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Caught in the “Green Dilemma” of Securing Critical Mineral Resource Supply Chains

A few months ago, when the Biden Administration stepped up its efforts to promote its ambitious renewable energy agenda, Forbes analyst David Blackmon suggested that we might be about to “witness a replay of the politics of the Shale Revolution, only this time those politics will be playing out around the mining of the country’s own supplies of rare earth minerals.” 

Blackmon argued that with the green energy transition requiring vast amounts of critical minerals, sparks would “inevitably fly when the traditional priorities [of the anti-development green lobby and the politics that push a rapid net zero carbon transition] collide with realities on the ground.”

It appears we have reached that moment.

A few weeks ago, the Biden Administration, with the release of its 100-Day Supply Chain Report, embraced an “all of the above” approach to critical mineral resource security. Against earlier concerns that it would pursue a more selective strategy, this approach encompasses both investing in “sustainable production, refining, and recycling capacity domestically,” AND working to “diversify supply chains away from adversarial nations and sources with unacceptable environmental and labor standards” by cooperating closely with allies and partners.

A Financial Times story from earlier this week outlines the “green dilemma” the Administration is facing as it pushes to build out the United States’ rare earths capacity.  Pointing to negative reactions towards a recent announcement that Lynas, an Australian rare earths company, had received a $30m U.S. Government grant to open a new processing facility with U.S. company Blue Line in Texas, the Financial Times story says it illustrates the dilemma President Joe Biden is facing: “while rare earths such as cerium and yttrium are needed for green technologies, the mining and processing to obtain them, which takes place mostly in China, has a reputation for being polluting and environmentally damaging.”

As the piece points out, the United States currently only has one operational rare earths mining site — and no processing capacity, so that currently rare earth concentrate sourced in California has to be shipped to China for processing.

To meet soaring demand and develop supply chains that are not reliant on adversary nations, both new domestic mining and processing capabilities should be boosted, but, as one mining executive quoted in the FT piece put it, while domestic —responsible — mining would be preferable to outsourcing it to China, “[e]nvironmentalists want to have their cake and eat it. They want these materials for the EV sector — but if they’re causing environmental devastation [in China], then how are you going to put them into green technologies?”

The FT piece points to public private partnerships funded by the Department of Energy and the Pentagon to develop new technologies and methods that would extract and process rare earth elements from existing mining waste.  However, while that is a welcome development, “recycle, reuse and substitute” can only be one part of a comprehensive “all of the above” strategy, because the material inputs required to achieve a net zero carbon transition are simply too immense.

Caught in the “green dilemma,” the Biden Administration, according to a consultant cited by the Financial Times, will deny funding to companies that do not have an “environmental element” — this would be a “non-starter.”

The good news is that the mining industry of today is not your grandfather’s industry anymore, and has recognized ‘[its] responsibility and [is] trying to meet the increased expectations of consumers, society and governments” to contribute towards the push towards a greener energy future.

As such, the industry has increasingly been harnessing advances in materials science and technology to meet the challenge of developing a domestic critical minerals supply while maintaining and advancing responsible mining practices — current examples of which can be found here.

As we have previously stated:

“Recent studies — we featured the latest IEA study here — and policy experts agree: against the mounting pressures of the 21st Century Tech Metals Age, keeping it all in the ground is too simplistic, and a holistic ‘all of the above’ approach to energy and critical minerals is the only viable path to success.”