Special Report

America is Near-Totally Import Dependent on Nickel and Cobalt From Chinese-Controlled Supply Chains. First Atlantic's Breakthrough Alloy Discovery Could Change That.

Awaruite — a rare magnetic nickel-cobalt alloy — Awaruite — A Rare Magnetic Alloy: 77% pure nickel alloy with iron and cobalt. Natural magnetic properties enable domestic processing, bypassing reliance on overseas smelting.

First Atlantic Nickel Corp. TSX-V: FAN | OTCQB: FANCF

As North America races to onshore critical mineral supply, First Atlantic's rare awaruite (Ni₃Fe) discovery is positioned to deliver a large-scale, smelter-free source of nickel and cobalt.

Key Takeaways

First Atlantic has made the first major drilled awaruite discovery since the USGS identified awaruite as a solution to nickel shortages in 2012 — it doesn't require smelting and is easier to concentrate and process.
The last major nickel-cobalt discovery in Newfoundland, Voisey's Bay, was acquired for $4.3 billion at $41 a share after shares surged 20-fold.
According to the Department of Defense, America's only nickel mine could close as early as this year. Without it, the U.S. would be entirely dependent on imported nickel it cannot process. There are zero nickel smelters in America.
In January 2025, the White House declared the lack of domestic processing capacity for nickel, cobalt, and rare earth elements a national and economic security risk.
The IEA predicts 60 new nickel mines and 17 new cobalt mines will be needed by 2030.³ The IMF projects prices could rise several hundred percent.
By 2035, the U.S. faces a projected 9,275% nickel import dependence — the highest of any critical mineral, according to the Carnegie Endowment for International Peace.

First Atlantic Nickel (OTC: FANCF | TSX-V: FAN) has drilled the first major awaruite discovery since the United States Geological Service (USGS) identified it as a solution to nickel shortages in 2012.

The Pipestone XL discovery of awaruite (Ni₃Fe), Earth's rarest naturally magnetic nickel-cobalt alloy, is the largest nickel, cobalt, and chromium discovery in the Atlantic in 30 years, since Voisey's Bay, which was acquired for $4.3 billion in 1996¹ (more than $8 billion adjusted for inflation).

Awaruite is a natural alloy of approximately 77% pure nickel with cobalt and iron, and can be processed using magnetic separation with no smelter required — bypassing the North American smelter bottleneck and enabling a fully onshore supply chain feeding directly into U.S. battery refineries, stainless steel, and defense manufacturing.

Nickel prices have risen 35% from their 2024 lows into early 2026 after Indonesia cut mining quotas by an estimated 11%, according to Goldman Sachs.² Cobalt prices have surged 170% from their 2024 lows after the DRC imposed export bans and quota restrictions. The market is already moving, and the IMF's long-term outlook is even more significant:

"The IMF projects that real prices of nickel, cobalt and lithium would rise several hundred percent from 2020 levels... total accumulated production value from 2021–2040 reaching $4.1 trillion for nickel, $1.6 trillion for cobalt — across all four critical energy transition metals, over $13 trillion, rivaling the total value of crude oil production."⁴

— International Monetary Fund

As Washington pushes to onshore critical mineral supply chains and reduce dependence on Chinese-controlled processing, First Atlantic Nickel's Pipestone XL awaruite discovery represents one of the most strategically positioned opportunities in North America: a smelter-free source of nickel and cobalt that can feed directly into U.S. manufacturing without touching Chinese processing infrastructure.

"Even where the United States has domestic mining capacity, such as for cobalt, nickel, and rare earth elements, the United States lacks the domestic processing capacity to avoid downstream net-import reliance."⁵

— White House, January 14, 2026

The Problem

The U.S. Has No Nickel Smelters and Its Only Mine Could Stop Producing This Year

North American smelter bottleneck — nickel supply crisis

The United States holds less than 1% of global nickel reserves.⁶ By 2035, nickel import reliance is projected to hit 9,275% — the highest of any critical mineral, according to the Carnegie Endowment for International Peace.⁷

9,275%

Projected U.S. nickel import reliance by 2035

Nickel smelters operating in the United States

65–90%

Of global processing controlled by China

China produces just 10% of the world's nickel, cobalt, copper, and lithium but controls 65–90% of global processing.⁸ Much of that control is financed directly by the Chinese government, creating a dangerous reliance that the U.S. has yet to deal with.

Indonesia mines more than 60% of the global nickel supply. After it banned raw ore exports in 2020, Chinese state-backed companies invested an estimated $65 billion to gain near-total control of Indonesian processing. Indonesia's own parliament confirmed that China now controls 90% of the country's nickel industry⁹.

"There is no adequate alternative supply of nickel produced outside of China or by non-Chinese companies."

— Center for Strategic and International Studies, 2025

Carnegie Endowment — U.S. Critical Mineral Import Dependence by 2035

Domestic Mineral Extraction and U.S. Demand — Carnegie Endowment for International Peace — Source: Carnegie Endowment for International Peace — Domestic Mineral Extraction vs. U.S. Demand. Nickel and cobalt (starred) have near-zero domestic supply against projected demand.

According to the U.S. Army War College, the DRC produces 80% of the world's cobalt, Chinese state-owned enterprises control 80% of total output, and their refineries account for as much as 90% of global cobalt supply.¹⁰

In 2012, Hong Kong Exchanges purchased the London Metal Exchange,¹¹ giving Beijing indirect control over global nickel and cobalt pricing. A year later, China launched its Belt and Road Initiative, systematically securing critical mineral mining and refining across Asia, Africa, and South America. From consumer electronics to EV batteries to defense systems, the U.S. depends on a supply chain it doesn't control — and China is more than a decade ahead.

North America's Smelter Bottleneck: High Costs, Regulation, and a Shrinking Supply Chain

The U.S. Department of Defense has called nickel "an essential component of high-temperature alloys used in aerospace, as well as stainless steel and lithium-ion batteries." Yet Twin Metals in Minnesota, which holds approximately 95% of U.S. nickel reserves and 88% of U.S. cobalt reserves, remains blocked by a 20-year federal mining ban.¹² The U.S. has not mined chromium since 1962.¹³

Even if the U.S. could mine more nickel, there is nowhere to process it. Building a new nickel smelter could cost billions and require billions more in electrical capacity to power it, while facing lengthy permitting, EPA regulations over toxic SO₂ emissions and acid mine drainage, and fierce community opposition.

North America lost one of its three nickel smelters in 2018.¹⁴ The two remaining are in Canada,¹⁵ both near capacity and under pressure from stricter environmental regulations and rising electricity costs. No new nickel smelters have been built in North America in decades.

"Nickel continues to grow in importance as a strategic resource... the United States either will have to find new nickel to mine or import all nickel for production, which may have economic and security implications."¹⁶

— U.S. Federal Reserve Bank, December 2025

The Solution

First Atlantic's Breakthrough Awaruite Discovery — A Rare High-Grade Natural Nickel-Cobalt Alloy That Doesn't Need Smelting

First Atlantic Nickel geologists at Pipestone XL

"The development of awaruite deposits in other parts of Canada may help alleviate any prolonged shortage of nickel concentrate. Awaruite, a natural iron-nickel alloy, is much easier to concentrate than pentlandite, the principal sulfide of nickel."¹⁷

— U.S. Geological Survey (USGS), 2012

Awaruite is a rare magnetic alloy and one of the highest-grade nickel-cobalt minerals on Earth — approximately 77% pure nickel with 21% iron and 1% cobalt, with no chemical impurities.¹⁸ Because it's naturally magnetic, it can be concentrated using magnetic separator drums — the same proven technology used in Minnesota's Mesabi Iron Range and Labrador's iron mines for over a century.

This produces a concentrate of up to 60% nickel and ~1% cobalt¹⁹ that can go directly to U.S. battery refineries and stainless steel mills — no smelter required, no overseas processing, and fully compliant with the U.S. 45X Advanced Manufacturing Tax Credit.

Common nickel sulfide ores require smelting that emits toxic SO₂, uses massive amounts of electricity, and risks creating acid mine drainage — nearly impossible to permit or profit from in Western jurisdictions. Laterite ores require high-pressure acid leaching with massive chemical inputs, producing significant volumes of sulfuric acid waste. Awaruite has none of these problems:

Awaruite is a high-grade natural nickel-cobalt alloy at ~77% pure nickel, recoverable using simple magnetic separation.
Awaruite is sulfur-free — rock is inert with no risk of acid mine drainage.
Awaruite doesn't require smelting, saving $2–3 billion in capital costs and dramatically reducing electricity demand.
Awaruite means easier, faster permitting due to a safer and lower environmental footprint.
Nickel sulfide concentrates typically reach less than 15% purity before smelting — more than four times lower than awaruite's 60% concentration, making shipping and processing costs significantly higher per ton.

	Awaruite (Ni₃Fe)	Sulfide & Laterite Nickel
Nickel Grade	~77% pure nickel — natural alloy	~25% sulfide; 1–2% laterite
Nickel Concentrate Grade	~60% Nickel, 1% Cobalt.	1–15% Nickel
Mine Site Processing	Simple magnetic separation, flotation	Flotation, Smelting, roasting, or high-pressure acid leaching
Secondary Processing — Smelting, HPAL Roasting	Not Required (Awaruite is Pure Metal Alloy). Direct Concentrate shipped.	Required for Sulfide & Laterite Nickel. Additional capital and energy costs required after mining.
Electricity Demand	Low	High (Processing — Smelting, Roasting, HPAL)
Pollution & Acidic Mine Waste	None	SO₂, acid mine drainage, sulfuric acid waste
Tailings	Sulfur-free and inert	Toxic
Permitting	Faster — safer environmental footprint	Difficult — toxic waste and tailings

Pipestone XL — First Major Drilled Awaruite Discovery Since USGS Identified it as a Solution to Nickel Shortages in 2012

Large Grain Awaruite from Pipestone XL — Large Grain Awaruite from First Atlantic Nickel's (OTC:FANCF TSXV:FAN) Pipestone XL Nickel Alloy Project

The Pipestone XL Nickel-Cobalt Alloy Project is a 30-kilometer geological system in Newfoundland — a 489-million-year-old ophiolite of ancient ocean crust and mantle thrust onto land along the Appalachian Orogen. The entire 30km belt is enriched in nickel, cobalt, and chromium through serpentinization, a natural process that releases nickel from the rocks to create a nickel-cobalt alloy.

Three discovery zones have been confirmed — RPM Zone, Super Gulp Zone, and Atlantic Lake — where drilling has confirmed awaruite: a magnetically recoverable nickel-cobalt alloy mineralization associated with chromite.

2024: 5 holes drilled with a 100% success rate.

2025: 9 additional holes expanded the RPM Zone to 1.2km strike length and 800m width, with intercepts up to 447 meters.

RPM Zone magnetic concentrates up to 2.35% nickel and 8.17% chromium confirmed.

2026: Discovery of new, larger 4km Alloy Max Zone, located 7km north of the RPM Zone.

Additional metallurgical results and drilling are planned for 2026. First Atlantic owns 100% of this district-scale discovery. The last major nickel-cobalt discovery in Newfoundland, Voisey's Bay, saw shares surge 20-fold before its $4.3 billion acquisition at $41 a share.²⁰ In 2022, Tesla signed a supply deal with Vale for nickel from Voisey's Bay to supply its North American gigafactories.²¹

The Pipestone XL project is positioned at the intersection of four converging forces: national security, battery demand, smelter-free processing, and a jurisdiction that qualifies as a domestic source under the U.S. Defense Production Act.

Geologic Hydrogen, Chromium & Carbon Capture Potential

First Atlantic's Ophiolite-X acquisition in the Bay of Islands complex targets geologic hydrogen, carbon capture, and additional critical minerals. Natural springs discharge hydrogen from active serpentinization at costs estimated below the U.S. DOE's $1/kg target, and Memorial University calculates CO₂ storage capacity equivalent to more than 13 years of global emissions. NASA studies the Tablelands massif as a Mars analogue.

Chromium recovery addresses a separate but equally urgent gap: the U.S. has not mined chromium since 1962 and imports 83% of its supply.

Newfoundland — A Strategic Source for Critical Minerals

"Two Canadian provinces, Saskatchewan and Newfoundland & Labrador, appear in the list of top ten most attractive jurisdictions for mining investment."²²

— Fraser Institute Annual Survey, 2025 (350 participants, 82 jurisdictions)

Newfoundland is a Canadian province located between the United States and Greenland in the Atlantic, and is considered a "domestic source" under Title III of the U.S. Defense Production Act. Of the 46 minerals identified as critical by the U.S., EU, Japan, Australia, UK, and South Korea, Newfoundland and Labrador hosts 31.

The province consistently ranks among the top 10 global mining jurisdictions for geological potential, competitive regulatory environment, and long-term political stability. Hydro rates are among the cheapest in North America. Deep-sea port access enables direct Atlantic shipping to U.S. and European manufacturers. Newfoundland projects are among the fastest to be permitted on the continent.

There are no First Nations land rights issues that have stalled comparable projects elsewhere in Canada. FPX Nickel's Baptiste Project in British Columbia — the only other company to have identified awaruite as a primary resource — has been delayed due to permitting, First Nations opposition and location challenges.

Demand Set to Skyrocket — With China as the World's Gatekeeper

The supply squeeze is already underway. Since September 2025, Indonesia has cut nickel mining quotas more than 30% and piled on new taxes, royalties, and export controls — driving nickel up 35% to $19,138/t — with further policy-driven supply cuts expected in 2026. The DRC has done the same to cobalt, sending prices up 65% to $55,858/t.

These are early signals in a market the IMF projects will grow dramatically through 2040: real prices of nickel, cobalt, and lithium could rise several hundred percent from 2020 levels, with accumulated nickel production value of $4.1 trillion through 2040.²³

The IEA predicts 60 new nickel mines and 17 new cobalt mines will be required by 2030.²⁴ Nickel consumption is projected to increase up to 4x by 2040. Tesla CEO Elon Musk has stated the company is moving at "top speed" to reach 1,000 GWh per year of battery production in the U.S. alone, requiring an estimated 750,000 tons of nickel per year — the equivalent of roughly 18 average-size nickel mines. More than 300 gigafactory-type developments are completed, underway, or planned globally.

U.S. Department of Energy Critical Mineral Criticality Matrix

Washington's race to onshore critical minerals is no longer a talking point. The White House has declared it a national emergency. The Federal Reserve has warned of the economic consequences of nickel import dependence. When the DoD took a major equity stake in MP Materials, Apple invested $500 million and General Motors followed. Nickel and cobalt are next.

First Atlantic Nickel represents that same category of opportunity — a smelter-free, North American source that feeds directly into U.S. manufacturing without touching Chinese processing infrastructure.