Graphite One gets $37.5M defense grant to mine battery minerals

The U.S. subsidiary of mining company Graphite One will receive a $37.5 million Defense Production Act grant to develop a giant mine in Alaska.

Why it matters: The U.S. doesn't produce any graphite — the biggest ingredient by weight in EV batteries.

What's happening: The U.S. Defense Department is throwing its weight behind America's first new graphite mine, with money appropriated by the Inflation Reduction Act.

Flashback: Last year, President Biden invoked the Defense Production Act to speed local production of battery materials.

• The Korean War-era law empowers the federal government to make grants, contracts and loans to industries it says are critical to national security.
• Graphite was one of five minerals in the White House announcement last spring. The others: lithium, nickel, cobalt and manganese

The latest: Graphite One and its U.S. subsidiary, Graphite One (Alaska), is pursuing a feasibility study at the so-called Graphite Creek deposit in western Alaska.

• The company is aiming to mine the material and ship it to a proposed refinery in Washington.

Context: China produces nearly 70% of the world's graphite.

• Sen. Lisa Murkowski (R-Alaska) held up a lump of graphite on the Senate floor last week to call for domestic production of the mineral.

What's next: The Defense Department grant requires Graphite One to match the $37.5 million award — raising the likelihood of an equity raise.

Meanwhile, the White House in June conditionally committed $9.2 billion to Ford under the government's Defense Production Act authority to build three EV-battery factories.