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Against the backdrop of the accelerating global push to net zero carbon emissions, a volatile overall geopolitical climate and a new EPA proposal to tighten tailpipe emission standards U.S. stakeholders are looking for ways to secure critical mineral supply chains.

The expectation is that with the proposed EPA rules requiring automakers to reduce carbon emissions by 56% in their 2032 models compared to 2026 models in place, 67% of new light-duty car purchase will need to be electric by 3032.

The so-called battery criticals – nickel, lithium, graphite, cobalt and manganese – hold the key to this development, but the push to secure their supply chains is, as followers of ARPN well know, fraught with challenges.

A case in point is nickel.

While a “relatively benign supply profile” kept nickel off the U.S. Government’s first List of Critical Minerals in 2018, the metal’s increased usage in EV batteries, and the USGS’s expanded criticality criteria to include materials with only a single domestic producer along their raw materials supply chains – identified as having a single point of failure – led to nickel’s incorporation into the 2021 update to the U.S. Government Critical Minerals List.

With the underground Eagle Mine in Michigan – currently the only U.S. primary nickel mine in operation – near the end of its lifecycle, stakeholders look to Michigan’s near-neighbor Minnesota, home to the Tamarack Nickel Project in Central Minnesota which is expected to start the environmental review process this year, the proposed Twin Metals underground mine which has been embroiled in an ongoing legal and regulatory battle over the years, and the PolyMet Mine in Northeastern Minnesota.

See ARPN’s recent post entitled “Critical in Spite of ‘Relatively Benign Supply Profile?’ A Look at Nickel” for more.

Earlier this week, as the House Committee on Natural Resources Subcommittee on Energy and Mineral Resources held an oversight field hearing “Examining the Mineral wealth of Northern Minnesota,” AXIOS Pro (subscription only) zeroed in on the congressional politics on the push to bolster the U.S. supply chain for the battery critical, pointing to the fact that “both Republicans and Democrats are pressing the Pentagon to use the Defense Production Act (…) to boost domestic nickel output” according to letters obtained by Axios.

As Axios’s Jael Holzman writes, the letters build off Biden’s 2022 DPA invocation to “liberate wartime authorities and funding U.S. minerals projects in a bid to unshackle the nation from foreign metals,” and the Defense Department replied to one of the letters stating that “the Department is actively engaging with companies across the United States and our allies to secure our critical mineral supply chains using DPA funds, including for nickel.”  

While recent headlines talk of a nickel glut considering Indonesia’s booming nickel output, these narratives must be taken with a grain of salt with the specter of resource nationalism and potential cartelization on the rise.  News from Moscow and Kiev indicate that and end to the war between Russia (a key global nickel player) and Ukraine is nowhere to be seen, and U.S. relations with China are deteriorating.  Faced with ever-growing geopolitical volatility, working with our allies, as per the DOD response to the congressional letters, to strengthen supply chain is an important piece of the “all-of-the-above” puzzle, but it is no panacea.

As ARPN has consistently argued, for the U.S. to achieve the lofty – and now even loftier – goals of net carbon neutrality we must embrace “a push to secure critical mineral supply chains from ‘soup to nuts’ to borrow a term used by Energy Secretary Jennifer Granholm. That means ‘all of the above,’ including domestic production and processing of metals and minerals like nickel.”

Clearly, the State of Minnesota has potential.  However, as Natural Resources Committee Chairman Rep. Pete Stauber (R-MN) said after the subcommittee field hearing:

“[I]f we’re going to unlock the full potential of our resources and secure our domestic mineral supply chains, we need the political will to implement permitting reform.”

With consensus on the need to secure critical mineral supply chains mounting on both sides of the political aisle, here’s hoping the political will to make tough choices and overcome the perennial “not-in-my-backyard” sentiment will follow suit.

As the Wall Street Journal reports, a new OECD study has found that export restrictions on Critical Minerals have increased more than fivefold from January 2009 to December 2020, suggesting that “export restrictions may be playing a non-trivial role in international markets for critical raw materials, affecting availability and prices of these materials.”  

While this significant shift to export controls – according to the WSJ mostly in the form of taxes – has been noticeable and relevant, it may just have been the tip of the iceberg.

In the wake of a global pandemic, related supply chain shocks and with the Russia-Ukraine war raging on, the trade dimension of geopolitics has become the new frontier in the tech wars between Beijing and Washington, DC – a relationship in which conflict has been smoldering over the past few years, especially over Rare Earth Elements (REEs).

As we outlined in a recent post, Western nations have made decoupling from China – which has long held a strategic stranglehold over Critical Mineral supply chains – a priority and have pursued a strategy of “friendshoring.”

Observers were waiting to see if China would retaliate in response to the United States’ recently imposed set of sweeping controls on advanced semiconductors and semiconductor manufacturing equipment aimed at China and a related agreement with Japan and the Netherlands.

It may not prove to be a long wait.  According to Nikkei reporting earlier this month, China has since announced that it is considering prohibiting exports of certain rare earth magnet technology through updates to a technology export restrictions list last issued in 2020.

The looming export control ratchet and increasing tensions between China and the West are troubling South Korea – which has in the past walked a fine line between the United States and China – its “leading economic partner and increasingly dominant neighbor” – and has publicly balked at the U.S. effort to isolate China from semiconductor supply chains.

Regardless of that fine line, public opinion towards China has been souring in South Korea, and diplomatic relations with the country are also getting tense as Seoul summoned China’s ambassador to protest Beijing’s criticism of remarks made by President Yoon in an interview with Reuters on Taiwan.

The looming specter of China restricting technology exports has South Korea’s industrial sector worried, prompting the government to announce a “strategy to secure core minerals” to reduce its dependence on Chinese critical mineral imports for from the current 80 percent to 50 percent by 2030.

In the context of this strategy, the South Korean Ministry of Trade, Industry and Energy designated 33 as critical minerals and named 10 of those as strategically critical minerals, including the “battery criticals” lithium, nickel, cobalt, manganese and graphite and five types of rare earth materials considered crucial in 21^st century tech applications including the manufacture of semiconductors.  ARPN followers will note that Korea’s 10 “strategically critical minerals” list  – assuming the five REEs are those used in permanent magnets — squares up with ARPN’s “Super Criticals,” circa April 2022.

As part of a push to “expand and strengthen bilateral and multinational cooperation with resource-rich countries” a public-private delegation of officials from South Korea’s public and private sectors is currently visiting Chile and Argentina to “explore ways to boost cooperation on supply chains of lithium and other major minerals and the development of natural resources.” 

The country is also stepping up domestic and global investment.  Last month, South Korean President Yoon Suk Yeol announced that the government and companies including Samsung Electronics Co. would invest $422 billion into chip making and EV manufacturing projects in what Bloomberg calls “the nation’s most aggressive effort yet to win a heated global race for tech supremacy.”

Seoul is further looking to  provide $5.32 billion on financial support to its domestic battery makers looking to invest in infrastructure in North America, while also looking to upgrade its partnership with India with a focus on trade, investment and strengthening critical mineral supply chains.  To put South Korea’s $5.3 billion in context, at 1/12^th the size of the U.S. economy, that’s equivalent to the U.S. Government allocating more than $60 billion to Critical Mineral supply chains.

Whether or not China escalates export controls for critical minerals remains to be seen – though officials already finished taking expert comments on the planned restrictions reported by Nikkei earlier this month and the changes are expected to go into force this year – it is becoming increasingly clear that a “huge realignment” in the critical minerals space is underway, and its one that not only sees the West looking to reduce Chinese resource dominance, but also sees allegiances shift in Asia itself.

The time has come for the United States to get “serious about mining critical minerals for green energy,” writes Saleem H. Ali for Nature. Ali points to the inherent irony of the green energy transition — renewable technologies requiring vast and increasing amounts of metals and minerals like lithium, copper, nickel, cobalt, manganese and REEs, but [...]

With demand for critical minerals projected to increase dramatically against the backdrop of geopolitical tension and strained supply chains, the European Union has released its long-awaited action plan to “ensure the EU’s access to a secure, diversified, affordable and sustainable supply of critical raw materials.” The Critical Raw Materials Act (CRMA) presented to lawmakers in Brussels on March [...]

Sometimes hailed the “fuel of the green revolution,” lithium has been the posterchild of the “battery criticals.”  Start with the fact that the leading battery technology underpinning the shift towards net zero carbon emissions is called “lithium-ion.” With its high electrochemical potential and light weight, the commercialization of the lithium-ion battery has transformed and accelerated the renewables shift.  Lithium is [...]

When it comes to the metals and minerals underpinning the green energy transition, and specifically the EV battery revolution, much of the spotlight has fallen on lithium — and for good reason, as we will discuss in a forthcoming post.  However, as ARPN’s latest review of the “battery criticals” against the backdrop of the just-released latest iteration of [...]

 In this post, we continue our review of the “battery criticals” (lithium, cobalt, graphite, nickel and manganese) against the backdrop of the just-released 2023 iteration of the USGS Mineral Commodity Summaries.  Next up:  cobalt. With the material accounting for up to 20% of the weight of the cathode in a typical lithium-ion EV battery, cobalt was considered the highest [...]

Earlier this week, USGS released its latest iteration of the annual Mineral Commodity Summaries, a much-cited report that every year gives us a data-driven glimpse into our nation’s mineral resource dependencies. It’s fitting that ARPN reviews the report on Groundhog Day, February 2nd, because just like in the Bill Murray classic movie, in which the clock jumps [...]

As part of the Biden Administration’s efforts to bolster U.S. critical mineral supply chains, and specifically the battery supply chain, the Department of Energy’s Loan Programs Office (LPO) has announced a conditional commitment to Ioneer Rhyolite Ridge to advance the domestic production of lithium and boron. Under the conditional commitment, the LPO would lend up to $700 [...]

As world leaders continue to deliberate on the new realities of the post-Cold War world order in Davos this week,  ARPN takes a second look at the realignment underway in the minerals sector.  In this post, we shift our focus to the West, where the “Three Amigos Summit,” as the trilateral North American Leaders’ Summit between the prime minister [...]