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On December 13th, the US Department of Defense and Canadian government combined to  a total of up to $25M US in grant funding to Fireweed Metals, a Canadian mining development company, to advance the Mactung tungsten project toward a final investment decision and enable Fireweed to build some necessary project infrastructure. By funding specific requirements of the mine 鈥� permitting work, development studies, and infrastructure 鈥� that are among the most important for Arctic critical minerals projects and the least financeable by private capital, the US and Canada鈥檚 support for Mactung can be seen as a model for how to best advance critical minerals production in the Arctic. 

, one of the world鈥檚 largest tungsten deposits, sits east of the Continental Divide on the border between the Yukon and the Northwest Territories. It is remote even by the standards of the Canadian Arctic; the closest human settlement, the 355-person First Nation community of Ross River, is 200 km away. Two airstrips, one on either side of the provincial boundary, provide access in winter. The deposit (known as Mactung) was first discovered in 1962 near the MacMillian Pass, but has never been developed, despite its world-class size and high grade.

That may change in the coming years. 

Image Credit

Fireweed Metals

The Mactung project鈥檚 location. Image credit: Fireweed Metals

Tungsten is a minor metal in terms of market size (est. $5 billion in 2024) and is mostly used in tungsten carbide drill bits and other applications that call for particularly hard metals or alloys. DOD is funding Mactung through  of the Defense Production Act of 1950, which 鈥�targets investments that create, maintain, protect, expand, or restore domestic industrial base capabilities that are critical to the Department and the American Warfighter.鈥� Only about 8 percent of tungsten worldwide is actually used directly in defense applications, according to the I, but the language of the  emphasizes the criticality of tungsten nonetheless, calling the metal 鈥渁 critical input for military-grade steel production, aerospace components, munitions, and ground vehicle armor.鈥� 

China currently controls 80 percent of the tungsten mining and processing supply chain and has been  restrictions on tungsten exports to the US in recent months (along with other minor, but critical and overwhelmingly China-dominated metals like gallium, germanium, and antimony). The US has been proactively working to scale back dependence on Chinese tungsten; the  prohibits the use of Chinese tungsten in military technologies starting in 2027 (bizarrely defining tungsten as a 鈥渞are earth metal鈥�), and the US  25 percent import tariffs on Chinese tungsten products the day before the Mactung funding decision.

The Mactung grant can arguably be seen as a blueprint for US polar leadership with respect to critical minerals, as well as highlighting the priorities of US leadership in the Arctic. Mactung is far from the only current or potential source of ex-China tungsten, nor is it likely to be one of the first new ones developed. On its own, the joint grant is not necessarily a difference-maker for the project. Fireweed, backed by the Lundin Group, a Swedish/Canadian mining consortium, has been steadily advancing Mactung with private market funding for several years. But in fact, what is interesting about Mactung is that DOD is willing to support a non-US-based Arctic mining project at this crucial pre-construction stage in its development. 

In the mining world, companies often lament an 鈥渙rphan period鈥� after the excitement of discovery of a new resource has faded and the long work of economic studies, permitting, financing, and ultimately construction remains. A disproportionate number of Arctic mining projects languish indefinitely in the orphan period, held by small junior companies with little hope of building the mines on their own. The biggest reason for this, as Mactung itself shows, is the lack of regional infrastructure. The deposit was discovered sixty-two years ago and is arguably the best undeveloped tungsten project on earth today 鈥� yet its location has ensured that it has remained unmined. The last project owner before Fireweed went bankrupt in 2014.

The Mactung funding grants are important because they address some of Fireweed鈥檚 actual biggest current needs 鈥� funding in this pre-construction phase of advancing economic and engineering studies and permitting. On the  government side, the funding will also specifically target crucial infrastructure, 鈥渋mprovements of approximately 250 kilometers of road, upgrades to an existing transmission line between Faro and Ross River, and the construction of a new transmission line from Ross River鈥� to the project site.

This approach to funding Mactung is distinct from many previous government efforts to help Arctic projects advance. The US EXIM Bank, for instance,  a Letter of Interest for a loan for the construction of the Citronen Fjord zinc project in northeast Greenland relatively early in its diligence process, but then conducted further diligence over multiple years without actually providing any project funding. (After more than two years, EXIM ultimately withdrew its LOI for Citronen Fjord at the project owner鈥檚 request, largely because of unfavorable movements in both interest rates and zinc prices.) The EXIM approach of only offering funding at the time of a construction decision, in the author鈥檚 view, does not work well for many Arctic projects, because it neglects to fund projects during their long pre-construction orphan period when companies are most likely to fail. EXIM and the government of Greenland also assumed in the case of Citronen Fjord that the company would bear 100% of the costs of constructing a port and other transport infrastructure, something that most would-be Arctic miners would struggle with.

There is a passing reference to 鈥渆ngagement and consultations with First Nations鈥� in the Canadian funding decision, which is critical and deserving of further emphasis. Mactung sits on the traditional lands of two First Nations groups as well as the Sahtu Settlement Area (on the NWT side of the border). In a  to CBC, the Na-Cho Ny盲k Dun expressed concerns with potential pollution and water consumption from the mine as well as 鈥渕oral opposition鈥� and 鈥渆thical questions鈥� regarding tungsten鈥檚 applications in munitions. Thus far, Fireweed has received all required permits, and the Yukon Environmental and Socio-Economic Board had of the Mactung mine (after more than five years of review) when Mactung鈥檚 previous owner applied. But years of further permitting and negotiation of an Impact Benefit Agreement lie ahead for Fireweed, and a at a gold project in the Yukon that released as much as 300,000 cubic meters of cyanide solution has brought the environmental dangers of mining disasters to the forefront in the territory. The Na-Cho Ny盲k Dun are for a federal audit of the disaster, as well as an investigation of 鈥渂roader issues surrounding mineral management in the territory.鈥� Bi-national support for the mine will mean little if the First Nations groups that host it are not active and supportive participants and stakeholders. 

DOD鈥檚 grant decision for Mactung has the hallmarks of a successful US approach with respect to financing critical minerals projects in the Arctic. It has 鈥渃rowded in鈥� additional host government investment; it is supporting a project that is undeniably relevant to US national security interests; it is made at the lifecycle stage at which the mining company is most in need of non-dilutive funding to continue advancing the project, and where every dollar counts most (and thus the grant can be small in terms of absolute dollars). Meanwhile, the Canadian grant recognizes the two paramount realities of Arctic economic activity. One is that even world-class projects may be uncompetitive without initial direct government support for project infrastructure. The second is that buy-in from Indigenous Arctic communities, as the subsequent infrastructure funding plan calls for, is essential. This latter principle in particular will be tested in the coming years; Fireweed will have to conduct detailed environmental and other studies to mitigate any concerns that the Na-Cho Ny盲k Dun and other First Nations groups have. The joint grants are an important step to help advance these.