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Earlier this week, the Biden Administration unveiled a road map for reducing the transportation sector’s carbon emissions to net-zero by 2050.

Two weeks into the new year, the green energy transition continues to gain steam.  However, as Morgan D. Bazilian of the Colorado School of Mines and Gregory Brew from the Jackson School of Global Affairs at Yale University argue in a new piece for Foreign Affairs, while this general trend represents

“welcome and overdue progress, (…) implementing plans to reduce greenhouse gas emissions could be stymied in part by a material obstacle: the procurement of critical minerals such as lithium, cobalt, nickel, and copper that are essential to clean energy systems.” 

As followers of ARPN well know, 2022 saw several important developments to boost domestic critical mineral supply chains.  (See our Year in Review post here.). And we can’t resist noting that copper – rightly referenced by Bazilian and Brew as an essential material for clean energy applications – is not officially a Critical Mineral, despite ARPN’s consistent case for copper’s criticality.

In any case, with demand outpacing supply for many of the metals and minerals underpinning the pursuit of net zero carbon emissions, Bazilian and Brewer lament that “[t]he way the United States seems intent on obtaining these minerals (…) is myopic.”

They argue that “[t]o win the energy battle of the twenty-first century, the United States must avoid repeating the policy mistakes of past eras and focus on increasing domestic production and advanced manufacturing at home, while establishing secure and resilient supply chains with allies—and even foes—abroad.”

As Bazilian and Brewer outline, the level of supply production needed to implement plans to reduce emissions “does not yet exist. New mines will have to be dug, and processing and refining industrial complexes will need to be built—both exceedingly difficult to do with existing permitting rules. The existing facilities, moreover, are almost entirely outside the United States. The production of critical minerals is concentrated in a handful of countries. 

Against the backdrop of heightened geopolitical competition, they say, “Washington should avoid the counterproductive strategies of the oil era and adopt a varied approach combining domestic policy options with a flexible foreign policy. The goal should be to build a secure position for itself and its allies, reduce dependence on Chinese supplies, and recognize the competitive environment without resorting to brute force or nationalistic tendencies.”

Specifically, they suggest the United States should:

• accelerate the development of its domestic critical mineral resources and streamline the mining permitting process to further expand mining capacity;
• work with allies to develop supply chains for critical minerals;
• and work with allies to regulate critical mineral markets to reduce volatility to encourage investment and prevent disruptions due to price spikes.

To be sure, progress has been made on several fronts. As ARPN outlined in our 2022 recap, President Biden invoked the Defense Production Act to spur domestic resource development and Congress passed the Inflation Reduction Act in August, both of which have sent strong signals to investors and industry that the United States is serious about confronting the critical minerals supply chain challenge head-on.

At the same time, as scholars at the Wilson Center’s Environmental Change and Security Center have pointed out, “the Biden administration’s efforts to free up federal funds for domestic mining activities has highlighted the inherent conflict between accessing the minerals needed for climate action and the administration’s commitment to environmental and social justice.”

Developments like the recent Biden administration halt on progress on the Ambler Road project in Alaska, which proponents say would unlock access to critical minerals and create new jobs, point to conflicting viewpoints between the President’s stated objectives and his Administration’s policy.

Alaska Governor Mike Dunleavy lamented the Administration’s Ambler Mining District decision during a 2022 critical minerals summit held in Fairbanks, which we covered here:

“This administration must speak with one voice. It wants critical minerals, or it doesn’t. It wants the lower energy prices, or it doesn’t.  It wants to create jobs in the U.S. or it doesn’t.  It wants to protect the environment or it doesn’t. It cares about human rights, or it doesn’t. (…) The disjointed federal permitting process doesn’t just hurt Alaskans (…), it hurts every industry, and every state. (…) 

If we set ambitious goals for EVs or renewables without permitting the production of critical minerals here, those minerals will still be produced, they just won’t be produced in here in America or Alaska, they’ll be produced by child labor, potentially, they’ll be produced without environmental standards, potentially, they’ll be produced at the expense of the American worker, to the benefit, potentially, of our adversaries.”  

The stakes are high, and the Wilson Center Environmental Change and Security Program believes that “Critical Minerals and Energy Security” will be one of the top three issues in the coming months as 2023 promises to be a “pivotal moment for U.S. foreign and domestic policy on critical minerals.”

We are here for it, and ARPN will be documenting and analyzing the developments and decisions that will “determine national fortunes and human progress in decades ahead.”

As the global push towards net zero carbon emissions accelerates, the understanding that critical minerals hold the key to achieving climate goals has grown.   With EV battery technology at the heart of the green energy transition, the “Battery Criticals” (lithium, cobalt, nickel, graphite and manganese) have entered the spotlight.   While initially the main focus was on the cathode materials lithium, cobalt and nickel, the realization that graphite might be equally, if not more critical has set in — for good reason.

As the key raw material in the battery anode, graphite is the largest component of lithium-ion batteries by weight. In light of “phenomenal demand growth from the EV battery sector and delays to new capacity as well as rising power costs,” the graphite supply chain represents a significant and growing challenge for automakers looking to reduce the carbon footprint of the materials they use for their EVs.

As Fastmarkets consultant Amy Bennett outlines, unlike natural graphite, which is mined and then processed for usage in the battery industry, synthetic graphite utilizes a carbon precursor product – i.e. petroleum coke, needle coke or coal tar pitch – which is then made into graphite via a process called graphitization.

Most graphite production currently takes place in China. A majority of batteries to date use a blend of natural and synthetic graphite, but there may be compelling reasons for a shift towards natural graphite as long as supply chain security can be established.

Arguing that both supply chains have “multiple environmental, social and governance (ESG) concerns, with natural graphite subject to the risks of an ongoing conflict in northern Mozambique that started in 2017,” our friends at Benchmark Mineral Intelligence have taken a closer look how both graphite materials compare, and find that “[t]the production of natural graphite anodes is around 55% less carbon intensive than the average synthetic graphite anode produced in China.”

They add:

“For natural graphite, two-thirds of the carbon emissions come from the spheroidisation process, for which China currently has a monopoly. Spheroidisation is the process in which flake graphite particles are mechanically rounded. This leads to the loss of some material, but yields improvements in the performance of the anode.”

However, while the production of natural graphite is associated with fewer carbon emissions, Benchmark sees its global supply chain remaining fragile, particularly as Mozambique, a major source of natural graphite outside of China, experiences an  ISIS-affiliated terror threat in its northern Cabo Delgado province, from where much of the country’s graphite is sourced.

Looking towards Europe, where almost 70% of natural graphite has been mined in Russia and Ukraine, Moscow’s ongoing war on Ukraine could seriously destabilize the region’s graphite production.

Meanwhile mining in Madagascar, which currently accounts for roughly 10% of global supply is threatened by severe climate events in the form of cyclones.  Finally, there is some phantom natural graphite produced in North Korea, and likely moved into the global supply chain via China – no one’s idea of a socially-responsible source of battery material.

Currently, according to the USGS, the United States is 100% import dependent for its graphite needs, but as ARPN recently pointed out,

“that’s not for lack of known graphite resources.  As USGS noted in February 2022 in its updated U.S. Mineral Deposit Database, Graphite One’s Graphite Creek deposit near Nome, Alaska is America’s largest graphite deposit.  If U.S. Government efforts to develop an American-based EV and lithium-ion battery supply chain have any hope of succeeding, looking for ways to help projects like Graphite Creek down the path to production will be, in a word…. Critical.”

Until then, China’s battery anode dominance could be the West’s Achilles heel in the green energy transition – in defense planners parlance, a potential “single point of failure”:  irrespective of whether we succeed in developing multiple minerals and metals for the battery cathode, if we are unable to meet anode material needs – and we cannot do so sustainably and ESG-friendly without natural graphite — we will not be able to build a rechargeable battery independent of China.

As ARPN outlined:

“The sourcing provisions in the energy passages of the recently passed Inflation Reduction Act, coupled with the recently announced grants to ‘supercharge’ U.S. EV battery and electric grid supply chains are important steps towards mitigating that potential single point of failure.  However, considering the long timelines for permitting for mining and processing projects, decoupling and building out a battery supply chain independent of China will warrant a concerted effort by stakeholders and policy makers to decouple from China.”

Pressures on already strained battery material supply chains are mounting, and not just due to geopolitical tensions and rising demand in the context of the green energy transition. The U.S. Department of Labor has included lithium-ion batteries into its “List of Goods Produced by Child Labor or Forced Labor” – a list of 158 goods from 77 [...]

In yet another indication that increasing demand and supply chain challenges in the wake of the coronavirus pandemic and war in Ukraine have raised the geopolitical stakes, U.S. Secretary of State Anthony Blinken explicitly referenced critical minerals and the United over-reliance on China both in terms of mining and processing in a speech outlining U.S. policy [...]

Against the backdrop of the accelerating global push towards net zero carbon emissions, the authors of a May 2021 KPMG study on “geographical and geopolitical constraints to the supply of resources critical to the energy transition” and the associated “call for a circular economy solution” titled the first chapter of their report “From OPEC to ‘OMEC’: the new global energy ecosystem.” In a [...]

Pandemic induced supply chain shocks, increasing resource nationalism in various parts of the world, and Russia’s invasion of Ukraine exactly one month ago have brought the stakes for securing critical mineral resource supply chains to a whole new level. The emerging geopolitical landscape has sent countries scrambling to devise strategies to not only ensure steady [...]

As followers of ARPN well know, pressures on global supply chains in the wake of a global pandemic, trade tensions and the rise of resource nationalism in Central and South America were at an all-time high even before Russian President Vladimir Putin’s decision to launch a full-scale invasion of Ukraine on February 24, 2022.  The move, [...]

Against the backdrop of the global push to net carbon zero, supply chains for the critical metals and minerals underpinning this shift are facing immense pressures. As followers of ARPN well know, China, which not only holds the pole position when it comes to sourcing critical minerals, but has also cornered the downstream supply chain, [...]

In the wake of several eye-openers regarding our nation’s critical mineral supply chain woes — the coronavirus pandemic, increasing trade tensions with adversary nations like China, and reports underscoring the mineral intensity of our green energy future — the bipartisan infrastructure package passed by the U.S. Senate before the August recess contained a series of [...]

Last week, the Biden Administration released the findings of its 100-day supply chain review initiated by Executive Order 14017 – “America’s Supply Chains.” From a Critical Minerals perspective, there is a lot to unpack in the 250-page report, and we’ll be digging into the various chapters and issues over the next few days and weeks. [...]