As geopolitical tensions between China and the West are on the rise, and critical mineral supply chain pressures continue to mount against the backdrop of the accelerating green energy transition, U.S. Senator Tom Cotton (R-AR) sent a letter to U.S. Secretary of Energy Jennifer Granholm demanding information from her department regarding recent reports that the Department of Energy (DOE) may provide taxpayer-funded support for a proposed lithium mine with ties to the Chinese Communist Party (CCP).
Lithium Americas, a Vancouver, Canada-based company is, according to its website, “focused on advancing lithium projects in Argentina and the United States to production,” and the company is looking to advance its Thacker Pass projection in Humboldt County, Nevada. In order to finance it, the company has applied for a loan under the DOE’s Advanced Technology Vehicles Manufacturing Loan Program, which is part of the recently enacted Inflation Reduction Act (IRA).
Writes Sen. Cotton:
“Worryingly, media reports indicate that Lithium Americas’ largest shareholder is Ganfeng, a Chinese company with direct ties to the CCP. Ganfeng is currently acquiring lithium mines around the world, which, according to former Secretary Mike Pompeo, is part of a ‘clear intention by the Chinese Communist Party to control the entire supply chain for green energy.’ The United States should be reducing its dependence on China for these critical inputs, not opening the door for China to ‘gain a foothold in America on lithium mining,’ as reported.”
He adds:
“The U.S. government should apply strict oversight regarding potential federal funding of CCP-owned or -controlled entities. DOE’s loan for the Thacker Pass mine would be substantial and reportedly cover the majority of the project’s capital costs. As the government continues to invest in battery supply chain programs, it is critical that DOE ensure taxpayer funding does not go to corporations with CCP ties and does not increase U.S. mineral dependence on China.”
Specifically, the Senator demands that the department use its leverage to “incentivize Lithium Americas to part ways with Ganfeng. Ganfeng and any other Chinese entities with CCP ties should divest their stakes in Lithium Americas before the company is offered this loan.” He further urges the department to reject Lithium Americas’ application for the ATVM if the company refuses to end its Ganfeng relationship.
Senator Cotton seeks clarification from Secretary Granholm on the following questions:
- Is DOE aware of Lithium Americas’ application for the Advanced Technologies Vehicles Manufacturing (ATVM) Loan Program and the company’s partial ownership by entities closely tied the CCP?
- What safeguards or requirements are in place to ensure the ATVM program is not funding other companies owned or controlled by the CCP or other adversaries?
- Does DOE agree that the United States must reduce its dependence on China for critical minerals like lithium and should invest in domestic production of such minerals? If so, does DOE believe that funding deeper CCP control of the U.S. critical mineral supply chain is counterproductive to this goal? If not, why not?
- Has DOE raised with Lithium Americas the possibility that its loan application for the Thacker Pass project may be harmed by the company’s partial ownership by Ganfeng or that its application may be improved if Ganfeng divested in the company?
Senator Cotton closes:
“The United States urgently needs domestic critical mineral production to supply its technology sector and reduce its dependence on China; the United States does not need and should not fund possible attempts by the CCP to deepen its control over the U.S. critical mineral supply chain.”
It will be interesting to see how the Department of Energy responds, as it was precisely the realization that our nation (and the Western world) is overly-reliant on adversary nations for its critical mineral needs across the entire value chain that led the United States to finally focus on securing its supply chains.
Whether Chinese influence over this project proves to be definitive or not depends on the facts of the matter, but Senator Cotton’s point that questions of foreign control deserve to be fully investigated before the U.S. Government confers funding seems unarguable. Government programs intended to alleviate worrisome foreign resource dependencies should not unwittingly strengthen those dependencies at the expense of the American taxpayer – and American national security.
