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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.

The Russian invasion of Ukraine and subsequent additional supply chain challenges have prompted the European Union — already grappling with strained supply chains in the wake of the coronavirus pandemic — to step up its critical minerals game.

During her State of the Union address on September 14, European Commission President Ursula Von der Leyen announced plans to introduce legislation to identify potential strategic critical raw material projects along the supply chain and build up reserves in areas where supply is at risk.

Highlighting that almost 90% of rare earths and 60% of lithium are currently being processed in China, Von der Leyen said “[a] single country currently dominates almost the entire market. We must avoid becoming dependent again, as with oil and gas.”

She added:

“We know this approach can work. Five years ago, Europe launched the Battery Alliance. And soon, two third of the batteries we need will be produced in Europe.

Last year I announced the European Chips Act. And the first chips gigafactory will break ground in the coming months.”

The announcement is more than timely.  The European Union expects its own demand for rare earths alone to increase fivefold by 2030.  And the latest analysis by ARPN’s friends at Benchmark Mineral Intelligence finds that more than 300 new mines for graphite, lithium, nickel and cobalt would “need to be built over the next decade to meet [global] demand for electric vehicle and energy storage batteries,” and that is already taking into account the recycling of raw materials — without factoring in closed loop solutions, the number shoots up to almost 400.

In the U.S., the energy provisions in the recently passed Inflation Reduction Act, following on the heels of the invocation the Defense Production Act for the “battery criticals” lithium, cobalt, nickel, graphite and manganese, are expected to send a strong signal to investors that the United States, too, is serious about “building the secure, responsible industrial base our economy and national security needs.”

However, many issues remain.

One of them is the “costly and inefficient permitting process” making it “difficult for American businesses to invest in the extraction and processing of critical minerals in the United States,” as Ford Motor Company’s chief government affairs officer Christopher Smith lamented in a recent letter to the U.S. Department of Interior.

The other challenge is an “inter-departmental tug-o-war” that hinders actual progress.  As Shane Lasley  wroterecently for North of 60 Mining News:

“While the departments of Commerce, Defense, and Energy are forging ahead with programs and investments aimed at ensuring America has the minerals and metals needed to support the clean energy objectives outlined by the White House, and enabled by the Bipartisan Infrastructure Law and Inflation Reduction Act, DOI is pumping the breaks on a domestic project that would produce the requisite raw materials.”

It remains to be seen if stakeholders on both sides of the Atlantic are able to advance their critical mineral ambitions, but one thing, in the words of Forbes contributor Wal van Lierop, is clear: “[W]ithout massive investments in base metals and key minerals, Europe and North America will fail to meet their carbon emission targets and face a new form of energy insecurity.” 

Against the backdrop of ongoing supply chain challenges around the globe, the urgency of untangling and securing critical mineral supply chains essential to a net zero carbon emissions future is becoming increasingly clear. Following on the heels of the Biden Administration invoking the Defense Production Act for the “Battery Criticals” – lithium, cobalt, graphite, nickel and manganese [...]

Just as a new federal law – the Inflation Reduction Act of 2022 – may send a much-needed investment signal to the underdeveloped critical mineral supply chains for EVs and other 21st  century technologies, many of which are rife with underinvestment, political risk and poor governance – lawmakers and policy experts gathered for a two-day two-day conference hosted by the [...]

In a new piece for Canada’s Globe and Mail, Niall Mcgee discusses China’s quiet but systematic campaign to corner the critical minerals segment in Canada and stakeholder reactions in Ottawa, or more precisely, the lack thereof. Citing the 2019 acquisition of the Tanco Mine in Manitoba, known as one of the world’s few sources of cesium [...]

As countries and corporations continue the global quest towards net zero carbon emissions, the U.S. Congress has passed what some consider landmark legislation to address climate change and bolster our nation’s economic and national security. The clean energy provisions in the Inflation Reduction Act negotiated by Senators Chuck Schumer (D-NY) and Joe Manchin (D-WV) — [...]

As pressures continue to mount, U.S. stakeholders are beginning to realize the urgency of building supply chains “that are safer, more secure and not beholden to a country that has multiple human rights violations, predatory lending practices, and vast national security complications.”  For now, however, too often, automakers still have to turn to Chinese suppliers to meet [...]

In a new piece for RealClearEnergy, John Adams, U.S. Army brigadier general (ret.), argues that the newly proposed Inflation Reduction Act, negotiated by Senators Chuck Schumer (D-NY) and Joe Manchin (D-WV) is not only the most ambitious climate bill in U.S. history, but also represents an opportunity to bolster our nation’s economic and national security.  General [...]

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 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: [...]