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Against the backdrop of mounting geopolitical and ongoing supply chain challenges, countries are left grappling with the the mineral intensity of the sought-after global transition towards a net zero carbon emissions future.

In their quest to untangle complex critical mineral supply chains and reduce over-reliance on adversary nations, the extent of which was first brought to light in the coronavirus pandemic, nations are not only forming partnerships like the recently-announced Minerals Security Partnership (MSP), which Reuters’s Andy Home likens to the formation of a “metallic NATO,” they are also taking their own steps to secure supply chains for domestic manufacturers.

In the following, we’re taking a look at resource related activities in countries beyond ARPN’s usual purview (which of course is focused on the United States but sometimes includes our close allies Canada and Australia):

• Earlier in July, the United Kingdom released its first ever Critical Minerals Strategy, setting out, in the words of Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng, the UK’s “plan to secure our supply chains, by boosting domestic capability in a way that generates new jobs and wealth, attracting investment and playing a leading role in solving global challenges with our international partners.”

  The announcement comes only days after the launch of a Critical Minerals Intelligence Centre (CMIC), which seeks to “boost the country’s resilience and growth by providing up-to-date data and analysis on the supply of critical minerals,” and “develop evidence-based policies aimed at developing more robust critical mineral supply chains to the UK.”

• Germany, too, is taking steps to decouple from adversaries and bolster its domestic supply chains emphasizing domestic production, processing and recycling over imports.  Upon taking office, the new Federal Government  set itself the ambitious goal of presenting a comprehensive National Security Strategy within its first year. The process was kicked off in March of 2022, a few weeks after the Russian invasion of Ukraine, which served as an eye opener for Germans and Europeans in terms of their dependence on Russian energy supplies, particularly oil and gas. Consequently, Foreign Minister Annalena Baerbock has made clear that Germany must ensure that it cannot again fall victim to blackmail as it did over its dependence on Russian energy, and is looking for ways to reduce the country’s economic dependence on China, which is particularly high when it comes to supplies of Rare Earths.

  In the same vein, the German Federal Institute for Geosciences and Natural Resources (BGR), in partnership with the German Resource Research Institute (GERRI) has released a research paper calling for a “rethink” for German resource policy. Outlining that German resource policy rests on three pillars — imports, domestic development and processing, and recycling — the authors of the report call for strengthening the second and third pillar over the first one going forward.

• But it’s not just Western nations feeling the heat — South Korea, too, is starting to feel vulnerable over critical minerals.  The Korean National Assembly Research Service has said that “securing metal resources will be a key to energy security, and stressed the importance of plans to stockpile metal resources and diversify suppliers.”

  A founding member of the Mineral Security Partnership (MSP) led by the United States, South Korea is planning to “draw up related measures such as measures to stockpile more mineral resources,” after having neglected its resource policy over the past decade, according to researchers.

These are only a few examples of mineral resource policy developments beyond ARPN’s usual purview, but they all make one thing abundantly clear:  With geopolitical tensions rising, countries are realizing that critical mineral resource supply chains are vulnerable to manipulation or weaponization, and are taking steps to shore up their domestic development and processing capabilities.  All-of-the-Above increasingly appears to be the order of the day.  Friend-shoring is an important pillar of any resource strategy, but must be embedded into a comprehensive approach from mine to manufacturing and across all segments of the value chain.

Already burdened with increasingly volatile supply chains in the wake of the coronavirus pandemic, rising geopolitical tension and Russia’s war on Ukraine, automakers’ drive towards net zero emissions is facing an additional challenge as environmental, social and governance pressures on the industry increase.

The latest case in point concerns one of the new materials on the U.S. Government’s Critical Minerals List — nickel:

Earlier this week, dozens of environmental non-governmental organization (NGOs) sent an open letter to Tesla CEO Elon Musk and company shareholders, asking that the company terminate plans to invest directly into Indonesia’s nickel industry over concerns that the company’s plans would result in disposing of mining waste into the ocean, increased deforestation, and overall pollution.

The NGOs further demanded that the company ban nickel sourced and produced in the country from being used in any of Tesla’s business lines.

The letter, according to Reuters, was sent in the wake of a meeting between Indonesia’s President Joko Widodo and Musk in Texas in May to discuss the company’s potential investments.

A critical ingredient in lithium-ion battery technology, nickel has been in the crosshairs of automakers’ worries for quite some time, even before Russia’s invasion of Ukraine.  Experts were issuing warnings that global demand for EV battery grade nickel could outstrip supply by 2024, and Elon Musk famously called on global mining companies in 2020 to boost production of nickel in early 2020, when he publicly announced:

“Any mining companies out there … wherever you are in the world, please mine more nickel. (…)  Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way. (…) Don’t wait for nickel to go back to some high point you experienced five years ago (…).”

The good news is that while Indonesia may be the biggest producer of nickel globally, and U.S. nickel production had been considered “objectively very lame,” as Musk lamented on Twitter that year, things are changing.

U.S. President Joe Biden in March of this year invoked the Defense Production Act to encourage domestic production of the metals and minerals deemed critical for electric vehicle and large capacity batteries, including nickel, and the Administration has acknowledged that “the need to domestically produce more metals is rising as EV’s go mainstream, but that new mines must not harm the environment.” 

The mining industry is ready to meet this challenge and has increasingly been harnessing advances in materials science and technology to help develop domestic critical minerals supplies while maintaining and advancing responsible mining practices.

Followers of ARPN may recall Tesla’s recent deal with Talon Metals Corp, developing a new nickel project in Minnesota, which Elon Musk singled out, “due to plans to make the electric vehicle battery metal in a way it considers more environmentally friendly.”

As we outlined, this is the mine site for which the U.S. Department of Energy recently announced a $2.2. million award to fund to a Rio Tinto-led project to achieve carbon capture by a process that mineralizes the carbon in rock – a process far more stable than methods that inject carbon, where it remains vulnerable to seepage and fracturing due to earthquakes.

This may not be a silver bullet for the auto industry’s nickel woes — but, as the Indonesia situation shows, to ensure supply chain security for its manufacturers critical mineral needs, the U.S. is well-advised to pursue a comprehensive all-of-the-above approach to resource policy that promotes the domestic — socially and environmentally responsible — production and processing of critical materials.

The mainstream media and parts of the political establishment may just now have begun to realize it — but followers of ARPN have long known that our nation’s critical mineral woes are real, and go beyond the often discussed battery criticals (lithium, cobalt, nickel, graphite, and manganese) and include one of the key mainstay metals: (…) more

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For years, ARPN and others in the mineral resource policy realm have lamented a lack of public focus on the importance of securing critical mineral supply chains.  Fast forward to a global pandemic prompting lockdowns, resulting supply chain shocks, Russia’s war on Ukraine and rising resource nationalism in the Southern Hemisphere, and the issue has gone (…) more

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