What's behind a historic, unusual U.S. military cash transfer to Canadian mines

The United States was growing desperate, months before its entry into the Second World War. It was gravely short of aluminum, and scrambling for suppliers.

Its solution: turn north to Canada. 

American public money flooded into Quebec, building the aluminum industry that supplied raw materials for Allied planes and tanks.

"I would be willing to buy aluminum from anybody," said Harry Truman, then still a U.S. senator, in 1941 hearings on the topic.

"I don't care whether it is the Aluminum Company of America or Reynolds or Al Capone."

Now, in an era of global tension, the Americans are looking north again.

The U.S. military has, for the first time in generations, spent public money on minerals projects inside Canada: nearly $15 million US to mine and process copper, gold, graphite and cobalt in Quebec and the Northwest Territories.

It might not be the last: Officials expect additional cross-border announcements under the more than half-billion-dollar U.S. program.

These minerals are vital ingredients in an endless array of civilian and military products — including medicine, batteries, electronics, engines, cars, planes, drones and munitions.

The context, this time, is China.

The U.S. has expressed escalating unease over its dependence on its biggest rival. China controls the global mineral supply, has cut off minerals exports in the past, and fears a potential standoff with the U.S. over Taiwan.

Washington said two years ago that it was weighing funding Canadian mining startups under the U.S. Defense Production Act (DPA). It promised funding last year, and this month, it formally revealed the first such initiatives.

The novel nature of the announcement was scarcely conveyed in the dry language of the press release, which referred to a Canada-U.S. co-investment.

What's uncommon here isn't Canada's government funding Canadian mining companies. It's the American military funding them, for what's believed to be the first time in the 74-year history of the U.S. DPA, which created new powers for the president to fund or buy certain products as a national-security matter.