The U.S. Department of Commerce conducted an invite-only virtual meeting with mining companies and electric vehicle battery manufactures to explore ways to expand into Canada to boost regional production of minerals used to make electric vehicles and counter Chinese competitors, according to a report from Reuters.

A source who attended meeting told Reuters that there was no indication that the Commerce Department would offer financial incentives for new mines or other supply chain components in Canada.

But department officials did stress the need to act now to build a U.S.-Canada EV supply chain, much like Europe has been doing and Asia has already done, according to a second source who attended the meeting.

The move comes as demand for electrified transportation is set to surge over the next decade.

Tesla Inc, Talon Metals Corp and Livent Corp were among the more-than 30 attendees at meeting who discussed ways Washington can help U.S. companies expand in Canada and overcome logistical challenges, according to the documents.

The event comes after U.S. President Joe Biden and Canadian Prime Minister Justin Trudeau committed last month to building an EV supply chain between the two countries.

Since Biden’s election, three U.S. mining companies have invested in Canada, where mining accounts for 5 percent of the country’s gross domestic product, versus roughly 0.9 percent in the United States.

Canada’s Fortune Minerals Ltd, which is developing a cobalt mine in the Northwest Territories, has also held funding talks with the U.S. Export/Import Bank, its chief executive told Reuters.

“The United States is really taking this seriously,” CEO Robin Goad said.

Lithium-ion batteries are dangerous to transport over long distances, so automakers prefer to have them built near assembly plants. That should aid efforts by Ontario and Quebec to develop their own battery cell plants with both provinces close to U.S. automakers in Michigan and Ohio, industry executives said.

To be sure, the United States is also trying to boost domestic production of EV metals, which the Biden administration has said is critical.
But Washington is increasingly viewing Canada as a kind of “51st State” for mineral supply purposes and plans to deepen financial and logistical partnerships with the country’s mining sector over time, according to a U.S. government source.

Both countries are members of the Energy Resource Governance Initiative, a pact to share mining experience and resources.

Canadian firms are also able to apply for U.S. government grants under the U.S. Defense Production Act and other U.S. funding programs. There are no U.S. tariffs on Canadian EV battery metals or EV parts.

Canada’s First Cobalt Corp is building the continent’s only cobalt refinery, part of an effort to wean the EV industry off supplies from the Democratic Republic of Congo. Cobalt is used to make battery cathodes.