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American Resources Policy Network
Promoting the development of American mineral resources.
  • Panelists at U.S. House Hearing Stress Dangers of America’s Growing Resource Dependence

    During yesterday’s oversight hearing on the subject of “Examining Consequences of America’s Growing Dependence on Foreign Minerals,” before the House Natural Resources Committee, panelists raised some of the key issues we have consistently highlighted on our blog.

    Panelists included:

    • Mr. Ronnie Favors, Administrator, U.S. Defense Logistics Agency, Strategic Materials, U.S. Department of Defense
    • Dr. Murray Hitzman, Associate Director for Energy and Minerals, United States Geological Survey
    • Dr. Richard Silberglitt, Senior Physical Scientist, Rand Corporation
    • Ms. Katie Sweeney, Senior VP, Legal Affairs and General Counsel, National Mining Association
    • and Ms. Carlotta Tilousi, Council Member, Havasupai Tribe, Sepia, Arizona

    Full written testimony along with the video of the hearing are available on the committee website, but we wanted to highlight some of the points raised by one of the panelists, Dr. Silberglitt.

    Invoking the example of Tungsten, and the findings of a “RAND Corporation Study entitled Critical Materials: Present Danger to U.S. Manufacturing,” Dr. Silberglitt argued that

    “Dependence on imports is not necessarily a problem, as long as manufacturers have access to a global supply chain with fair market prices. Concerns arise when supply chains are dominated by countries that have weak governance or exercise control over their materials production sector. In such cases, U.S. manufacturers are vulnerable to export restrictions that limit their access. This can result in lower prices for manufacturers in the producing country, thereby hindering the international competitiveness of U.S. manufacturers and creating pressure to move manufacturing away from the United States and into the producing country.”

    The elephant in the room, according to Silberglitt, is – you probably guessed it – China, which as ARPN followers know is the biggest producer of global supplies for many metals and minerals we are dependent on — and is no stranger to export restrictions and other market distortion tools.

    According to Silberglitt,

    “Actions to increase resiliency can take two different forms: those that encourage diversified production and processing of critical materials and those that involve the development of alternative sources, such as secondary production or alternative inputs to manufacturing.”  

    Silberglitt said progress was being made in the former, but maintained that “the uncertainty created by a highly concentrated market is a barrier that must be overcome by actions at the local, national, regional and global levels to create a favorable and sustainable climate for the investments and time needed to bring diversified supplies into place.”

    Later in the hearing, the National Mining Association’s Katie Sweeney made the case for a merit-based review of federal land withdrawals, and stressed the issue of an onerous and duplicative permitting system hampering the United States’ ability to compete with jurisdictions like Canada and Australia – both of whom have equally high social and environmental standards when it comes to mining yet offer a significantly more streamlined permitting structure.

    Towards the end of the Q&A, Chairman Paul Gosar (R-Ariz.) entered into the record a study recently authored by the latest member of the ARPN expert panel – Dr. Ned Mamula’s “Strategic Minerals: The Embarrassment of Riches.” Most panelists agreed with the thrust of his report that the United States, which has vast mineral resources beneath our own soil, could and should do more to harness this potential.

    With a Senate hearing on the permitting processes at the Department of the Interior and the Federal Energy Regulatory Commission for energy and resource infrastructure projects also held yesterday, this week is a good week for mineral resource policy awareness on Capitol Hill. Here’s hoping policy makers mull over what they heard during the holidays and begin tackling the issues at hand in the new year.

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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 [...]
  • McGroarty before U.S. Senate Committee: “Increased Resource Dependence Jeopardizes U.S. Economic Strength and Manufacturing Might”

    In his testimony before the U.S. Senate Committee on Energy and Natural Resources on “the Near-Term Outlook for Energy and Commodities Markets” last week, ARPN Principal Daniel McGroarty argues that while in the long-run, the market is self-corrective, there are certain actions that should be taken while we wait for that long-run to arrive if [...]
  • American Resources Principal Daniel McGroarty testifies before House Committee on Natural Resources Subcommittee

    Last week, American Resources principal Daniel McGroarty testified before the U.S. House of Representatives Committee on Natural Resources Sub-Committee on Energy and Mineral Resources on the issue of “America’s Mineral Resources: Creating Mining & Manufacturing Jobs and Securing America.” Commenting specifically on one of the bills pending in the committee, the ‘‘National Strategic and Critical [...]
  • America’s Mineral Resources: Creating Mining & Manufacturing Jobs and Securing America

    Testimony presented by Daniel McGroarty – Oversight Hearing of the U.S. House of Representatives Committee on Natural Resources Sub-Committee on Energy and Mineral Resources, March 21, 2013 Chairman Lamborn, my thanks to you and your colleagues on the House Sub-Committee on Energy and Mineral Resources for the opportunity to testify today. I am Daniel McGroarty, [...]

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