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American Resources Policy Network
Promoting the development of American mineral resources.
  • 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.

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  • 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 of the apostrophe. If he hasn’t used it yet, he should.
     While we already featured Moores’ top line points regarding the rise of Lithium Ion megafactories (also see the chart), we would be remiss if we didn’t share some of his takeaways on the implications for the main critical raw material inputs for this technology – namely Lithium, Graphite, Cobalt, and Nickel — and add some additional thoughts. 

    Lithium

    • For Lithium carbonate and Lithium hydroxide, the “base chemicals that the battery industry seeks,” Benchmark Mineral Intelligence sees a 10-fold increase in the industry’s demand profile over a ten-year timeframe. Lithium is largely sourced from Chile, Argentina and Australia, and is processed into battery grade in the U.S. and China. 

    • Meanwhile, in a recent op-ed for the Reno Gazette Journal, professor emeritus of mining engineering at the University of Nevada, Jaak Daemen, citing an even higher demand profile increase for Lithium, argued that with only one Lithium mine in the U.S., the United States is unprepared to meet demand with the main problem not being the lack of resources, but “a regulatory approach that endlessly delays bringing mines in production.” 

    Graphite

    • Lithium Ion technology uses 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 Moores’s testimony, China 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. 

    • According to Moores, “[w]hile large flake graphite mines are being developed outside of China in Mozambique, Canada and the US, processing capacity to make anode material is still lagging.”

    • As we previously highlighted, the U.S. currently produces zero Graphite, with the last American Graphite mine having closed 25 years ago. 

    • As Moores points out, however, two Graphite companies are currently seeking to mine and process flake graphite for battery grade material in the U.S., so there is hope the supply picture will change domestically.

    Cobalt

    • According to Moores, 64% of the Cobalt consumed globally in 2016 was mined in the Democratic Republic of the Congo (DRC), with China dominating the “refining step in the supply chain with 57% of global capacity.”

    • With Cobalt also being a Co-Product to Gateway Minerals like Copper and Nickel, Moores argues that “the fortunes of Cobalt – now driven by battery demand – is still at the mercy of Nickel and Copper commodities which is drive by industrial demand. This is causing long term planning issues for the EV supply chain.”

    • You can read ARPN’s latest blog item on Cobalt here

    Nickel

    • With advances in battery technology and changing formulas, Moores sees battery grade Nickel demand grow “from 75,000 tpa in 2016 to anywhere between 300-400,000 tpa by 2025.” 

    • Nickel production is in the million of tons a year, and from a U.S. point of view, the supply picture recently changed with our import dependence dropping from roughly 50 percent to currently 25 percent with new domestic projects having come online.  

    • However, as Moores points out, “the battery grade chemical material is specialist with only a handful of major producers outside of China.”

    Ultimately, this is food for thought for any discussion regarding the comprehensive mineral resource strategy our nation sorely needs.

    Says Moores:

    “Where we stand today in 2017, China is not only a the center of mass market EV development and deployment but also of cathode production, battery grade raw material refining and the building of the new battery cell capacity.  Those that control raw material and chemical / cathode refining know how and capacity will control the lithium ion battery supply chain. And those that control the lithium ion battery supply chain will be the biggest influencers on the next generation auto and energy industries.”

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  • 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 [...]
  • Graphene-fed Spiders and Our Web of Resource Dependencies 

    A material long hailed as being on the cutting edge of materials science, Graphene is making headlines again. And, fitting for fall and people gearing up for Halloween, it involves everyone’s favorite creepy crawlies – arachnids.  Researchers at the University of Trento in Italy have found that spiders fed with graphene and carbon nanotubes, which [...]
  • North Korean Brinkmanship Highlights Nexus Between Resource Policy and Geopolitics

    At ARPN, we have long highlighted the important but oft-overlooked nexus between resource policy and geopolitics.   The latest case in point is South Korea, which, as ARPN President Daniel McGroarty points out in his latest opinion piece for Fox News, is navigating murky waters “talking sunshine and Rare Earths as North Korean war clouds gather.” For decades, [...]
  • McGroarty on Critical Minerals: “It’s Not Your Grandfather’s Infrastructure”

    The New Year is now a little over a week old and the inauguration of the 45th President of the United States is just around the corner.  And while some are still dwelling on 2016 (we offered our post mortem at the end of the year), the time has come to look at what’s in store. One of [...]
  • Graphite: At the Core of Your Pencil, 21st Century Technology, and Geopolitical Resource Warfare

    It may be its most well-known use, but Graphite today is at the core of more than just your pencil – it is at the core of 21st Century consumer technology.  Just ask Elon Musk. The Tesla Motors CEO and futurist recently insinuated that the label “Lithium-Ion battery” may actually be a misnomer for the batteries that power [...]
  • Tesla Motors’ Gigafactory to Drive Critical Mineral Demand

    The graphite, lithium and cobalt industries are set for major demand surges as Tesla Motors prepares to break ground on its super-battery plant, the Gigafactory, next month. The high-end EV manufacturer is looking to double the world’s battery output as it seeks to bring the production cost of battery packs down in a bid to [...]
  • Graphite to play major role in coming materials revolution

    We have had a fair amount of graphite- and graphene-related coverage on our blog in recent months – but for good reason. As analyst Byron King argues, graphite, as one of the primary carbon raw materials in a naturally occurring form, and allotropes of carbon, such as graphite nanotubes and graphene, will play a major [...]

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