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In recent months, industry news has been dominated by headlines like “carmakers face raw material bottleneck.”

And while, rightfully, against the backdrop of the accelerating green energy transition and EV revolution, much of the coverage focuses primarily on supply chain challenges arising for the battery criticals Lithium, Cobalt, Nickel, Graphite and Manganese, it’s not just the battery materials that are giving automakers headaches these days.

A case in point is luxury carmaker Ferrari’s recent announcement that “soaring commodity prices would begin affecting the prices of its new supercars.”

While the company has reportedly seen “better-than-expected fourth-quarter earnings as shipments jumped during the pandemic” according to ZeroHedge.com, prices for its supercars, currently ranging between $200k and $400k would likely see increases as there is “some pressure on the energy on the aluminum cost (…),” with aluminum being a material on which Ferrari relies heavily in the construction of its frames, engines, transmissions, body, suspension, paneling and rims.

However, aluminum is not just a key component for luxury supercars – its light weight, corrosion resistance and its recyclability make it a material of choice in the lightweighting revolution (ARPN followers may recall the Light Rider) and the overall green energy transition.

But, as the Ferrari announcement indicates, trouble is on the horizon. As ZeroHedge.com outlines, “rocketing power prices across [Europe] shuttered four aluminum smelters which curtailed about half a million tons of annual capacity. European aluminum prices have surged more than 350% since the pandemic low in early 2020 to about 450 euros per ton.”

The “winter of discontent for Europe’s aluminium smelters,” as Reuters columnist Andy Home described the recent struggle of aluminum smelters in the region, will likely widen the already existing regional supply deficit as Europe, even before the closures, was already a net importer of primary aluminum.

As Home notes, “[t]the United States is also a net importer of primary aluminium and is now facing increased competition from Europe for spare metals. And both are in competition with China, which is importing significant volumes after a run of power-related curtailments across its huge smelter network.”

Home invokes what he calls the “aluminium  paradox”:

“It’s a metal that is core to the energy transition, but can only be produced in virgin form using very large amounts of energy, which is increasingly at a premium due to decarbonization.”

Not far from this is the “inherent irony” or “paradox of the green revolution” Home invoked elsewhere, referring to the paradox that “public opinion is firmly in favour of decarbonisation but not the mines and smelters needed to get there.”

It’s time for a reckoning, we clearly can’t have our cake and eat it, too.  Achieving global (and domestic) decarbonization goals while at the same time strengthening our supply chains and reducing our over-reliance on critical minerals from China will require a comprehensive “all of the above” approach across the entire value chain. But, as ARPN’s Daniel McGroarty has pointed out on several occasions, “we don’t have the luxury of time” anymore.  The reckoning needs to happen at Ferrari supercar speeds.

This week we continue our coverage of the just-released draft revised Critical Minerals List, for which the US Geological Survey (USGS) began soliciting public comment last week — this time via Andy Home’s latest.  In a new column for Reuters, Home zeroes in on the “only two new additions” to the draft list. (As ARPN outlined last week, the bulk of the expansion of the list from 35 to 50 minerals and metals is owed to the fact that the Rare Earths and Platinum Group Metals will now be listed individually).

Arguing that the additions of Nickel and Zinc “reflect… an evolution of the methodology used to determine whether a mineral is critical to the well-being of the U.S. economy,” Home provides a window into the drafters’ reasoning for including them.

For Nickel, he writes that while a “relatively benign supply profile kept nickel off” in the past, there are two reasons for including it on the updated List.

Pointing to the only domestic operating Nickel mine in the U.S. and a single producer of Nickel sulphate (which only produces Nickel as a co-product), Home says “the USGS has expanded its criticality criteria to look beyond trade dependency to domestic supply, particularly what it calls ‘single points of failure.’”

The second reason, according to Home, is “nickel’s changing usage profile from alloy in stainless steel production to chemical component in electric vehicle batteries.”  The rapid uptake of EVs as a key to the net-zero carbon transition has propelled Nickel onto the Critical List.

While for Zinc, the U.S. domestic supply chain is “less fragile,” according to Home, “the country’s refined zinc import dependency is relatively high,” and “[g]lobal supply trends make this problematic.”

Homes closes by noting that neither of “…these industrial metals feature on the European Union’s critical minerals list. In part that’s a reflection of Europe’s domestic production base both at the mining and smelting level.  But in part it may be because the USGS is ahead of its European peers in analysing global supply patterns and the resulting potential threats to critical minerals availability.

Nickel and zinc may not spring to mind when most people think of critical minerals, but as far as the United States is concerned, they both are.”

Against the backdrop of the accelerating global push towards a low carbon energy future, which as followers of ARPN well know will be mineral-intensive, the mining industry — which currently accounts for between 4% and 7% of man-made greenhouse gases according to a McKinsey & Company report — has in recent years taken significant steps [...]

Shane Lasley has done it again.  Known to followers of ARPN for his stellar reporting on critical mineral resource issues from an Alaskan perspective, his Metal Tech News project has published what may just be the most comprehensive North American primer on critical minerals: Critical Minerals Alliances is a magazine covering more than twenty metals and minerals critical to North American [...]

In the wake of several eye-openers regarding our nation’s critical mineral supply chain woes — the coronavirus pandemic, increasing trade tensions with adversary nations like China, and reports underscoring the mineral intensity of our green energy future — the bipartisan infrastructure package passed by the U.S. Senate before the August recess contained a series of [...]

In a recent piece for Reuters, columnist Andy Home unpacks the U.S. Senate-passed bipartisan infrastructure package.   While the bill has yet to make it through the U.S. House of Representatives and a likely conference committee, it is worth taking a look at what its passage could mean for the critical minerals sector. According to Home, the [...]

The Biden Administration made clear early on that it is committed to pursuing a low-carbon energy future, and battery technology is a key driver underpinning the shift away from fossil fuels. Just a few weeks ago, when touting his infrastructure package at Ford’s electric vehicle plant in Dearborn, President Joe Biden declared: “The future of [...]

Critical Minerals policy-wonks:  if you wagered that Rare Earths would be the leading elements in the Biden 100-Day Report in terms of mentions, you’d be wrong. That’s right — we took a look at the Biden Administration’s just-released 100-day supply chain assessment, and created a word cloud based on the number of mentions (footnotes included) of [...]

[Note from Sandra Wirtz: As ARPN digs through the White House Supply Chain Report, we are completing the week with posts that “preview” metals and minerals prominently mentioned in the Report – beginning with copper.] “The road to decarbonisation will be paved with copper (…) and a host of other minerals, all critical for electric [...]

As the U.S. explores its options when it comes to diversifying our critical minerals supply chains away from China in the wake of COVID-19, Europe is coming to grips with its own mineral supply challenges. According to European metals association Eurometaux, the region “has reached a critical fork in the road,” as it grapples with [...]