Canada

Along with U.S. Sen. Lisa Murkowski (R-AK), U.S. Sen. Joe Manchin (D-WV) has long one of the lead champions of a more comprehensive approach to mineral resource security.

On the heels of lamenting the delayed implementation of a set of critical mineral provisions included in the Energy Act of 2020 and the bipartisan infrastructure package passed in 2021 in letters to the Administration, Sen. Manchin called for strengthening the U.S-Canadian energy and critical mineral partnership “to ensure [the] free world’s energy security and address climate change” during a full Senate Energy and Natural Resources Committee hearing.

In his speech, Sen. Manchin underscores that the goals of pursuing energy security and addressing climate change “aren’t mutually exclusive, and it’s imperative that we address both.”

Citing the weaponization of Russia’s oil and gas resources by Russian President Vladimir Putin in the context of the Russian Federation’s invasion of Ukraine as well as China’s penchant for playing politics with its de facto control over global critical mineral supply chains, Sen. Manchin calls for exploring ways in which the United States and Canada “can create an integrated network for raw minerals to move across our borders for processing and manufacturing in both of our countries,” and collaborate “to create a powerful North American critical minerals supply chain.”

Sen. Manchin invokes the deep shared history between the two countries, which, as followers of ARPN well know, includes and dates back to pre-World War II defense industrial base cooperation which continued through the Cold War and beyond, culminating in the U.S. federal code formally recognizing Canada as part of the U.S. National Technology and Industrial Base (NTIB) for national security and defense planning purposes.

Sen. Manchin argues that North American oil and gas cooperation has the potential to fill the void faced by allies and trading partners looking to shed their reliance on Russian supplies, stating that in replacing Russian product, emissions could be cut in the process because “American oil and gas is cleaner than what is produced in Russia – and certainly in Iran and Venezuela.”

Pointing to the immense growth forecast for stationary and electric vehicle batteries which require vast mineral inputs, Manchin emphasizes the need to take “security into account as we invest in climate solutions,” adding that “[i]t makes no sense whatsoever for us to so heavily invest in electric vehicles as a climate solution when that means increasing our reliance on China, because right now we’re not simultaneously increasing our mining, processing, and recycling capacity at the same rate in the United States.”

Unlike some in Washington, D.C., Sen. Manchin understands that the United States cannot just rely on partners and leverage recycling to meet U.S. critical mineral needs, and he makes clear that “the United States also needs to contribute our part to a North American minerals alliance.”

He closes:

“During this time when the U.S., Canada, and our allies and friends are threatened both by dictators weaponizing energy and by intense politicization over climate issues, we must work together to chart a responsible path forward that will ensure security and unlock prosperity for our nations.

We are the superpower of the world, and blessed with abundant energy and minerals resources. We cannot just sit back and let other countries fill the void and find ourselves in a more dire situation in the years ahead.”

As ARPN stated last October in response to former U.S. ambassador to Canada David Jacobson making a similar plea as Sen. Manchin:

“Let’s do it. Let’s build out an integrated North American supply chain for critical minerals where possible — but let’s also not forget that closer cooperation with our friends and allies AND strengthening domestic resource development should not be considered mutually exclusive strategies.”

As U.S. stakeholders grapple with the question of how to bolster U.S. supply chains for the battery criticals and other critical minerals amidst skyrocketing demand scenarios and growing geopolitical pressures, our allies are taking steps of their own to unleash their mineral potential.

Looking north, in order to “secure Canada’s place in important supply chains with other countries and [to] implement a just and sustainable Critical Minerals Strategy,” the Trudeau government 2022 budget blueprint released earlier this month proposes up to $3.8 billion over eight years beginning in the fiscal year 2022-23 in “significant investments, while working closely with affected Indigenous groups, to contribute to the development of a domestic zero-emissions vehicle chain.”  

Meanwhile, across the globe, the Australian Federal Government announced its 2022 Critical Minerals Strategy in March of this year, building on the first Critical Minerals Strategy initially published in 2019.  According to the Australian Government Department of Industry, Science, Energy and Resources, the revised strategy “has a vision to put Australia at the centre of meeting the growing demand for critical minerals. It will underpin our prosperity and security by improving access to reliable, secure and resilient supplies of critical minerals.” By de-risking projects, creating an “enabling” environment and strengthening international partnerships, the Australian government aims to make Australia a “global critical minerals powerhouse by 2030, delivering stable supply, sovereign capability and regional jobs and growth to Australia.”

In keeping with the Biden-Administration’s emphasis on leveraging international partnerships with close allies, the United States has continued to work closely with Canada and Australia to strengthen and formalize mineral resource cooperation. Most recently, Australia’s Minister for Trade, Tourism and Investment Dan Tehan and U.S. Secretary of Commerce Gina Raimondo met in Washington, D.C. at the end of March for the inaugural Australia-US Strategic Commercial Dialogue (AUSSCD) to discuss the accelerating green energy transition and related mineral resource challenges.  The executive-level roundtable highlighted the importance of developing shared approaches to ESG and traceability standards and working with other like-minded partners to build resilient supply chains.

These developments are encouraging, but tempting as it may be – particularly in light of the pervasive nature of the “paradox of the green revolution”, as Reuters columnist Andy Home called the paradox that “public opinion is firmly in favour of decarbonisation but not the mines and smelters needed to get there” – we must not be complacent and rely too much on friend-shoring.

With the advent of political campaign season, the balancing act to reconcile green credentials with the acknowledged need for domestic resource development will not get any easier for the Biden Administration.  “Friend-shoring” is certainly an important pillar of the “all-of-the-above” concept, but, in light of mounting demand and ever higher stakes with Russia’s war on Ukraine and rising resource nationalism, it is insufficient to alleviate our overall problem.

Thankfully, as ARPN has consistently argued, “[t]he good news is that courtesy of the materials science revolution, industry can harness new technologies to do expand our mining infrastructure responsibly and sustainably – (…) and as even Energy Secretary Jennifer Granholm acknowledged [last] summer during a U.S. Senate hearing:  ‘This is the United States. We can mine in a responsible way. And many places are doing it. And there are some places where there are more challenges, but we can do this.’” 

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