American Resources Policy Network
Promoting the development of American mineral resources.
  • 2018 – A Tipping Point For U.S. Resource Policy and Related Industries?

    The following is a guest post by ARPN expert panel member Chris Berry, Founder, House Mountain Partners. His expertise focuses on, but is not limited to, energy metals including Lithium, Cobalt, Graphite, Vanadium and Rare Earths.

    The Executive Order recently signed by President Trump to prioritize domestic natural resource development couldn’t have come at a better time. Though the idea of foreign dependence on critical raw materials such as rare earth elements, lithium, and cobalt is not a new one, globally synchronized economic growth and a new Administration in Washington have many thinking that “this time could be different” and a new approach and attitude towards domestic raw material extraction and processing has increased in importance.

    Technology has traditionally been a deflationary “force for good” specifically in the energy industry (think about how hydraulic fracturing and horizontal drilling in the oil and gas business has put OPEC on its heels and allowed a US-based oil and gas business to compete anew). The leadership that the US has shown in this industry is in no small part due to the research and development funding from the US Government in past decades. It is not a stretch to expect the same deflationary phenomenon to affect the mobility and energy storage industries underpinned by lithium ion batteries.

    Technologically-driven cost deflation can be seen in other industries such as the lithium ion battery business where the cost per kilowatt-hour (KWh) has fallen by roughly 10 to 14% per year since 2000. This has massive implications for both the energy industry (renewable energy deployment and grid integration) and automobile industry (electric vehicle adoption). Most experts expect cost parity between a full electric vehicle and a traditional internal combustion engine early in the next decade. What are we in the United States doing to get ready for this massive shift with respect to security of supply of raw materials?

    We are clearly at a tipping point for these industries, as their increasing need for critical minerals and metals intersects with an aggressive China, making security of supply of raw materials a small but highly significant Achilles Heel of supply chain management. The United States has numerous well known deposits of critical minerals, such as lithium and cobalt, many of which at today’s prices are economic to extract and process. So what are we waiting for? What we have lacked historically is the political will to find a balance between national security, commerce, and environmental concerns. President Trump’s Executive Order is a welcome, though controversial, first step in reckoning with this challenge that has profound consequences for US competitiveness and job creation going forward.

  • Automakers Pledge to Uphold Ethical and Socially Responsible Standards in Materials Sourcing. Where Will the Metals and Minerals Come From?

    Late last month, international automakers made headlines when pledging “to uphold ethical and socially responsible standards in their purchases of minerals for an expected boom in electric vehicle production.”

    As Reuters reported, a group of 10 car manufacturers have formed an initiative to “jointly identify and address ethical, environmental, human and labor rights issues in raw materials sourcing.”

    Members of the so-called “Drive Sustainability” partnership include Volkswagen, Toyota Motor Europe, Ford, Daimler, BMW, Honda, Jaguar Land Rover, as well as Scania and Volvo.  According to Stefan Crets of the CSR Europe business network, the alliance will “assess the risks posed by the top raw materials (such as mica, cobalt, rubber and leather) in the automotive sector (…)” which will “allow Drive Sustainability to identify the most impactful activities to pursue” as automakers tackle supply chain-related issues.

    While a commitment to ethical and socially responsible standards is certainly welcome, followers of ARPN will understand that it is fraught with challenges and raises the question of where materials will come from.

    Take Cobalt, for example: Roughly 62 percent of global refined Cobalt is sourced in the Democratic Republic of the Congo (DRC), where production conditions are commonly known to involve child labor and poor environmental standards.

    Supply issues relating to other critical materials carmakers require – which include not only the above-referenced Mica, Cobalt, Rubber and Leather, but also Graphite and Lithium, as carmakers invest more in electric vehicle (EV) technology – are less well known but equally challenging.

    Case in point:  Lithium Ion batteries, a key component of EV technology, use both naturally-mined flake Graphite as well as synthetic Graphite, in which the former accounts for roughly 60% of inputs, and the latter for roughly 40%. According to Simon Moores, Managing Director of Benchmark Minerals and member of the ARPN panel of experts, China – arguably not a leader in environmental standards – dominates natural flake mining at 62% of global production in 2016, followed by Brazil at 23%.  A similar scenario unfolds for refining, most of which also takes place in China.  China’s graphite mining standards have come under fire and were featured in an in-depth Washington Post piece last year.

    Mica sourcing is another problematic area.  Used in car paint and coveted for its ability to reflect and refract light, Mica has raised red flags in the past for child labor issues in its supply chains. The U.S., which is 100% import dependent to meet its sheet Mica needs (but only 48% import dependent for scrap and flake Mica), is fortunate to import most of its supply from close ally Canada, but once again, a large portion of imports are sourced from China (32%), which also accounts for the majority of global Mica output, followed by India (13%).

    Automakers are not the first ones to pledge ethically and socially responsible sourcing of materials – problems relating to Cobalt have previously prompted tech giants like Apple and Tesla to rethink their sourcing strategies, with Apple even going as far as announcing their goal of working towards a “closed-loop supply chain where products are built using only renewable resources or recycled material.”

    In their quest to meet pledged goals, automakers should join forces with those who promote efforts to create policy frameworks that foster both recycling and the responsible mining of mineral resources we need today, and will increasingly rely on in the future.

  • Nickel – The “Metal That Brought You Cheap Flights” Now “Secret Driver of the Battery Revolution”

    Another week, another great infographic by Visual Capitalist – this time on the “Secret Driver of the Battery Revolution” – Nickel. Long an important base metal because of its alloying capabilities, Nickel’s status as a Gateway Metal, yielding access to tech minerals like Cobalt, Palladium, Rhodium and Scandium – all of which are increasingly becoming [...]
  • Moores’ Law: The Rise of Lithium Ion Battery Megafactories and What it Means for Critical Mineral Resource Supply

    Earlier this month, Simon Moores, Managing Director of Benchmark Mineral Intelligence and member of the ARPN panel of experts testified before the full U.S. Senate Energy Committee on opportunities and risks in the energy storage supply chain.   We’re titling his observations as Moores’ Law — which is his for the taking, given the placement [...]
  • Senate Energy Committee Zeroes in on Energy Storage Revolution – Where Will the Battery Megafactories Get the Minerals and Metals They Need?

    Just last week, we highlighted the surge in EV technology and its implications for mineral resource supply and demand.  A timely subject – as evidenced by the fact that the U.S. Senate Committee on Energy held a “Full Committee Hearing “to Examine Energy Storage Technologies” this week.  Simon Moores, Managing Director of Benchmark Mineral Intelligence [...]
  • The Surge of EV Technology and Implications for Mineral Resource Supply and Demand

    You may have caught Elon Musk’s exchange with Daimler on Twitter over investment in EV technology earlier this week. Vacuum giant Dyson has also tossed its hat into the ring announcing that it will spend $2.7 billion to develop an electric car. The headlines are piling up, and it’s no longer a secret that demand [...]
  • Why Cobalt Should be High on Your Radar

    In a recent article, the Financial Times zeroes in on one of the metals followers of ARPN will know is becoming increasingly indispensable to 21st Century clean energy technology: Cobalt.  Once an obscure metal you rarely heard about, this co-product of Nickel and Copper is increasingly afforded “critical mineral status” – primarily because of its [...]
  • Urban Mining – No Panacea but Important Piece of the Resource Strategy Puzzle

    Advances in materials science continue to transform the way we use metals and minerals, and in doing so, also change the supply and demand scenarios for many materials. As we recently pointed out on the ARPN blog, demand for Cobalt has been soaring thanks to its applications in battery technology and the growing popularity of electronic [...]
  • Cobalt Demand on the Rise – But What About Supply?

    Once an obscure metal most people had rarely heard about, Cobalt, a co-product of Nickel and Copper, is becoming a hot commodity and is increasingly afforded “critical mineral” status. The main reason for this development is Cobalt’s application in Lithium-ion battery technology. Soaring demand for rechargeable batteries and the growing popularity of electric cars have sent the [...]
  • Cobalt – First Steps Towards Reducing Mineral Resource Dependencies?

    A recent piece for InvestorIntel zeroes in on a metal which, due to its growing use in battery technology, coupled with a challenging supply scenario is increasingly afforded “critical mineral” status – Cobalt. A co-product of Nickel and Copper, the metal’s recent history, as author Lara Smith argues, has been “chaotic.” ARPN agrees that about sums it up. Criticism regarding the [...]