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In a comprehensive new piece for Foreign Policy, director of the Payne Institute and professor of public policy at the Colorado School of Mines Morgan Bazilian, and postdoctoral fellow at the Jackson Institute for Global Affairs at Yale University Gregory Brew take a closer look at the recently passed Inflation Reduction Act’s energy provisions, which in their view holds the key to “reclaiming critical mineral chains.”

While providing billions of dollars to “buttress U.S. energy security while also addressing climate change,” the IRA ties EV tax credits to strict sourcing restrictions:

Qualified cars must be assembled in North America and adhere to mandated “escalating levels of critical minerals to be sourced from the U.S. or a country with a free-trade agreement with the U.S.”

The escalating levels of sourcing requirements for applicable battery critical minerals (with the bill defining an extensive list of applicable minerals) are as follows:

“40% for a vehicle placed in service before 1 January 2024;

50% for a vehicle placed in the service during calendar year 2024;

60% for a vehicle placed in service during calendar year 2025;

70% for a vehicle placed in service during calendar year 2026; and

80% for a vehicle placed in service after 31 December 2026.

The bill places similar restrictions on the percentage of value of the components, but leading up to a 100% requirement for vehicles placed in service after 31 December 2028.”

Write Bazilian and Brew:

“For the first time, U.S. policy is directly tying the supply of these little-understood minerals to a massive paradigm shift in the automobile market. As the markets for these materials are diverse, global, and dominated largely by China, this offers a rare instance of bipartisan concern.

The purpose of the policy is threefold. The Biden administration wants to accelerate the energy transition to low carbon technologies; encourage domestic manufacturing; and improve U.S. energy security, ostensibly by reducing its dependence on foreign supplies of the minerals needed to support the energy transition.”

However, as followers of ARPN well know, the sourcing requirements pose a fundamental challenge for the United States, leading Bazilian and Brew to conclude that “[w]here the 20th century featured battles over access to oil, the 21st century will likely be defined by a struggle over critical minerals, particularly as the United States views China as a global competitor and strives to limit its reliance on Chinese supplies for EV manufacturing and a wide variety of energy and defense technologies.”

Outlining the scope of the geopolitical challenges and China’s dominance along the critical minerals value chain, as well as the United States’ need to catch up, Bazilian and Brew identify “five essential areas” that can “help provide the basis for a vibrant, more resilient, and more robust set of supply chains – and thus support energy transitions effectively”:

1. A focus on sustainable mining, building on the dramatic improvements of mining practices over the last decades, will not only provide cutting edge solutions but also allow “for a new narrative to emerge for the sector” which is still seen as “dirty, outmoded and unsophisticated.”
2. Increasing transparency and functionality in critical mineral markets can help eliminate “ineffective market signals for investment, obstacles that can cause huge roadblocks to production and trade.
3. Reframing the debate on critical minerals in the context of supply chains rather than “just rocks,” and taking into consideration the “gateway metal” and “coproduct” relationships (Bazilian and Brew use different terminology but invoke the same concept ARPN followers are familiar with) of many critical minerals will help stakeholders design effective policy solutions.
4. Circular economy concepts in which recycling of materials once products reach the end of their life span need to be emphasized and strengthened and harnessed in the U.S., where rates are “terribly low.”  
5. A focus on permitting as well as social acceptance will hold “a key to success in the critical mineral space.” 

Bazilian and Brew conclude:

“The IRA promises a drastic reduction in U.S. carbon emissions and an acceleration of the energy transition away from fossil fuels. The United States needs more wind turbines, solar panels, and electric cars. But to make that possible, it will need more mines.”

As Shane Lasley outlines in his most recent publication, “Critical Mineral Alliances 2022,” we have an entire arsenal from which we can draw to succeed in the 21^st Century battle over critical minerals, but it will take a concerted effort, and one that requires reaching across the political aisle:

“[t]he optimum solution to laying the foundation for the next epoch of human progress will only be discovered through the forging of unlikely alliances between the woke and old school, environmental conservationists and natural resource developers, liberals and conservatives, national laboratories and private sector entrepreneurs, local stakeholders and global mining companies, venture capitalists and innovators, and everyone else with visions of a cleaner, greener, and high-tech future.”

From where we stand, the challenge of the 21^st Century’s Tech Metals Age begins with a change in mindset toward mining.

In a recent piece for The Hill, Adina Renee Adler, deputy executive director of Silverado Policy Accelerator, a Washington, D.C.-area based think tank, calls for the increased harnessing of circular economy concepts in service to U.S. critical mineral resource policy.

Acknowledging bipartisan efforts to strengthen U.S. critical mineral supply chains in the past year, for which she says Congress should be commended, Adler says “the truth is the United States won’t be able to produce or stockpile its way out of the current critical mineral crisis.” 

She argues that leveraging the circular economy model in the context of which stakeholders “recover still-viable critical materials from existing products and reintegrate them into commerce via a ‘reverse supply chain,’ rather than solely extracting new minerals from mines,” can not only “prevent environmental degradation and combat climate change by reducing waste and limiting the need for new, carbon-intensive manufacturing and extraction,” but “will also be crucial to reducing the United States’ dependence on strategic adversaries for critical minerals.” 

Adler cites USGS numbers and a recent peer-reviewed study indicating “that recycling from select consumer goods and recovery from the byproducts of other mining and phosphate processing could yield from two to 11 times the volume of rare earth elements that could be extracted through processing the raw materials.”

She adds:

“Although cost, availability and quality are major factors in the success of recycling, the potential is nevertheless there to retrieve up to three-and-a-half times more dysprosium from recycling earbuds than from ores, six times more lanthanum from hybrid batteries, six times more neodymium from spent polishing powders and 11 times more scandium from aluminum and other “red mud” ore processing.  This yield could be a significant secure source of critical materials with the acceleration of the circular economy.”

Australia is also looking to the circular economy as part of its efforts to “treat… this waste as a source of value,” which a recent piece in The Conversation considers a means to “reducing the environmental footprint of mining while producing critical minerals and other vital products such as sand.”

The Conversation piece cites a number of promising initiatives ranging from miners looking to recover what comprises one of the largest deposits of rare earth elements from the tailings from iron ore mining at the Luossavaara-Kiirunavaara Aktiebolag mine in Sweden via a circular industrial park and projects to recover critical materials from coal ash, to investments in secondary prospecting and development such as Rio Tinto’s A$2 million investment into a new startup using income from mine waste mineral recovery to pay for mining site rehabilitation.

However, given the sheer size and scope of our nation’s critical mineral woes against the backdrop of ever-increasing geopolitical stakes, the solution to our mineral resource and supply chain challenges still lies in a comprehensive “all-of-the-above” approach, in which closing the loop is one tool in our toolkit.

Adina Renee Adler acknowledges this in her piece.  While outlining the potential of the circular economy, she stresses the importance of closing the loop for certain metals and minerals “in tandem with its efforts to boost domestic production of critical materials.”

As ARPN has stated elsewhere, there is no immediate silver bullet, but against mounting resource pressures, focusing on closing the loop and building out domestic production and processing capabilities — while at the same time fostering cooperation with close allies and scaling up research and development — are all essential to secure resource supplies in the long run.

Against the backdrop of the accelerating global push towards net zero carbon emissions, the authors of a May 2021 KPMG study on “geographical and geopolitical constraints to the supply of resources critical to the energy transition” and the associated “call for a circular economy solution” titled the first chapter of their report “From OPEC to ‘OMEC’: the new global energy ecosystem.” In a [...]

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