critical minerals

In a new piece for Metal Tech News, Shane Lasley zeroes in on the U.S. government’s failure – at least to date – to afford critical mineral status to copper, which is not only a key mainstay metal but an indispensable component in clean energy technology, and supply scenarios in the face of surging demand as the world accelerates the push towards net zero carbon are challenging at best.

Laments Lasley:

“The case for copper’s criticality is backed by commodity analysts who predict global copper production will need to double by 2035 to meet demands driven by global net-zero emission goals. Building that level of capacity in just 12 years, while at the same time not losing any output from existing mines, is a highly unlikely scenario.

(…)

Despite the growing consensus that it is going to require extraordinary measures to ensure that there is enough copper to achieve global net-zero carbon emission goals, the U.S. Geological Survey has remained steadfast in its refusal to add this metal to America’s critical minerals list.”

USGS Director Dave Applegate has publicly stated that while copper is considered an essential mineral, copper does not meet the agencies criteria for elevating the material onto the critical minerals list, an assessment that, in Lasley’s eyes, “seems to ignore the forecasts that demand will outstrip supply over the next two decades.”

Lasley points to the Copper Development Association’s (CDA’s) commissioning of an analysis mimicking USGS methodology employed for the 2022 Critical Minerals List, which the association maintains was based on out-of-date data.  The CDA-commissioned analysis concluding that copper does meet the “critical” criteria when basing the assessment on “the very latest available data.” 

As followers of ARPN well know, ARPN’s Daniel McGroarty has called for the designation of copper as a critical mineral on several occasions, and has submitted public comments to USGS to this effect.

However, USGS has remained steadfast in its refusal to re-consider copper’s status even though the Secretary of the Interior Deb Haaland has statutory authority to add copper to the Critical Minerals List without waiting for the next official update of the entire list, and has rejected a formal request by a broad coalition including federal lawmakers from both sides of the political aisle and more than 70 trade associations and unions to do so.

The U.S. Department of Energy, meanwhile, recognized the growing importance of copper and included it into its critical materials list as part of its 2023 Critical Materials Assessment. While agreeing with the USGS notion of a diverse and relatively low-risk global copper supply, the department’s inclusion of copper was prompted by a longer-time view that declining ore grades and growing competition for available resources might change the outlook so that “identifying and mitigating material criticality now will ensure that a clean energy future is possible for decades to come.”

USGS may have rejected a direct broad-based push to include copper into the overall government Critical Minerals List, but a congressional push is still underway, and the recent DOE elevation of copper’s status may provide a boost for U.S. Rep. Juan Ciscomani’s (R-Ariz.) Copper is Critical Act, which would do so with or without USGS consent.

As copper demand in an increasingly net zero world continues to grow, ARPN will watch the push to add the perhaps most critical non-critical to the official U.S. government list with great interest.

Earlier this month, the Wall Street Journal reported that Saudi Arabia was in early talks with U.S. automaker Tesla to set up a manufacturing facility in the kingdom.

While Tesla CEO Elon Musk has since denied these rumors as “utterly false,” whether or not a the two parties are in fact in talks over a rumored Saudi offer to Tesla to grant the right to purchase certain metals and from countries where the kingdom is expanding its mining footprint, is almost beside the point – the real development here is Saudi Arabia’s recent pivot away from oil towards critical minerals.

As part of his Grand Vision 2030 plan to transform the Saudi economy, the oil giant’s Crown Prince Mohammad bin Salman is preparing to invest billions of dollars into the mining sector to harness the potential of more than $1.3 trillion worth of metals and minerals the Saudi government claims are buried in the kingdom, and effectively make mining the so-called “third pillar” of the economy next to oil and gas.

Analysts say that while the crown prince’s plans are met with plenty of skepticism, even if only partially successful, implications of Saudi Arabia turning into a metals hub could have far-reaching implications not just for metals mining, but geopolitics and trade, especially if the other component of the crown prince’s plan to buy up resources from elsewhere to be refined and processed at new facilities in Saudi Arabia.

One of the first big pushes into the mining sector was a July deal in Brazil, in which Manara Minerals, established by the kingdom’s sovereign wealth fund, and Saudi Mining Co, entered into an agreement to buy a stake in Vale SA’s base metal unit, effectively making forays into the nickel and copper supply chains.

As Bloomberg reports, the kingdom’s long game is to position itself as an alternative supplier to China for the metals and minerals underpinning the green energy shift and 21st Century technologies.  The news outlet cites Khalid Al Mudaifer, vice minister of mining affairs, who said in an interview that “Saudi Arabia needs more than one engine to achieve its vision,” and that to transform itself into an economic and industrial powerhouse, the kingdom needs minerals.

In order to get there, Saudi Arabia is leaning on government subsidies and lending by state controlled funds, with the government offering big incentives – i.e. financing for up to 75% of a project and other incentives – to entice mining companies to start digging.

While so far, according to Bloomberg, auctions for exploration licenses in the country have only attracted smaller players, the crown prince’s willingness to take commercial risks might draw in the big players before long.

A good two years ago, ARPN noted that, with the clean energy transition as the catalyst, we might be leaving the Petro Age.  Saudi Arabia has clearly taken note and is taking steps to find its place in a post-Petro Tech Metals Age, by looking to boost its mining sector, and it will push forward – with a Tesla deal or without.

Back in the U.S., here’s hoping that the Biden Administration and other policy stakeholders — after taking several positive steps — also acknowledge that in a post-Petro Tech Metals Age, there is no room for simplistic “not in my backyard,” or “keep it all in the ground” mantras, and pushes forward with a comprehensive all-of-the-above strategy.

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