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The last few yearsmay have been a sharp wake-up call to U.S. legislators. Growingprotectionist sentiments around the globe and geopolitical concernslike the Russia-Ukraine War have devastated supply chains for keymarkets.
TheRussia-Ukraine war has caused major disruptions in the agriculturaland automotive industries. Russia and Ukraine account for asubstantial portion of the global fertilizer trade. Russiaproduces 9% of the world’s nitrogen fertilizer, 10% ofphosphate fertilizer and 20% of potash fertilizer. Russia is also akey supplier of metals and minerals needed to produce cars.
Other major producerslike China have demonstrated a willingness, and perhaps eagerness, tolimit exports when it suits them either politically or economically. Chinaannounced in July that it would be extending its exportrestrictions on phosphate fertilizer through the end of 2022.
The US and Europeancountries are becoming warier of the mineral and materialoverdependence on rivals like China and Russia. InSeptember, the U.S. Department of Agriculture announced itwill invest $500 million to increase domestic fertilizer production tohelp with supply chain disruptions from Russia. This commitment isdouble the amount of its previous commitment.
The US also announced that Canadiancountries qualify under the 1950 Defense Production Act (DPA). Thismeans that an investment in Canada by the Department of Defense willlegally be the same as an investment domestically, opening a lot ofdoors in Canada.
What Is Driving This Shift And What Does ItMean?
PresidentJoe Biden’s administration has national security concerns overheavily relying on rivals for key minerals and metals. The principalindustry Biden is worried about, although there are many impacted bystrict Chinese exports, is the automotive industry.
In the coming decades,the electricvehicle (EV) market may be set to explode and currently, theEV battery supply chain is reliant on too many foreign countriespresenting a potential national security threat. The US is eager tochange this and become a producer or create strategic partnershipswith allies for the critical materials needed for a shift toEVs.
Canadiancompanies qualifying under the DPA will allow the Department ofDefense to capitalize on Canada’s fruitful natural resourcelandscape. Canadahas reserves of key resources like cobalt, potash, phosphate,lithium, copper, and more.
Canada has provided the DOD with a list of 70 projects that could warrant U.S. funding under theDPA and the U.S. is ready to invest. The U.S. military has a new potof money for investing in private companies with new miningprojects.
Companies like Arianne Phosphate Inc. (TSX-V: DAN) (OTC:DRRSF), a potentially promising phosphate mining company, might be thetype of targets the US military is looking at. Arianne Phosphate isamong the few in North America that can respond to the growing demandfor phosphate.
Because phosphate isan essential component in fertilizers and lithium-iron phosphatebatteries for EV cars and energy storage, the company could be ofinterest for DOD projects. The DPA opens up hundredsof millions of dollars in spending and President Joe Biden’sadministration has indicated a high interest in creating a strongdomestic EV battery supply chain. Although there are still logisticalkinks to work out with the DPA, it seems clear that America will beturning away from rivals and looking to Canada for resource extractionfor key industries like EVs.
ARIANNE PHOSPHATEINC. ( www.arianne-inc.com )owns the Lac à Paul phosphate deposit in Quebec, Canada. Fullypermitted and shovel ready, the asset is among the world’s largestgreenfield deposits, capable of producing an environmentally friendlyphosphate concentrate. Due to the nature of its high-purity,low-contaminant product, Arianne’s phosphate can be used to producefertilizer as well as meeting the technical requirements of specialtyapplications such as the lithium-iron-phosphate (LFP) battery. The Lacà Paul deposit is rare due to its geographic location and geologicalstructure. Arianne Phosphate is listed on both the TSX-V: DAN and the OTCQX: DRRSF .
This post contains sponsoredadvertising content. This content is for informational purposes onlyand is not intended to be investing advice.
Thisinformation contains forward looking statements. All statements, otherthan statements of historical fact, included herein, including withoutlimitation, statements regarding potential mineralisation andreserves, exploration results and future plans and objectives ofArianne Phosphate Inc, are forward-looking statements that involvevarious risks and uncertainties. There can be no assurance that suchstatements will prove to be accurate and actual results and futureevents could differ materially from those anticipated in suchstatements. Important factors that could cause actual results todiffer materially from Arianne Phosphate Inc’s (“AriannePhosphate” or the “Company”) expectations are disclosed underthe heading "Risk Factors" and elsewhere in Arianne PhosphateInc’s documents filed from time-to-time with the TSX Venture andother regulatory authorities.
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