With the money, permits and resources locked in, US Strategic Metals has positioned itself as a desperately needed sustainable domestic battery metals platform

Intent on repairing the widening gap representing a nonexistent American electric battery industry, US Strategic Metals (USSM) has transformed from humble beginnings as a mine site cleanup and reclamation business to a one-stop green battery metals platform taking the first steps toward a secure domestic closed-loop battery metals sourcing, processing and recycling solution.

The U.S. government has committed to establishing a domestic battery supply chain to support the anticipated demand for electric vehicles; however, to suggest the U.S. is behind in the race for sustainability is an understatement, as there is no battery industry to overhaul or supply chain in existence today.

Policymakers have consistently overlooked securing essential raw materials and early-stage processing, instead favoring downstream products, such as gigafactory construction.

"The last time the world experienced a global energy revolution – from coal to oil – in the early 20th Century, the US was the global leader in this transition," said Stacy Hastie, USSM co-founder and CEO. "That leadership position helped fuel the American Century and build a more stable, democratic world. Today, the stakes are just as high. America's abundance of strategic battery metals cannot be leveraged without building a sustainable, closed-loop battery industry – the clock is ticking."

U.S. production of raw materials does not match today's domestic battery demand, let alone approaching projected increases over the next decade. Over 90% of raw battery materials are sourced and processed from problematic foreign suppliers, creating massive supply chain vulnerabilities.

The internationally experienced USSM team looks to assert itself as a long-term sustainable battery platform and end-to-end domestic producer with a combination of IP, flexible processing technology, expansive natural resource endowment, and through what the company claims is a fortuitous location and permitting situation on a remediated site with room to grow.

mocobalt.com

Most global cobalt supply came from the DRC in 2023 via China, which controls massive stakes in battery metal mines and processing.

As of 2023, roughly 70% of global cobalt supply came from the Democratic Republic of the Congo (80% of which is controlled and/or processed by China) and approximately 40% of the global nickel supply from Indonesia, a new battery metals world player – both without U.S. Free Trade Agreements as potential Foreign Entities of Concern next to China, which still controls the lion's share of stakes in battery metal mines and processing plants and through which the global supply chain for EV batteries takes a route, at times through several degrees of separation.

Meanwhile, unregulated Indonesian processing and mining operations, according to S&P Global, yield up to three times more greenhouse gases.

Add to that some 90% of all cobalt and nickel for lithium (Li-ion) batteries destined for the US market making their way to the states via Chinese influence somewhere along the supply chain, importing battery minerals from overseas has raised plenty of environmental, social and governance (ESG) concerns.

Pivoting the business model

In 2018, USSM acquired the Madison Mine, a private mine that operated from 1844 to 1961 in Madison County, MO, and built its flagship facility. In 2003, the area was designated as a Superfund – an abandoned locale that falls under federal jurisdiction for stewardship and cleanup.

The initial phase of USSM's (previously Missouri Cobalt) Madison Mine Project was first to achieve environmental remediation, through which they could sustainably access available resources.

As part of the acquisition, USSM partnered with local government and the EPA to execute a five-year cleanup plan, with the initial business model being to reclaim metal-rich historical tailings from the old mine and produce a mixed metal concentrate product.

USSM constructed an onsite concentrator and started successfully processing material for shipment to Canadian smelters. However, the market for electric vehicles and demand for critical battery metals forced a business-wide reevaluation.

In 2020, the geologic and block models were updated to survey mine reserves, including a pre-feasibility study on a well-drilled resource with management estimates of reserves that include historic core and churn hole data.

USSM then decided to create a flexible, integrated processing facility to upgrade the concentrate further. Today, the mine life is projected at 17 plus years and growing, supporting both an important contribution to the energy transition and continued environmental remediation.

Ever focused on stewardship, USSM has explored environmentally friendly hydrometallurgical technology, resulting in the construction of a pilot plant in 2021 where they developed a proprietary technology called Metalox – producing battery-grade products with high margins and low CO2 emissions, improving industry standards across battery materials processing and refining.

USSM expects the technology to produce 61% lower CO2 emissions for cobalt and 45% lower for nickel over the established industry benchmarks.

In addition to the Bipartisan Infrastructure Law and Inflation Reduction Act, the U.S. Department of Defense (DOD) has allocated federal budget toward critical minerals through the Defense Production Act, which has allowed USSM to work with the DOD and U.S. Department of Energy (DOE) in order to compete fairly with the many state-sponsored actors across this competitive landscape.

USSM's unique position can make it a potential leader in reliable, ethically sourced, and environmentally friendly strategic metals for the U.S. and develop capacity to meet growing global demand for renewable energy industries while ensuring a secure domestic battery supply chain.

Expanding into recycling

Black mass is the new frontier in urban mining (comprised mostly of e-waste and battery recycling byproducts), and USSM has partnerships on a long-term feed contract, which will allow USSM to venture into the recycling business.

Construction has already begun for a first-of-its-kind combined concentrate and recycling hydrometallurgical plant that will produce nickel and cobalt sulfate, copper cathode, and lithium carbonate.

USSM has plans to begin commercial production by mid-2025. Phase 1 is set to handle 240 metric tons per day and will yield 3,800 metric tons of cobalt, 21,000 metric tons of nickel, and 6,400 metric tons of copper-contained metal, as well as 16,000 metric tons of lithium carbonate once fully operational in 2026.

CEO Stacy Hastie has an extensive background in environmental cleanup operations. The USSM board consists of industry leaders like Chairman Randy Waterfield, former Chairman of YPO, Willy Strothotte, former Chairman and CEO of Glencore, and Mike Patterson, co-founder of HPS Investment Partners. Operations and commercial teams are run by proven operators from the likes of industry leaders such as US Silica and Glencore.

"United States Strategic Metals is the only company able to deploy, along with long-term partners, a closed-loop raw material production and recycling process," said Waterfield. "Our ability to 'close the loop' enables USSM to lead the creation of a secure, reliable domestic battery industry not dependent on extended and vulnerable global supply chains."

"We congratulate USSM on securing this investment to expand its critical minerals recycling and processing operations in Fredericktown," said Mike Parson, Governor of Missouri. "Not only will this investment create good-paying job opportunities in the region, but it will also strengthen supply chains and allow Missouri and the nation to be less reliant on nations like China. The demand for domestic battery production and critical mineral exploration is on the rise, and this investment proves Missouri is well-positioned to capitalize on that opportunity and emerge as a national leader."

In December of 2023, USSM announced it had reached nearly $500 million in funding and commitments. The most recent included a $230 million commitment from affiliates of Appian Capital Advisory LLP with initial funding of a $120 million secured term loan facility and a $70 million secured royalty financing arrangement.

Past funding commitments included approximately $120 million from HPS Investment Partners and $50 million from valuable offtake and sourcing partner Glencore International AG, all of which underscore the company's compelling potential and ability to raise capital in a difficult environment.

USSM possesses the resource endowment, flexible proprietary technology, a centralized location for grounding a sustainable U.S. battery supply chain, capital requirements met with permits already in place, and a notable and experienced team, all signaling that the company has positioned itself as the sustainable domestic battery metals platform the U.S. needs today.