two-thirds of the 50 critical minerals could be produced in Alaska.

Deantha Skibinski, the executive director of the Alaska Miners Association, said she hopes the Graphite One grant will lead to more collaboration between the federal government and Alaska mining projects.

“One thing that is exciting about this grant and this microscope on a project in Alaska is we are hopeful that it will generate more interest in seeing what other mineral deposits in Alaska could be uniquely qualified to have the federal government provide grants or do a partnership,” Skibinski said in an interview.

Alaska Gov. Mike Dunleavy welcomed the grant funding on Monday, and thanked the Alaska congressional delegation for supporting the project. The delegation backed the project’s application for the Defense Department grant.

Murkowski spoke on the Senate floor in support of the Graphite Creek Project earlier this month.

“It will be a secure supply of natural graphite from day one without the political and security risks associated with so many projects that are located abroad,” she said.