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US Strategic Metals (USSM), a private company formerly known as Missouri Cobalt, has received a non-binding Letter of Interest from the Export-Import Bank of the United States (EXIM Bank) for a potential $400 million debt funding package for Madison, their flagship cobalt mining project.
The loan, which could extend up to 15 years, may qualify for special consideration under EXIM Bank's China and Transformational Export Program, a congressional initiative aimed at bolstering American companies' competition with Chinese entities in critical sectors, including energy storage and renewable energy.
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The Madison project, located near Cobalt Village in the Mine La Motte-Fredericktown Mining District, is considered one of the largest cobalt reserves in North America.
The site spans 7.3 square kilometers and has a rich history dating back to its discovery in 1847 and operation until 1961. In recent years, USSM has focused on rehabilitating the area designated a Superfund site by the U.S. Environmental Protection Agency due to past environmental damage.
The project is estimated to hold 72 million pounds of recoverable cobalt, 105 million pounds of nickel, and 103 million pounds of copper—essential materials for the green energy sector.
Cobalt is essential in the production of lithium-ion batteries. According to GlobalData, the U.S. contributes a mere 0.36% to global cobalt production, an amount insufficient to meet domestic industrial needs.
However, the cobalt market has been volatile. After a sharp price surge from $30,000 per metric ton in April 2020 to $82,000 in April 2022, cobalt prices have since plummeted below $30,000.
This price collapse has significantly impacted U.S. domestic production, including the temporary halt of operations at the only operating cobalt mine in Idaho.
A $400 million investment could significantly reduce the US's reliance on foreign sources of cobalt. Currently, the Democratic Republic of Congo dominates global production with over 70% of the market share. Yet, it is an unstable jurisdiction that, per the Associated Press, recently experienced a failed coup d’état and has been criticized for using illegal child labor.
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