This Visual Capitalist graphic may not exactly qualify as a picture – but is certainly reveals a lot about the complexity and urgency of the West’s critical mineral woes, and underscores how China has managed to corner the strategic and clean energy materials supply chain especially when it comes to processing.

According to the graphic, China has the edge when it comes to producing Rare Earths, currently accounting for 60 percent of global production.  China also produces 13 percent of global lithium supplies – another key material underpinning the green energy transition.  However, it is the processing segment of the supply chain where China has systematically established firm grip and has attained a startling level of control, accounting for 35 percent of global nickel refining, 58 percent of lithium refining, 65 percent of cobalt refining, and a whopping 87% of global REE refining. Expressed a little flippantly, it’s the processing, stupid.

The chart must be viewed against the backdrop of the accelerating global push towards carbon neutrality, evidenced most recently by electric vehicle sales outpacing diesel car sales in Europe for the first time in history.

In light of the growing urgency to secure critical mineral supply chains, the United States’ notable absence from the Visual Capitalist chart should give pause to stakeholders.

As National Mining Association president and CEO Rich Nolan argued in a November 2021 op-ed, while the United States still has a shot at winning the EV revolution, it is currently not only not in the lead, but is “being lapped” by China.

Benchmark Mineral Intelligence data shows that while battery megafactories have gone mainstream, with 225 plants in the pipeline as of August 2021.  While the U.S. is no longer a bystander in this race, only very few megafactories are currently located in the United States.

To succeed in this environment, Benchmark Mineral Intelligence’s Simon Moores says stakeholders will need to understand the lithium-ion-to-EV supply chain, its individual sections, and the linkage between them:

“Automakers who quickly understand the importance of these linked steps in the battery supply chain to the quality and cost of their EVs will be the most successful at navigating the next decade. 

For governments, the shifts in the economics of the supply chain […] provide opportunities to create jobs, garner influence over a strategic industry, and establish new trading relationships, particularly relevant as Europe and the United States, under a Biden presidency, will seek to reduce reliance on China as a single point in the supply chain.”

While first steps to strengthen supply chains have been taken (refer to our comprehensive Year in Review post from December 2021) and stakeholders are increasingly realizing the severity of the problem we’re facing, many have yet to fully embrace a comprehensive “all-of-the-above” strategy to secure our supply chains.

What we outlined in December of last year remains true today:

“The challenge is too large to address piecemeal. While recycling, substitution, and partnering with allies should be part of any overall comprehensive strategy, strengthening domestic mineral resource development across the entire value chain must be a key focal point of our efforts if we want to ensure reliable access to the critical minerals we need to meet our current and future needs.”

China will certainly not wait for us to catch up.

The post It’s the Processing, Stupid? The Critical Mineral Supply Chain Challenge Visualized appeared first on American Resources Policy Network.

a Last Look Back at the United States’ Critical Mineral Resource Challenge in 2021

Well, two words, for the sticklers.  Merriam Webster may have gone with “vaccine,” but for ARPN, there was really no doubt. As one article put it, “2021 is the year ‘supply chain’ went from jargon to meme.”  

As we noted more than once in 2021, the first word in supply chain is supply – a broad hint that we should wonder, and in many cases worry, about where we get the constituent parts and essential materials that make our EVs, our laptops, computers and CT scanners, smart phones, and smart bombs.

Even cookies – not the website kind, more the chocolate-chip variety.  As Sesame Street’s Cookie Monster put it in a 2021 New Yorker Cartoon: “What me wants to know:  What are the implications of the supply-chain crisis for cookie?”

For ARPN, it all added up to a teachable moment:  A reason to step back from the magic of modern life and ask, where does the stuff that makes our stuff come from?

And what better time to take that step back than mid-December, which is customarily the time for ARPN to take stock and assess what has happened on the critical mineral resources front in the past twelve months — where we are, and, filled with hope for a new year, where we are headed.

COVID-19 and Push Towards Net Carbon Zero as Catalysts

With the U.S. presidential elections behind us, one of the two key issues dominating the news cycle in 2020 has faded into the background, but of course the ongoing coronavirus pandemic has not. Vaccines have brought hope and have helped save lives, but the arrival of new virus variants have made clear that the issue is here to stay.

In 2021, two major themes — the ongoing coronavirus pandemic and the accelerating global push towards net carbon zero dominated headlines.

Both themes served as catalysts for the rise of one key issue in the mineral resource realm and beyond:  Securing the Supply Chain.

After all, the supply chain is what everything hinges on these days — our success in the fight against the coronavirus pandemic, the global push towards net carbon zero, buying a new car, putting presents under the Christmas tree, or (if you’re trying to find cream cheese for that traditional holiday dessert) just minding our day-to-day business in our personal lives.

In 2020, we were given a first glimpse into the challenges associated with an over-reliance on foreign, and especially Chinese, raw materials, the effects of which were being felt across broad segments of manufacturing.

In 2021, the extent of our supply chain vulnerabilities has reached crisis levels.

Where We Began – Amidst Big Policy Shifts, Signs for Continuity in Mineral Resource Realm

Observers of the critical mineral resource realm saw early indications that, unlike some other policy areas, critical mineral resource policy would display a certain level of continuity. In December of 2020, then-Assistant Secretary of State (Energy Resources) Frank Fannon declared that he expected the Energy Resource Governance Initiative (ERGI) — an initiative aimed at securing supply chains for metals critical for the clean energy transition — would continue in 2021, and policy statements made by the transition team suggested that, while emphases were certainly going to shift, efforts to secure critical mineral supply chains was going to continue taking a central role under an incoming Biden Administration.

Remarks made by the incoming Secretary of Energy Jennifer Granholm, before the Senate Committee on Energy and Natural Resources in January signaled that the Biden Administration acknowledged the urgency of our nation’s critical minerals challenge, and the importance of securing supply chains:

“If we are to build the supply chain for batteries, as one example, if we allow for China to corner the market on lithium or for the Democratic Republic of Congo to be the place where everyone gets cobalt when there may be child labor or human rights violations associated with that supply, then we are missing a massive opportunity for our own security but also for a market for own our trading partners that also may want to have access to minerals that are produced in a responsible way.”

She added, “the responsible way is an important thing to mention — we know we can mine in a responsible way.”

The Push towards “Building Back Better” 

One of the key priorities of the Biden Administration would dominate the domestic policy agenda for much of 2021.  President Biden’s “Build Back Better” agenda: an economic recovery package seeking to “make historic investments in infrastructure, along with manufacturing, research and development and clean energy.”

The increased focus on clean energy brought the critical minerals challenge to the forefront of the political discourse.  As followers of ARPN well know, the road to a lower-carbon future is paved with critical metals and minerals – not least evidenced by the instructive World Bank report entitled “The Mineral Intensity of the Clean Energy Transition,” which estimated that production of metals and minerals underpinning the shift, such as the battery tech metals graphite, lithium and cobalt, would have to increase by nearly 500 percent by 2050 to meet global demand for renewable energy technology. To achieve the transition to a below 2°C pathway as outlined by the Paris Agreement, the deployment of wind, solar and geothermal power, as well as energy storage will require more than three billion tons of minerals and metals.

The growing emphasis on clean energy on the part of the Biden Administration, embedded into a global push towards net zero carbon emissions that began to accelerate in 2020 and has continued into 2021, culminated in the 2021 Climate Change Conference (COP26) commitments by various countries, territories, and automakers to sell only zero-emission vehicles by 2040.  Against the backdrop of these commitments, and the growing awareness of the mineral intensity of sustainably greening the future, supply chains took center stage.

Supply Chains Take Center Stage – the White House’s 100 Day Supply Chain Report

On June 8, 2021, the White House released its 100 Day Supply Chain Report — key findings from reviews directed under Executive Order 14017 “America’s Supply Chains” (E.O.14017). Signed on February 24, 2021, the Executive Order instructed President Biden’s economic and national security teams to conduct a 100-day review of four key U.S. supply chains across federal agencies to assess the nation’s “resiliency and capacity of the American manufacturing supply chains and defense industrial base to support national security [and] emergency preparedness.” 

The report assessed the risks and vulnerabilities for several key industry sectors — semiconductors, high- capacity batteries, medical supplies and critical and strategic metals and minerals, and offered recommendations on how to address the challenges.  Not only did the report endorse an all-of-the-above approach to critical mineral resource policy, by looking to  invest in “sustainable production, refining, and recycling capacity domestically,” while at the same time looking to “diversify supply chains away from adversarial nations and sources with unacceptable environmental and labor standards” by working closely with allies and partners. The Department of Defense-led chapter also specifically acknowledged the importance of the inter-relationship between what we at ARPN have been calling “gateway metals” and their “co-products.”

See ARPN’s report on the 100 Day Supply Chain Review here.
To learn more about the Gateway Metal/Co-product relationship, click here. 

 On July 22, 2021 the House Armed Services Committee’s bipartisan Defense Critical Supply Chain Task Force, chartered in March of 2021 to “review the industrial base supply chain to identify and analyze threats and vulnerabilities,” released its final report, which includes key findings and policy recommendations, many of which mirror the Administration’s 100-Day Supply Chain report in the context of an all-of-the-above approach.

Against mounting pressures, hope was building that both reports would create sufficient momentum to translate recommendations into actual policy, programs, and projects to address the nation’s deep shortfalls in Critical Mineral supply.

Shoring Up Supply Chains in the Wake of the 100 Day Supply Chain Report

Industry Deals
Only weeks after the release of the 100 Day Supply Chain Report, several deals struck in the critical mineral resource realm suggested that the “all of the above” approach was off to a good start.

International Cooperation
Efforts to promote closer collaboration with allied nations to secure stable supply of critical minerals had already been underway in 2020, and continued in 2021, in line with the all-of-the above approach endorsed by the 100 Day Supply Chain Report.  In this context, relations with long-standing trading partners Canada and Australia remained the focal point, but stakeholders also called for increased leveraging of the National Technology and Industrial Base (NTIB), which, originally established to strengthen technology links between the U.S. and Canada in 1993, was expanded in 2016 to include the United Kingdom and Australia. 

Industry Efforts to Sustainably Green Our Future
Acknowledging their role and responsibility in supporting and building out “sustainable production, refining, and recycling capacity domestically,” the mining sector and associated industries have made significant capital investments and – long before 2021 – began harnessing the materials science revolution to meet increased expectations of consumers, society, and governments to support the green energy transition.  ARPN has, over the course of 2021, featured many of the industry initiatives to that effect, and will continue to do so going forward.

 Examples of recent industry initiatives to sustainably green the future can be
found here and here.

Legislation and the New Draft Critical Minerals List
While several pieces of critical minerals legislation never made it out of Congress, the bipartisan infrastructure package passed by Congress and signed by President Biden contains key provisions ranging from mine permitting reforms, to investments in carbon capture and critical mineral mapping initiatives aimed at strengthening critical mineral supply chains.

Meanwhile, the fact that a new draft Whole-of-Government Critical Minerals List released by USGS in November with a request for public comment has grown from 35 to 50 metals and minerals deemed critical for U.S. economic and national security (– essentially half of the naturally-occurring elements on the Periodic Table –), is proof of the critical role these materials play in our Tech Metal Era.

See our commentary on the new draft list here, here, and here.

Once finalized, the updated list, additions and omissions to which we featured in a series of blog posts, may provide fresh impetus for policy reform in 2022.

The NIMBY Challenge
While much is being done to shore up U.S. supply chain security, efforts continue to face a significant hurdle:

For all of the verbal affirmations of an “all-of-the-above” approach to mineral resource policy on the part of the Biden Administration, the overall plan thus far appears more geared towards “rely[ing] on ally countries to supply the bulk of the metals needed to build electric vehicles and focus[ing] on processing them domestically into battery parts, [as] part of a strategy designed to placate environmentalists.”

The latest manifestation of this challenge became apparent at a November 2021 congressional hearing, during which U.S. Representative Scott Peters (D-Calif.) suggested that rather than onshoring minerals production, the U.S. should try “friend-shoring,” adding that “it seems like we should be working with our allies to develop new mines and factories for clean energy technologies in more favorable locations.”

While the “friend-shoring” concept is an important pillar of the “all-of-the-above” concept and highly appealing especially to those policy makers with “not in my backyard (NIMBY)” constituencies, it is insufficient to alleviate our overall problem.

As Thom Carter, energy adviser to Utah Gov. Spencer Cox and executive director of the Governor’s Office of Energy Development, argued in a piece for the Deseret News, the “keep it all in the ground” push by “Washington, D.C. and the East and West Coasts” provides little more than a “talking point. (…) Anyone who says that you can get power through a ‘keep it in the ground’ policy isn’t telling you the truth. (…) All power, whether traditional or renewable, is impacted by what comes out of the ground. Advocating for renewable energy sources also means maintaining, if not expanding, our mining infrastructure.”

The good news is that courtesy of the materials science revolution, industry can harness new technologies to do expand our mining infrastructure responsibly and sustainably – as we outlined above, and as even Energy Secretary Jennifer Granholm acknowledged this summer during a U.S. Senate hearing:

 “This is the United States. We can mine in a responsible way. And many places are doing it. And there are some places where there are more challenges, but we can do this.” 

A Sense of Urgency:  On China, Winning the Battery Arms Race, and the Overall Critical Minerals Challenge

While not making as many headlines this year, the tech war between China and the United States, the extent of which was exposed in 2020 as the coronavirus pandemic placed a magnifying glass on our mineral resource dependencies, continued in 2021. In essence, this tech war is a competition ““to see which country will dominate the 21st Century Technology Age, in which our ‘Achilles heel’ is our over-reliance on foreign metals and minerals underpinning 21st Century technology.”  The tech war has a number of battlefronts, ranging from aviation to space technology, from biotech and quantum sciences to robotics, and from military technology to artificial intelligence.

From an ARPN perspective, critical mineral resources are – in the military sense of the term — the materiel from which modern weapons of war are fashioned, and within that context, aside from the rare earths challenge, perhaps the biggest theater of U.S.-Chinese confrontation is the battery arms race, which in 2021 not only continued, but punched into overdrive.

As National Mining Association president and CEO Rich Nolan argued in a November 2021 op-ed, while the United States still has a shot at winning the EV revolution, it is currently not only not in the lead, but is “being lapped” by China, which jockeyed for pole position in the EV race a long time ago and has since attained a startling level of “control of the EV supply chain, particularly the production and processing of minerals that make lithium-ion batteries possible.”

As Benchmark Mineral Intelligence data shows, the battery arms race trend was set in motion in 2015 – but today the megafactories are mainstream, with 225 plants in the pipeline as of August 2021.  While the U.S. is no longer a bystander in this race, only very few megafactories are currently located in the United States.

To succeed in this environment, Benchmark Mineral Intelligence’s Simon Moores says stakeholders will need to understand the lithium-ion-to-EV supply chain, its individual sections, and the linkage between them:

“Automakers who quickly understand the importance of these linked steps in the battery supply chain to the quality and cost of their EVs will be the most successful at navigating the next decade. 

For governments, the shifts in the economics of the supply chain […] provide opportunities to create jobs, garner influence over a strategic industry, and establish new trading relationships, particularly relevant as Europe and the United States, under a Biden presidency, will seek to reduce reliance on China as a single point in the supply chain.”

And in stern message for us as we look to the new beginnings of a new year:

“Those who do not see the importance of the lithium-ion battery will have no meaningful future.”

All-of-the-Above and Supply Chains in 2022 – Beyond Verbal Commitments 

2020 was a watershed year to expose the extent of our nation’s over-reliance on foreign mineral resources. Meanwhile, considering the aftershocks of pandemic-related policy measures such as lockdowns, and a new global resolve to pursue a low carbon energy future we feel confident to say that 2021 could go down in history as the Year of the Supply Chain.

While several steps were taken to address associated challenges, pressures will only continue to mount – particularly when it comes to the sought-after global green energy transition. Stakeholders increasingly realize the urgency of the situation, as the mineral resource-focused passages the freshly codified infrastructure bill underscore.

However, many have yet to fully embrace a comprehensive “all-of-the-above” strategy to secure our supply chains.

Consequently, current efforts “might pale in comparison to the scale and pace of mineral demand growth,” as Reed Blakemore of the Atlantic Council lamented in a recently released study on the role of minerals in realizing US transportation electrification goals.

The challenge is too large to address piecemeal.

While recycling, substitution, and partnering with allies should be part of any overall comprehensive strategy, strengthening domestic mineral resource development across the entire value chain must be a key focal point of our efforts if we want to ensure reliable access to the critical minerals we need to meet our current and future needs.

New Years are an invitation to take stock – a phrase with multiple meanings now that our just-in-time economy has rudely reminded us that stocks can be rapidly depleted, and dependencies exposed.  Here’s hoping that as we survey our prospects for 2022, it will be the year we take critical minerals and metals as seriously as Cookie Monster takes the things that make his cookies….  cookies.

If “supply chain” could move from jargon to meme in 2021, maybe 2022 can be the year that strengthening supply chains can move from rhetoric to reality.

The post ARPN’s 2021 Word of the Year: Supply Chain appeared first on American Resources Policy Network.

In a recent blog post for the company blog, Benchmark Mineral Intelligence’s managing director Simon Moores — who is also a member of the ARPN panel of experts — recounts how the term he first mentioned in 2015 has gone mainstream.

When he first used the phrase in 2015, Moores’ company was tracking seven lithium Ion battery megafactories.

A lot has changed since then, as followers of ARPN well know — thankfully not just in terms of global numbers, but also in terms of what has been happening in the United States, where efforts to overhaul critical mineral resource policy and securing our supply chains are finally being prioritized.

Writes Moores:

“Be under no illusions that this is a moment. 

The battery arms race trend was set in motion in 2015, but we can now comfortably say: ‘the megafactories are mainstream.’ The journey has taken Benchmark to the top of world governance including The White House, The Pentagon and The G7.

The world’s governments are listening. And with this political will adding to industry commitment, Benchmark’s Lithium ion Battery Megafactory Assessment now reads 225 plants and rising.

And the USA is no longer a bystander.”

As our federal policy makers reconvene after their August recess, here’s hoping that the momentum for reform in the context of the battery arms race, generated in part by the Biden Administration’s 100-Day Supply Chain assessment (which we covered in our latest report) carries over and does not fizzle.

The post The Genesis and Development of the “Battery Arms Race” appeared first on American Resources Policy Network.

Targeting supply chains for semiconductors, high-capacity batteries, medical supplies and rare earth metals, the White House aims to “identify ways to secure U.S. supply chains against a wide range of risks and vulnerabilities.”

The executive order comes against the backdrop of two recent announcements which mark a pivotal moment for EV battery technology in the United States: President Biden’s declaration to shift the entire federal vehicle fleet to EVs made in America, and General Motors’ announcement to cease production of cars powered by combustion engines by 2035. Undoubtedly, this will further heat up the already “turbocharged” lithium-ion-battery-to-electric-vehicle (EV) supply chain.

As the National Mining Association’s Rich Nolan wrote in a recent RealClear Energy piece, this moment “offers both the potential for significant progress in reducing emissions and the opportunity for the U.S. to win the accelerating race for the future of the auto industry and the millions of jobs it supports.” But he cautioned that “if we don’t get serious about building the domestic mineral supply chain to support it, it’s a race we could lose.”

Followers of ARPN know that we are already “in the midst of a global battery arms race in which the US is presently a bystander” — and that China, having taken the “initiative to build battery capacity at speed and scale” has long taken the pole position.

Citing Benchmark Mineral Intelligence data, Nolan pointed to the fact that while 142 battery megafactories are currently in the pipeline worldwide, of these 107 will be in China, with 53 already actively producing. Meanwhile, there are currently only nine megafactories lined up in the United States.

To succeed in this environment, Benchmark Mineral Intelligence’s Simon Moores says stakeholders will need to understand the lithium-ion-to-EV supply chain, its individual sections, and the linkage between them:

“Automakers who quickly understand the importance of these linked steps in the battery supply chain to the quality and cost of their EVs will be the most successful at navigating the next decade. For governments, the shifts in the economics of the supply chain outlined in this article provide opportunities to create jobs, garner influence over a strategic industry, and establish new trading relationships, particularly relevant as Europe and the United States, under a Biden presidency, will seek to reduce reliance on China as a single point in the supply chain. Those who do not see the importance of the lithium-ion battery will have no meaningful future.”

It’s not too late yet, but time and a firm commitment are of the essence. Concludes Nolan:

“Catching up to China will mean building an EV supply-chain strategy from the mine up. The U.S. has the resources to do it. What we need now is a commitment to prioritize the production and a mines-to-markets strategy that enables us to build infrastructure for the electrification of transportation that will support American industry and millions of American workers.”

President Biden’s executive order and the confirmation of Secretary of Energy Jennifer Granholm are early indications that the current administration understands the stakes. Here’s hoping that decisive action to strengthen our domestic critical mineral supply chains from EVs to Rare Earths and beyond will follow.

The post A Pivotal Moment to “Get Serious About Building the Domestic Mineral Supply Chain” appeared first on American Resources Policy Network.

It feels like just a few weeks ago many of us quipped that April 2020 seemed like the longest month in history, yet here we are: It’s mid-December, and we have almost made it through 2020. It’s been a challenging year, and the holidays certainly look very different for many of us. One thing, however has not changed: The end of the year is the time to take stock and assess what has happened in the past twelve months, where we are, and where we are headed.

While two major issues — the ongoing coronavirus pandemic and the U.S. presidential elections — sucked up most of the oxygen in the public discourse and garnered most of the media’s attention, it has been an incredibly busy year on the mineral resource policy front. So, without further ado, we’re offering ARPN’s take on 2020 from a critical mineral resource perspective:

Where We Began — Incremental Progress in 2019 in the Wake of E.O. 13817

For the most part, the U.S. mineral resource policy realm had seen slow but steady incremental progress in 2019. Faced with mounting supply chain pressures and growing trade tensions with China, stakeholders had continued to push for comprehensive resource policy reforms in the wake of Presidential Executive Order 13817 of December 20, 2017, “A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals.”

Against the backdrop of a previously-signed memorandum of understanding (MOU) for critical materials between the United States and Canada to reduce U.S. reliance on Chinese rare earth supplies, and the FY2020 National Defense Authorization Act (NDAA) which furthered a 2019 mandate for the U.S. military to not only buy non-Chinese rare earth permanent magnets but rather develop and implement a strategy to establish a “total domestic American rare earth supply chain” for all rare earth-enabled products utilized by the U.S. military, 2020 was shaping up to be a “pivotal year for rare earths.”

Meanwhile, with the battery arms race intensifying and Chinese-American trade tensions continuing to escalate, interest in a national policy conversation on critical minerals had increased. That notwithstanding, partisan pressures on Capitol Hill remained a key obstacle for reform because, as one observer noted as late as December 2019, the prevailing sentiment was that “neither [political] party’s base sees critical minerals as such a dire threat.”

The First Few Weeks of 2020 – Staying the Course towards an “All-of-the-Above”Approach on Critical Minerals

Efforts to strengthen mineral resource cooperation between the United States and our Canadian and Australian allies, which had hit a stride in 2019 with the signing of several cooperative agreements and the formation of the U.S.-Canada Critical Minerals Working Group, were off to a good start: On January 9th of this year, the U.S. and Canada announced the finalization of its Joint Action Plan on Critical Minerals Collaboration, and in February, U.S. and Australian officials met in Washington, D.C. to further flesh out a joint U.S.-Australia Action Plan on Critical Minerals.

On Capitol Hill, Sen. Lisa Murkowski (R-Alaska) and Joe Manchin, (D-W.Virginia)., released the text of their energy innovation package in late February, which contained provisions to streamline the federal permitting system for mining projects, calling for research and development on recycling and developing alternatives to critical minerals, the development of analytical and forecasting tools to evaluate critical minerals markets, and the strengthening of the critical minerals workforce. With regards to rare earths, specifically, the package called for the enactment of a program to “develop advanced separation technologies for the extraction and recovery of rare earth elements (REEs) and minerals from coal and coal byproducts,” and respective reporting to Congress.”

Coronavirus as Watershed Moment – Pandemic Exposes Vulnerabilities, Serves as Catalyst

Already, however, the global spread of the coronavirus began to overshadow all developments. In the weeks and months that followed, COVID-19 pandemic not only took over headlines all over the world, it also slowed down economic activity, drastically scaled back public life, turned parents into homeschool teachers, and sent financial markets into turmoil.

It also, perhaps more than any other event in recent memory, began to expose the depth of our supply chain challenges associated with an over-reliance on foreign, and especially Chinese, raw materials, the effects of which were being felt across broad segments of manufacturing.

While early on in the pandemic, the focus was on critical medicine —from basic drugs to treat COVID-19 to N95 surgical masks to guard against its spread —it quickly became apparent that, as ARPN’s Dan McGroarty observed in March of this year, “just as critical medicines from China are integrated across the U.S. health care spectrum, so too are critical minerals imbedded into all aspects of the U.S. supply chains for energy, high-tech manufacturing – and most worryingly, national defense.”

Tech War Exposed

While arguing that China had “no intention to fight either a Cold War or a hot one with any country,” Beijing has long engaged the U.S. in a “technology war,” of which most of the American public has been unaware. In essence, this tech war is a competition “to see which country will dominate the 21st Century Technology Age, in which our ‘Achilles heel’ is our over-reliance on foreign metals and minerals underpinning 21st Century technology.”

The coronavirus pandemic has placed a magnifying glass on the fact that the U.S. “lost a major battle in a war that it didn’t even realize it was fighting when China over the past decades established monopolies on several critical rare earth elements and a few other strategic minerals.”

According to National Defense Magazine editor-in-chief Stew Magnuson, the tech war has a number of battlefronts, ranging from the control over rare earths (or, more generally speaking, critical mineral resources) over aviation, space technology, biotech, quantum sciences, robotics, and military technology to artificial intelligence. Already down 0:1 over rare earths, he argues that the U.S. runs the risk of going 0:2 when factoring in the battle for 5G dominance, an area where, according to several recent think tank reports, the U.S. is allowing “China to eat its lunch.”

Global Energy Transition Continues to Fuel Demand for Critical Minerals

Covid-19 may have temporarily put public life and global markets on hold, but, the pandemic notwithstanding, the green energy transition marches on — and with that, our skyrocketing materials supply needs for the metals and minerals that underpin renewable technology.

In May of 2020, the World Bank released a landmark report, entitled “The Mineral Intensity of the Clean Energy Transition,” in the context of the global lender’s “Climate-Smart Mining” initiative. The global lender estimates that production of metals and minerals like graphite, lithium and cobalt will have to increase by nearly 500 percent by 2050 to meet global demand for renewable energy technology. To achieve the transition to a below 2°C pathway as outlined by the Paris Agreement, the deployment of wind, solar and geothermal power, as well as energy storage will require more than three billion tons of minerals and metals. Several other institutions, including the International Energy Agency echoed the sentiment of a mineral- intensive green energy future.

As such, reports that the pandemic was disrupting clean energy supply chains only added fuel to the fire, prompting Francis R. Fannon, Assistant Secretary, Bureau of Energy Resources at the U.S. Department of State, to observe that “the world must dramatically increase the extraction, refining and processing of critical energy minerals to meet the world’s ambitious clean technology demand.”

Unprecedented Attention for Supply Chains

The pandemic has drastically increased attention for supply chains. Dictionary publishers have just announced that their choices for “word of the year” in 2020 have fallen on “pandemic” and “quarantine,” but the frequency with which we have heard “supply chain” referenced in the public discourse would make the term a worthy runner-up.

And while, of course, as Dan McGroarty noted in an op-Ed for The Economic Standard earlier this year, “the first word in supply chain is ‘supply’” — underscoring the need to focus on where we source critical materials — COVID has also shed a light on the fact that supply chain vulnerabilities loom along virtually every point of the chain. The make-up of the supply chain for critical minerals may vary from material to material, but the key “link” (it’s a “chain” after all) between supply and manufacturing is refining — or, more bluntly, it’s the processing, stupid.

Unfortunately, but not unsurprisingly, this is another area where China has a leg up on us.

Over the course of the past few decades, by shutting down one smelter and refining facility after another the U.S. has effectively allowed the “hollowing out of its industrial base.”

Meanwhile, pursuing a strategic vision of controlling the entire supply chain, China has invested aggressively in metals and minerals processing, even — and especially — if the country does not develop the material domestically. For many metals and minerals, China has successfully ensured that “that all the trade flow arrows go into China before they make a product.”

As ARPN expert panel member and Benchmark Mineral Intelligence managing director Simon Moores has pointed out, “you don’t need the mass volume of raw materials mined in the U.S. — you can build other links in the supply chain to ensure those arrows point towards your country. To me, that’s the biggest challenge the U.S. has.”

Resource Policy in the Wake of COVID

The Great (Bipartisan) Reshoring

Grappling with these realities, which really are not new, but have been brought to the forefront in recent months, the “Great Reshoring” of critical materials supply chains has begun. After long period of inaction, the U.S. Government seems to be viewing strategic materials and critical minerals issues with a new seriousness — a seriousness that, while emphases will differ, stretches across party lines. During the often bitter and heated presidential campaign season of 2020, both U.S. President Donald Trump and his then-challenger and now-President-elect Joe Biden stressed the importance of “bring[ing] home our critical supply chains and permanently end[ing] our reliance on China,” (Donald Trump) and “bring[ing] Back Critical Supply Chains to America so we aren’t dependent on China or any other country for the production of critical goods in a crisis.” (Joe Biden).

The high stakes and particularly the national security implications of critical mineral resource policy have begun to resonate not just in Washington, DC., and the push for an “all-of-the-above” approach to critical minerals has received new impetus – resulting not only in multiple congressional hearings on the issue, but rather specific policy initiatives.

Specifically, we have seen progress in the following areas:

Legislation:
Aside from long-standing proponents of comprehensive mineral resource policy reform like Sen. Lisa Murkowski (R-Alaska), Sen. Joe Manchin (D, W-Virginia) and Rep. Mark Amodei (R-Nevada), other lawmakers on Capitol Hill took on the issue:

• Sen. Ted Cruz’s (R-Texas) “The Onshoring Rare Earths Act of 2020,” or ORE Act, seeks to reduce U.S. reliance on China for critical minerals. Defined as the 17 rare earths, plus four key minerals underpinning battery technology (lithium, cobalt, graphite and manganese), the ‘Cruz Criticals’ are key to establishing a domestic supply chain. The bill proposes a series of measures aimed at encouraging domestic mineral production, and strengthens existing federal statutes prohibiting rare earth magnet sourcing from China, Russia, Iran and North Korea. Recognizing that mineral production can take many forms, from traditional mining to recycling, reclamation from legacy mines, coal waste and even fracking water, it also sets up a federally-funded pilot program for traditional mining of critical minerals as well as what Cruz terms ‘secondary recovery projects.’ (…)
• House Reps. Lance Gooden (R-Texas) and Vincente Gonzalez (D-Texas) introduced the “Reclaiming American Rare Earths Act or RARE Act,” which is modeled after Sen. Cruz’s ORE Act.

• Reps. Paul A. Gosar (R-Arizona) and Michael Waltz (R-Florida) introduced the “American Critical Mineral Exploration and Innovation Act of 2020” intended to facilitate the availability, development and environmentally responsible production of domestic resources to meet national material or critical mineral needs.

• Sen. Dan Sullivan (R-Alaska) offered two key amendments to the Fiscal Year 2021 National Defense Authorization Act (NDAA) setting forth U.S. policies to achieve ambitious 10-year critical mineral goals and would requiring the Department of Defense (DOD) to produce a study on U.S. defense critical mineral needs.

• Sen. Mark Rubio (R-Florida) introduced the “RE-Coop 21st Century Manufacturing Act,” which would establish “a privately funded, operated, and managed Rare Earth Refinery Cooperative responsible for coordinating the establishment of a fully integrated domestic rare earth value chain to serve U.S. national security interests and restore American competitiveness of critical advanced manufacturing industries.”

Critical Materials Caucus:
In June of this year, U.S. Reps. Eric Swalwell (D- Calif.) and Guy Reschenthaler (R-Penn.) joined forces to launch a bipartisan caucus to “focus on ways to increase domestic production of specialized minerals used to make missiles, cell phones and other high-tech equipment.”

Administration Efforts and New Critical Minerals Executive Order:

• Over the summer of 2020, the Department of Energy (DOE) overhauled its target critical minerals list to include several rare earths and materials considered building blocks of battery tech. DOE has asked for project proposals to develop, in cooperation with its technology hubs, next generation technologies to extract, separate and process ‘key critical materials’: five rare earths — neodymium, praesodymium, dysprosium, terbium, and samarium — as well as cobalt, lithium, manganese, and natural graphite.
• After an initial pause during the onset of the pandemic, efforts to foster cooperative agreements with friendly nations have been re-kindled. The State Department in June announced its hopes to expand the Energy Resource Governance Initiative (ERGI) – an initiative launched last year by the United States and joined by ten other countries, including Canada, Australia and Brazil – aimed at improving supply chain security for the metals and minerals underpinning green energy technology.
• In line with cooperative agreements entered into in 2019, Geoscience Australia, the Geological Survey of Canada, and the United States Geological Survey (USGS) are coordinating their critical mineral mapping and research efforts to create a shared foundation of mineral information to help ensure a safe and secure supply of the materials needed for each country’s economy and security.
• At the White House, three new Executive Orders take aim at strategic materials and critical mineral development:
• - One order, directing an executive branch review to reduce the regulatory burdens under NEPA — the longstanding National Environmental Policy Act — in order to speed infrastructure, energy and mining projects, has triggered threats of legal action that, if successful, could stop the regulatory review even before it begins.
• - While receiving far less media attention, the second Executive Order, delegating Defense Production Act (DPA) Title III emergency authorities to the U.S. Development Finance Corporation, including the authority to underwrite loans to support strategic material production.
• - The third and perhaps most important executive order of the three, E.O. 13953, declared a critical minerals national emergency and instructs the Department of the Interior to explore the application of the Defense Production Act — used earlier in the year to accelerate production of medical supplies in the context of the ongoing coronavirus pandemic — to promote domestic resource production and development.

China’s Response

After an initial hard lockdown, China quickly revved up its engine to move past the coronavirus pandemic. Observers worrying that China would look to exploit the global shutdowns in response to the first wave of COVID-19 were proven right. Beijing was already stretching its “tentacles” across the globe even as the country was shut down and has since looked to solidify its geopolitical position as its relations with the West deteriorated.

The battery arms race is a case in point. Here, Beijing has actively and aggressively built out its EV battery megafactories since the onset of the pandemic —only recently Benchmark Mineral Intelligence listed the following numbers for “planned EV battery plants in 2020”: EU – 2, USA – 3, and China: 38.

On the rare earths front, China’s legislature passed export control legislation to “take countermeasures against any country or region that abuses export-control measures and poses a threat to China’s national security interests,” and effectively allow the “government to ban exports of strategic materials and advanced technology to specific foreign companies” – raising the specter of yet another rare earths ban.

And while China’s ambitious Belt and Road Initiative in the context of which China has been investing hundreds of billions of dollars in Africa and beyond to gain access to mineral riches has suffered a setback, one must assume it will double down on the strategy particularly as relations with the West have been deteriorating.

Harnessing the Materials Science Revolution

If there is a silver lining to be found in the coronavirus pandemic, it’s that it has been unleashing the powers of innovation. The materials science revolution has not only not been slowed — it has delivered amazing promise.

Whether it’s the development of vaccines, rapid tests, new treatment methods or novel materials for personal protective equipment (PPE) at neck-breaking speeds – we’re seeing innovation unfold in front of our very eyes as materials science provides “platform technologies and tools for virus research.”

Courtesy of the materials science revolution, old school mainstay metal Copper recently has garnered a lot of attention due to its antimicrobial properties. We featured several new ideas on how to harness copper’s properties in the fight against coronavirus ranging from the development of copper-infused fabrics to copper-alloyed cell phone cases, and using copper-alloys in high-touch areas in transit, hospital settings and schools, as well as the development of copper-infused paints and coatings.

Critical minerals R&D certainly showed its promise in 2020, and we can expect the materials science revolution to continue to deliver more breakthroughs in the coming months and years.

A Look Beyond 2020

2020 has brought many changes, in our personal lives, in the way we travel or conduct business. It has also brought about political change — which will certainly impact policy making going forward.

We will explore our expectations in this regard and policy recommendations for 2021 in a more comprehensive manner in a forthcoming post.

For now, suffice it to say that regardless of who occupies the White House, the critical minerals challenge is here to stay.

While the Biden/Harris ticket proclaimed its intentions to bring home supply chains during the presidential campaign, priorities will undoubtedly shift come January 2021. Whereas the Trump administration, among other things, placed an emphasis on strengthening and increasing domestic mining, it is reasonable that expect the incoming Biden/Harris administration to greater emphasize leveraging partnerships with allied nations, as well as recycling, and reclamation of new minerals from old mine tailings.

The concept of a circular economy — a system which thrives on sustainability and focuses mainly on refining design production and recycling to ensure that little to no waste results — is not new, but has gained traction in recent years, and — with technological advances and shifting resource supply scenarios — will likely continue to do so under President-elect Joe Biden.

What will not change, is the urgency with which we need to treat the United States’ critical minerals challenge, because, as the coronavirus pandemic has made crystal clear, neither China, nor the rest of the world will wait for us.

The post 2020 – A Watershed Year for Resource Policy appeared first on American Resources Policy Network.

According to London-based Benchmark Mineral Intelligence, whose analysts forecast that at least European 16 plants will be operational by 2030, there have been “some issues with cell producers in Europe struggling to ramp cell production in new facilities to meet demand, but in terms of construction timelines the plants to date have remained on schedule.” 

With the World Bank forecasting that production of metals and minerals like graphite, lithium and cobalt will have to increase by nearly 500 percent by 2050 to meet global demand for renewable energy technology, this development comes as no surprise.  Growing mineral resource pressures in the context of the low-carbon transition are also prompting global miners to shift their traditional focus, as evidenced most recently by Rio Tinto’s decision to invest almost $200 to move to the next development stage of the lithium-borate Jadar project in Serbia.

While China continues to hold the pole position as the world’s largest producer of lithium ion batteries, a continuation of the European gigafactory buildout at the above-referenced pace would put Europe at a total annual production capacity of 446 GWh and place the region in second place.  It would also perpetuate the “bystander status” into which the United States has maneuvered itself in the context of the global battery arms race.

Earlier this year, Benchmark Mineral Intelligence’s managing director and member of the ARPN panel of experts Simon Moores argued that  

“[i]n February 2019, there were 70 battery megafactories in the pipeline of which 46 are in China and 5 in the USA. Today there are 136 of these super-sized electric vehicle battery plants in operation or being planned: 101 in China and 8 in the USA. China is building a battery gigafactory (megafactory) at the rate of one every week; the USA at one every four months. In 2019, China produced 72% of the world’s lithium-ion batteries whereas the USA only 9%.”

Testifying before the U.S. Senate in June of this year, Moores renewed his call for decisive U.S. action by invoking the U.S.’s successful creation of a widespread semiconductor industry in the 1980s:

“The lead that the USA built in semiconductors and computing power due to companies like Fairchild Semiconductor and Intel Corporation has sustained the USA’s dominance in global computing for over 5 decades.

Likewise, those who invest in battery capacity and supply chains today are likely to dominate this industry for generations to come.

It is not too late for the US but action is needed now.”

While U.S. policymakers are increasingly aware of the urgency of our nation’s critical mineral needs — a case in point being the formation of a bipartisan “Critical Materials Caucus” in the U.S. House of Representatives late last month) — political calculations in a watershed election year won’t make it easy for reform-minded lawmakers to chance the status quo. 

However, a look at Europe’s forging ahead with its gigafactory buildout should serve as a reminder that the rest of the world won’t wait for us.

The post Europe Forges Ahead With Battery Gigafactory Buildout As U.S. Still Struggles to Get Off Starting Block appeared first on American Resources Policy Network.

Citing ARPN expert panel member and managing director of Benchmark Mineral Intelligence Simon Moores, who in 2019 testimony before the U.S. Senate Committee on Energy and Natural Resources, which Sen. Murkowski chairs, lamented that the U.S. was so far merely a “bystander” in the “global battery arms race,” Sen.Murkowski wrote:

Invited to comment on Murkowski’s remarks, Moores took to OurEnergyPolicy earlier this week and noted that since his Senate testimony, “the US has fallen further behind in this global battery arms race.

He elaborates: 

Now that the battery megafactories have arrived, Moores says the “focus must turn to building them within the USA and securing the inputs (raw materials) and outputs (recycling) to make this happen.”

The time to end our “bystander” status in the global battery arms race (and beyond, because our over-reliance on foreign metals and minerals does not end with battery tech) is now.  

***

And for a visual introduction to the issue of our nation’s mineral over-reliance on China, check out these two clips by the Clear Energy Alliance. 

The post ARPN Expert Panel Member: U.S. Must Turn to Building Out Critical Mineral Supply Chains Securing Both Inputs and Outputs appeared first on American Resources Policy Network.

The latest case in point:  Rio Tinto’s successful production of lithium carbonate – a key component of electric vehicle battery technology – as part of the reprocessing of waste piles from its long-standing boron mine in southern California.

Part of a unit that produced borates [link to old Boron post], the Boron site is home to at least 80 minerals. The lithium find was part of waste reprocessing in an initial search for gold and other elements at the site.  Efforts now shift to improving quality and lifting volumes, according to Bloomberg.

As Simon Moores, managing director of Benchmark Mineral Intelligence and member of the ARPN panel of issue experts told the U.S. Senate Committee on Energy and Natural Resources earlier this year, “The growth trajectory expected for lithium ion battery raw material demand is unprecedented. Lithium ion batteries are becoming a major global industry and the impact on the four key raw materials of lithium, cobalt, nickel and graphite will be profound.” Outlining theoretical demand scenario from megafactories in the pipeline at 2023 and 2028, Benchmark Mineral Intelligence estimates that lithium demand will increase by over eight times.

The Boron discovery, while in Moores’ view not necessarily a “volume play,” but rather an “IP [intellectual property] play” is significant because in recent years, there has been only one lithium production facility in the U.S. — prompting analysts like Moores to lament that the United States is a “bystander” in the battery arms race.  

Confirming Moores’ analysis, U.S. Senator Lisa Murkowski (R-Alaska) called our nation’s over-reliance on foreign critical minerals our nation’s “Achilles’ heel that serves to empower and enrich other nations, while costing us jobs and international competitiveness.”

The post Lithium: Battery Arms Race Powers R&D Efforts in Quest for Domestic Mineral Resources appeared first on American Resources Policy Network.

Delivering his testimony on the outlook for energy and minerals market in the 116th Congress with a special emphasis on battery technology, Moores, who is also a member of the ARPN panel of issue experts, told senators that as battery megafactories are being built to make lithium ion battery cells “[a]t the beginning of 2019, the US has a minor to non-existent role in most of the key lithium- ion battery raw materials and only has a presence in lithium ion battery manufacturing via Tesla. Tesla and its Gigafactory 1 is emerging to be the most strategic US asset in the EV supply chain.

Providing insightful details and supporting data for the four key battery raw materials lithium, cobalt, nickel and graphite, Moores drives home an important message:

“Those who control these critical raw materials and those who possess the manufacturing and processing know how, will hold the balance of industrial power in the 21st century auto and energy storage industries.”

The writing is on the wall. As Moores previously stated:

“Without low cost, abundant lithium ion batteries & secure supply chains, the US will fall behind in the EV & energy storage revolution.”

This clearly is a scenario U.S. policy makers and other stakeholders will want to avoid, which is why moving forward on mineral resource policy reform is critical.

We know it is much to ask of Washington, where too often, partisan politics override prudent policies. However, as another fellow ARPN expert panel member Jeff Green recently said (while addressing resource policy in the context of the defense industrial base):

“In the new Congress, Democrats and Republicans should seek out opportunities to work together in advancing mutually sought-after goals in this critical policy area.”

The post U.S. Currently Bystander in Global Battery Arms Race, ARPN Expert Tells U.S. Senate Committee appeared first on American Resources Policy Network.

Followers of ARPN will not be surprised to learn that Simon Moores, Benchmark Mineral Intelligence’s Managing director and member of the ARPN panel of issue experts has been asked – once more – to share their insights on the supply chain for EV lithium ion batteries and the energy storage revolution.

Moores considers the fact that the U.S. Senate Energy committee is holding its second hearing in 14 months on the issue progress, stating: 

“The highest level of US government is taking the risks to its future automotive and energy industries seriously. With the rise of electric vehicles (EVs) and the true arrival of battery storage as part of the energy mix, those that have low cost, abundant supply of quality lithium ion batteries will be ahead of the pack.  Right now, China is leading the build out of this lithium ion battery capacity and Benchmark Minerals now forecasts the country to have 68% of global capacity by 2028 while the US presently sits at 11%.

The other key factor in controlling this industry is securing supply chains for lithium, cobalt, nickel and graphite anode materials. This is not just about low cost, high volume mining but key skills and know-how to produce chemically engineered battery grade chemicals – commodities for the 21st century.”

The committee has set the hearing for 10:00 a.m. EST on Tuesday, February 5, 2019, and will offer a livestream on its website, where written testimony will also be made available at the time of the hearing.

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