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When China announced new export controls on rare earths and lithium iron phosphate (LFP) cathode materials this month, the news sent shockwaves through the global clean energy and defense sectors. Set to take effect November 8, the restrictions mark the latest escalation in the competition over critical minerals.

LFP batteries, used in AI and data centers, grid storage, robotics, military systems, and electric vehicles, account for more than two-thirds of global battery output. With nearly all LFP cathode materials still made in China, Western nations now face a glaring supply chain vulnerability.

That realization has sparked a race to bring the full LFP production chain which includes mining, refining, and cathode manufacturing onshore across North America.

Strategic Timing in a Shifting Geopolitical Landscape

China's Ministry of Commerce announced the new controls on October 9, targeting the very materials First Phosphate Corp. (CSE: PHOS) (OTCQX: $FRSPF ) specializes in. The move sent shares of several critical mineral producers surging, with First Phosphate seeing a sharp rise in trading volume as investors recognized its rare positioning as a North American LFP materials supplier.

First Phosphate's independence is reinforced by its focus on European and North American customers. Long-term offtake agreements with European partners insulate the company from U.S. tariffs, while its planned phosphoric acid plant at the Port of Saguenay will provide deepwater access to Europe—ensuring efficient logistics and diversification beyond the U.S. market.

First Phosphate Solves the Situation with Vertically Integrated Approach

First Phosphate Corp. is a Saguenay, Quebec–based developer positioning itself at the heart of North America's emerging LFP ecosystem. The company's mission is simple but bold: build a fully integrated, mine-to-market LFP battery materials supply chain independent of China. It has been doing so quietly for the past three years.

The company recently produced what may be the first commercial-grade LFP 18650 battery cells made entirely from North American–sourced critical minerals. The cells met all manufacturing specifications and demonstrated stable performance through more than 2,000 discharge cycles. The phosphoric acid and iron powder for these cells came directly from First Phosphate's Quebec deposit, processed in partnership with Prayon Technologies in Belgium and GKN Hoeganaes in Tennessee.

A Broader Industry Response

First Phosphate's integrated model mirrors a broader trend among leading materials companies seeking to capitalize on supply chain shifts.

Standard Lithium Ltd. (NYSE: $SLI ) (TSX-Venture: SLL) illustrates the North American critical minerals development model. The company is advancing a lithium extraction project in Arkansas using direct lithium extraction (DLE) technology applied to existing brine resources. In May 2024, Equinor entered a strategic partnership with Standard Lithium acquiring a 45% share in two lithium companies in Southwest Arkansas (SWA) and East Texas. A US$225 million funding from the DOE's Office of Manufacturing and Energy Supply Chains is being used to support construction of a processing facility for the SWA project, which in Phase 1 is targeting an annual production of 22,500 tonnes of lithium carbonate for use in battery production.

PMET Resources (TSX: PMET) (OTC: $PMETF ) (recently changed its name from Patriot Battery Metals), is a hard-rock lithium exploration company that offers a Canadian critical minerals comparable, advancing its district scale Shaakichiuwaanaan Property (formerly known as Corvette) located in the Eeyou Istchee James Bay region of Québec, Canada. The project hosts the world's largest pollucite-hosted caesium pegmatite Mineral Resource at the Rigel and Vega zones with 0.69 Mt at 4.40% Cs2O, Indicated, and 1.70 Mt at 2.40% Cs2O, Inferred. Additionally, the project hosts a Consolidated Mineral Resource, which includes the Rigel and Vega caesium zones, totaling 108.0 Mt at 1.40% Li2O, 0.11% Cs2O, 166 ppm Ta2O5, and 66 ppm Ga, Indicated, and 33.4 Mt at 1.33% Li2O, 0.21% Cs2O, 155 ppm Ta2O5, and 65 ppm Ga, Inferred, and ranks as the largest lithium pegmatite resource in the Americas, and in the top ten globally.

MP Materials (NYSE: $MP ), a Wall Street darling in 2025, is taking a parallel approach within the rare earths sector. The company, which operates the Mountain Pass mine in California, has restored U.S. rare earth battery production. Earlier this year, the company's flagship Independence facility in Fort Worth, Texas, commenced commercial production of neodymium-praseodymium (NdPr) metal and trial production of automotive-grade, sintered neodymium-iron-boron (NdFeB) magnets. These achievements bring the U.S. closer to reestablishing a fully integrated, domestic supply chain for these critical components for the first time in decades.

Together, these companies underscore a global trend: the convergence of resource extraction, materials science, and policy alignment to build secure, domestic battery ecosystems.

The Rising Strategic Value of Phosphate

While lithium and nickel have dominated headlines, high purity phosphate is fast emerging as the "new gold" of the battery industry. High purity phosphate forms the backbone of LFP chemistry, offering improved safety, cost-efficiency, and longevity compared with nickel-based alternatives. In an environment where national defense, energy resilience, and supply chain sovereignty are priorities, high purity phosphate is becoming indispensable.

That realization is already influencing capital flows and government policy. In the United States, the Department of Defense's Defense Industrial Base Consortium recently underscored that "phosphate, particularly for use in LFP cathode active materials, is essential to national defense." Ottawa and Quebec City have echoed the same urgency, identifying phosphate as a pillar of Canada's critical minerals strategy.

At its flagship Bégin-Lamarche property in Quebec, First Phosphate has delineated one of the world's purest igneous phosphate deposits, with a concentrate grading 40.9% P₂O₅ after beneficiation. Unlike sedimentary deposits used in fertilizer production, igneous phosphate contains minimal impurities, making it ideal for battery applications. The project's economics are compelling, an after-tax net present value of US$1.59 billion and an internal rate of return of 33%, with payback estimated at under three years.

Government Backing and Local Support

First Phosphate's position is strengthened by strong political and community backing. Federal and provincial leaders, including Canada's Minister of Energy and Natural Resources, have publicly visited the project, emphasizing its role in national energy security. The company has also secured cooperation agreements with local municipalities and the Pekuakamiulnuatsh First Nation, ensuring social license and alignment with environmental standards.

According to a report from Radio-Canada, development of the phosphate industry in Saguenay–Lac-Saint-Jean could create 1,000 direct and 10,000 indirect jobs, transforming the region into a key hub for the clean energy transition. With dry-stack tailings and solventless processing, First Phosphate's operations are also designed for minimal environmental impact, a growing priority for both regulators and investors.

The Investment Case

First Phosphate's story encapsulates a unique intersection of geopolitics, technology, and sustainability. Its vertically integrated model aligns with North America's urgent drive to establish independent supply chains for critical minerals. With China tightening its grip on exports and Western governments prioritizing local sourcing, companies like First Phosphate occupy increasingly strategic ground.

The Defense Industrial Base Consortium's recent "Met" rating of the company's white paper signals validation from U.S. defense circles that phosphate-based LFP materials are now considered essential to national security. That recognition could open the door to future Defense Production Act funding or other forms of government support.

For investors, the opportunity lies in scale and timing. First Phosphate is still in the early stages of development, trading at a fraction of its preliminary economic assessment value, but its offtake agreements, political support, and proven processing capability set it apart. As LFP battery adoption expands across energy storage, EVs, and AI infrastructure, the market for North American-sourced materials is poised to grow rapidly.

A Final Word

Phosphate has long been overlooked as a commodity relegated to fertilizers. Today, it is emerging as a cornerstone of the clean energy economy, and potentially, of North America's strategic independence. With its fully integrated approach, government-backed infrastructure, and first-to-market progress in LFP battery materials, First Phosphate Corp. stands at the forefront of a rapidly evolving industrial shift.

As global supply chains fracture and Western nations move to rebuild domestic capacity, the race is on to secure the minerals that will power the next generation of electrification. In that race, phosphate, and the companies developing it at home, may prove as valuable to the future as oil once was to the past.

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