Last year, we noted that our coverage of the report coincided with Groundhog Day, February 2^nd.  And just like in the Bill Murray classic movie, in which the clock jumps back to the same day all over again every morning, the Critical Mineral movie appeared to bring us back to a situation of ongoing deep dependency on foreign sourced metals and minerals every year – at least in recent memory.

This year, we’re once again back with a look at the report, and, lo and behold, it’s Groundhog Day all over again – and by the looks of it not only with regards to the date, but also in terms of what we’re seeing, especially on one of the most telling charts of the report – the depiction of U.S. Net Import Reliance, or “Blue Wall of Dependency” as we have dubbed it based on the many blue bars showing our significant degree of import dependence.

While there are some changes from last year’s report, the number of metals and minerals for which we are 100% import dependent stayed the same at 15.  The the number of metals and minerals for which we are 50% or more import-dependent has dropped slightly, after having gone up over the year before — with the new report pegging it at 49 versus 51 in 2023 and 47 in 2022.

When cross-referencing the U.S. Net Import Reliance chart with the 2022 Final list of Critical Minerals, the United States was 100% net import reliant for 12, and an additional 29 critical mineral commodities (including 14 Rare Earth lanthanides, which are listed under rare earths) had a net import reliance greater than 50% of apparent consumption — a small drop by two over last year’s report.

Once more, ARPN  can’t help but observe that the trendlines represent a stark contrast to U.S. import reliance for metals and minerals in 1984, when we were 100% import reliant for just 11 mineral commodities.

A few changes for individual metals and minerals included in the report are notable and significant, particularly in the context of the accelerating global green energy transition:

For the Rare Earths, a key group of tech metals underpinning 21st Century technology and the accelerating green energy transition, our import reliance had dropped from 100% in the 2021 report to “greater than 90%” in the 2022 report.  Last year’s report had, this number back up to “greater than 95%” and it remains at the same level in this year’s report, with rare earth concentrate being extracted in the U.S. currently sent to China for separation.  Once again, a single link lacking in a supply chain continues U.S. dependency.

For Lithium, perhaps the most frequently cited battery tech mineral, and Cobalt, another one of Lithium’s “battery critical” peers, U.S. import reliance stayed the same at “greater than 25%” for lithium, while Cobalt’s number dropped from 76% to 69%.

For Graphite and Manganese, both battery criticals – the USGS report shows both still pegged at an unchanged 100% import reliance, unchanged from last year.

For Nickel, the final battery critical and a new element on the 2022 Critical Mineral List, import-reliance saw a small jump from 56% last year to 57% in this year’s report, after a more significant jump the year before (from 48% to 56%).

Import reliance for Platinum represents one of the biggest changes over last year’s report, which had the metal pegged at 66%. That number increased to 84 percent in the 2024 report.

Another change worth mentioning is the upward trajectory for Copper import reliance. In the 2010s, import reliance for Copper hovered around 30 to 35 percent, but in recent years, that number has gone up.  This year’s report has it pegged at 46%, up from 41% in the 2023 report.  This development that may be of particular relevance as in 2024, the U.S. Government Critical Minerals List is up for another update, on the 3-year timetable codified in federal law, and in spite of the metal’s inarguable growing importance in the context of decarbonization efforts and expert warnings that there may not be enough copper to meet decarbonization goals in the next few decades, the material has to date been left off the whole-of-government list. Congressional efforts to change this may have not succeeded in 2023, but the Department of Energy designated the material a critical material as part of its 2023 Critical Materials Assessment, further raising the material’s clout.

As in previous iterations of the report, China continues to be the elephant in the data room. And against all pledges in recent years for the United States to reduce import reliance on supplies from China, the 2023 Mineral Commodity Summaries lists China 24 times as one of the major import sources of metals and minerals for which our net import reliance is 50% or greater (which is down by one over last year) – and for all the talk about decoupling supply chains from China and against the backdrop of the escalating trade and tech wars between Beijing and Washington (see our coverage here), this continues to be a concern.

Like last year’s report, this year’s Mineral Commodity Summaries report features an expanded chapter on developments in the critical minerals realm, identifying trend lines, and supply chain security and U.S. government critical minerals initiatives as well as critical mineral investments.

Last year we noted that “while the urgency of the need to secure critical mineral supply chains has registered with stakeholders over the past few years, USGS’s findings underscore once more that supply chains in the 21st Century are extremely complex and meaningful change takes time – and the developments of 2022 ranging from increased resource nationalism in the Southern hemisphere over war in Ukraine to rising geopolitical tensions have not made untangling supply chains any easier.”

Since then, the stakes have only gotten higher as geopolitical tensions continue to rise and U.S.-Chinese relations appear to sour, but ARPN’s basic assessment of the situation stays the same.

So, with the report revealing more of the same, and in true Groundhog Day fashion, we revisit last year’s post, in which we stated:

“In Bill Murray’s movie, it took the protagonist several years to realize how to change behavior to break the cycle.  We know by now that to break our cycle of resource dependence, it will take a comprehensive ‘all of the above’ approach to critical mineral resource policy – and stakeholders have come to realize this and have increasingly embraced the concept.  We continue to stand by what ARPN’s Dan McGroarty stated during a congressional hearing in 2019 – ‘we can’t admire the problem anymore. We don’t have the luxury of time.’

If we act swiftly and comprehensively, there may just be a chance that we will wake up twelve months from now not to another Groundhog Day, but to a 2024 Mineral Commodity Summaries that paints a picture of reduced resource dependence.”

2024’s report was not the one to paint that picture, but in light of recent policy developments (see our recap of 2023 here and refer to page 18 – 22 of the report), there is still hope we will be getting closer by the time next year’s Groundhog Day rolls around.  Meanwhile, with apologies to Punxsutawney Phil’s cheery forecast of an early spring, ARPN is projecting another long winter ahead of Critical Mineral foreign dependency.

The post Groundhog Day All Over Again in Spite of Rising Pressures? USGS Releases Annual Mineral Commodity Summaries Report appeared first on American Resources Policy Network.

Against ever-surging demand scenarios, important progress to strengthen U.S. critical mineral supply chains has been made over the course of the past few years.

However, Peter Cook and Seaver Wang, analysts with the Breakthrough Institute, argue in a new piece that more could be accomplished through separate regulatory framework for this new class of minerals, which would allow for the coherent organization of “individual policies over the long term at scales commensurate with national progress toward a new technological age.”

They argue that because “existing processes do not manage critical minerals apart from other types of mining”policymakers are currently left with “piecemeal actions, like project grants and mapping campaigns.”Meanwhile, “continuing to treat all hardrock mining as a single inseparable bucket may encourage ineffective and unnecessarily broad, industrywide reforms.”

In their piece, Cook and Wang recommend the creation of a regulatory “infrastructure that systematically distinguishes critical minerals management from other hardrock mining, which policymakers can amend or augment as national needs evolve.”  This would, they argue, appeal to labor and industry stakeholders because it would allow for targeted support within the advanced technology sector rather than watered-down broad-based actions across the entire hardrock mining sector.

Ultimately, they say,

“a separate statutory classification and regulatory framework for critical minerals could confer numerous benefits, enabling more efficient proactive review of new mining areas without altering existing strong environmental standards, facilitating direct allocation of funding and staff toward critical mineral project permitting efforts, and allowing policymakers to design policies and regulatory changes that appropriately affect critical and non-critical mineral projects differently.”

They conclude:

“As the mineral commodity industry has evolved over the last 150 years, U.S. policy has adapted to produce our now-familiar separate locatable, leasable, and saleable frameworks. As the country’s economic, political, security, and environmental priorities have shifted over this period, so too have the ways in which the federal government oversees domestic natural resource development.  

This history of the evolution of the existing classifications provides both a template and precedent for modifying these definitions further, as the nation’s needs continue to change. As the United States prioritizes future competitiveness in numerous energy, computing, and other advanced technologies and seeks to revitalize long-neglected domestic supply chains, a new chapter in mineral resource classification seems both timely and appropriate.” 

Food for thought for policy stakeholders looking to strengthen U.S. supply chains as critical mineral demand scenarios continue to soar against the background of heightened geopolitical tensions, and the presidential race in the United States begins to heat up.

The post Food for Thought: More Effective Critical Mineral Resource Policy via a Separate Regulatory Framework? appeared first on American Resources Policy Network.

Somewhat lost in the shuffle of work parties, family gatherings and holiday shopping was the Chinese government’s announcement on December 21 that it would ban the export of technology to make rare earth magnets, adding to a ban already in place on extraction and separation technologies for REEs.

In what Reuters calls an “escalating battle with the West over control of critical minerals,” Beijing significantly tightened rules guiding exports of several metals in 2023. (see ARPN’s reprise post of 2023’s main events in the critical minerals realm for more on China’s tightening of the export control ratchet).

Don Swartz, CEO of American Rare Earths, a company currently developing a REE mine and processing facility in Wyoming, sees China’s move, which follows a November 2023 directive from the Chinese government to REE exporters to report transaction details, as a clear sign that “China is driven to maintain its market dominance,” with Swartz adding that “[t]his is now a race.”

Meanwhile, for all the tit for tat in the grander scheme of the Tech Wars and a flurry of activity on the resource policy front, the West has struggled to effectively decouple its critical mineral supply chains from China.

In the case of rare earths, China, which still accounts for nearly 90% of global refined output, controls the refinement process, and area that has Western REE companies struggling because of “technical complexities and pollution concerns” in the solvent extraction process, as Reuters points out.

Nonetheless, experts believe the latest announcement should be “a clarion call that dependence on China in any part of the value chain is not sustainable.” 

The West may have kicked off the new year already, but Chinese New Year is still upon us. 2023, the Lunar Year of the Rabbit, was supposed to bring us “relaxation, fluidity, quietness and contemplation.”  What we got, was an escalation of the Tech Wars, more resource nationalism and more geopolitical instability.  At the same time, these developments also served as catalysts kicking efforts to strengthen domestic supply chains into high gear.

With 2024 moving us into the Lunar Year of the Dragon, the overall energy of which is said to be “vital and competitive,” we may be in for a tumultuous ride.

Read ARPN’s Year in Review – A Look at 2023 Through the Prism of Critical Mineral Resource Policy here. 

The post New Year, New Round of Tech Wars Escalation? appeared first on American Resources Policy Network.

– A Look at 2023
Through the Prism of Critical Mineral Resource Policy - 

In the waning days of December 2022, ARPN and others were gearing up for a watershed year in the critical minerals realm – a year which could be a “breaking point if there is to be an EV revolution/transformation,” and one that would give us a glimpse into the new world order in the Post Petro Age in which the sands of geopolitics have shifted.

We set out to track the following themes, all of which we found to be intertwined:

• A focus on the Super Criticals (see our Year in Review post for more info);
• the growing importance of geopolitics, with China taking center stage and alliances and partnerships continuing to be forged to reduce reliance on Beijing;
• the acceleration of the green energy transition which will require vast amounts of critical minerals;
• as well as industry’s efforts to sustainably green our future by harnessing the materials science revolution.

As we close out 2023 with ARPN’s annual attempt to take stock of what has happened on the critical mineral resources front in the past 12 months — to assess where we are, and, filled with hope for a New Year, where we are headed – we believe we picked the right themes.

2023 – Enter the Post-Petro Tech Age?

Early 2023

Geopolitics certainly took center stage on the critical minerals front with the Russia/Ukraine war continuing to place a strain on global supply chains and resource nationalism gaining a bigger foothold in particularly the Southern hemisphere.

As Peter Schechter and Juan Cortiñas had outlined in a February 2022 piece for Marsh McLennan’s Brink News ARPN featured at the time, the shunning of laissez-faire economics, particularly in Latin America, is not new. “What’s different this time,” they say, “is that these new interventionist policies are not only focused on the traditional energy sector. Instead, the region’s attention is turning to increasingly valuable minerals that are key to the new green economy quickly gaining momentum across the world.”  

Resource Nationalism 

In early 2023, we saw this trend play out in Chile, where President Gabriel Boric announced his plan to nationalize the country’s lithium industry to boost the Latin American nation’s industrial base and protect the environment.  While his plan fell short of full nationalization, observers called Boric’s announcement a “shock move”  – but it was one that tied into an overall trend in the region:

Chile’s move came on the heels of a comprehensive lithium nationalization plan enacted by Mexico which culminated in President Andres Manuel Lopez Obrador signing a decree handing over responsibility for lithium reserves to the country’s energy ministry in February of this year.

Bolivia’s ruling socialists have also favored state control over the nation’s vast untapped mineral resources but are relying on Chinese partners to harness them.

Meanwhile, some speculated at the time that had it not been for his ouster, Peru’s President Pedro Castillo, who won a narrow victory in 2021 and had initially pledged to nationalize much of the country’s mining sector, might have pursued an approach similar to Boric’s in Chile.

The moves tied into a bigger trend, as indicated by prior similar developments in Indonesia, Myanmar and Zimbabwe.

 Tech War Theaters – Semiconductors and Critical Minerals 

Meanwhile, the Tech Wars between China and the West continued to intensify, and Western nations began taking steps to counter Chinese dominance in the critical minerals realm.

A key theater of the Tech Wars had emerged: Semiconductors, which have become indispensable components for a broad range of electronic devices. Semiconductors have been dubbed the “DNA of technology” which has “transformed essentially all segments of the economy” and are critical to national security where they enable the “development and fielding of advanced weapons systems and control toe operation of the nation’s critical infrastructure,” as the Department of Commerce-led chapter in the Biden Administration’s 100 Day Supply Chain Review report outlines.

While the U.S. took steps to impose new export controls to China’s access to advanced computing chips, its ability to develop and maintain super computers and manufacture semiconductors in 2022, Washington’s allies in Europe, Japan, Canada, Australia also took steps to reduce Chinese influence in their critical mineral industries. The governments of the Netherlands and Japan announced their intention to emulate the U.S. export controls in March.

A late 2022 proposal to bolster the Investment Canada Act (ICA) to empower government ministers to block or unwind critical mineral investments if these are considered as a threat to national security, considered a defensive measure against China which has invested $7 billion in Canada’s base metals sector in the past two decades, was expected to be finalized in the spring.

Australia’s Treasurer Jim Chalmers in early 2022 blocked a request by a Chinese company to boost its investment in Australian REE company Northern Minerals via a prevention order, the first move of this kind since the Treasurer had expressed concerns over the “concentrated nature of the China-dominated critical minerals supply chain” elevated by the Russia-Ukraine war, and a move that some considered a “sign of what’s to come.”

West Bolsters Domestic Supply Chains 

While these steps were taken to reduce Chinese influence over domestic industries, the West also stepped up efforts to strengthen its own critical mineral policies and sectors.

The European Union released its long-awaited action plan to “ensure the EU’s access to a secure, diversified, affordable and sustainable supply of critical raw materials” on March 16. The Critical Raw Materials Act (CRMA)  includes a comprehensive set of actions aimed at shoring up European critical mineral supply chains by streamlining the permitting process for raw materials projects and allowing for selected “Strategic Projects” to benefit from support for access to financing and shorter permitting timelines (24 months for extraction permits and 12 months for processing and recycling permits).  The Act – which was finalized later in the year, also requires EU member states to develop national programs for resource exploration.

Australia also forged ahead with its push to strengthen critical mineral supply chains for its own industries and for the benefit of its partners with the federal government in Canberra releasing guidelines for “new grants to help develop Australia’s critical minerals sector, support downstream processing, create jobs across regional Australia and support global efforts to achieve net-zero” in early 2023.

The Canadian government, which had launched the Canadian Critical Minerals Strategy in December of 2022 backed by up to $3.8 billion in funding, announced details on the implementation and a first round of funding for new critical minerals programs and initiatives.

The Minerals Security Partnership (MSP), an initiative to bolster critical mineral supply chains while ensuring that “critical minerals are produced, processed and recycled in a manner that supports the ability of countries to realize the full economic development benefit of their geological endowments”  took its collaboration to the next level by formalizing and agreeing on guiding principles for how the MSP will develop projects around the world with local value-add, sustainability, and high environmental, social, and governance (ESG) standards front and center. Meetings were followed by bilateral trade agreements as well as U.S.-EU discussions to launch a “critical minerals club.”

And stateside, U.S. President Joe Biden once more invoked Title III of the Defense Production Act (DPA) to strengthen critical mineral supply chains – and in doing so, effectively created a new category of Critical Materials – which ARPN has dubbed the Defense Criticals (see our post here). His February 27, 2023 Presidential Determination was followed by another DPA Presidential Determination (2023-5), designating airbreathing engines, advanced avionics navigation and guidance systems, and hypersonic systems and their “constituent materials” as priority DPA materials.

Mid 2023

We posited in early 2023, that against the backdrop of surging demand and geopolitical volatility, we could expect to see more active government involvement in the critical minerals sector – and the coming months certainly delivered.

China Tightens Export Ratches as West Gets Reality Check on Decoupling

In July, China upped the ante in the Tech Wars by placing export restrictions on gallium and germanium – key components of semiconductor, defense and solar technologies. Beijing’s move was considered a “show of force ahead of economic talks between two rivals that increasingly set trade rules to achieve technological dominance,” according to the Wall Street Journal. As Alastair Neill, board member of the Critical Minerals Institute, told the Wall Street Journal: “If you don’t send high-end chips to China, China will respond by not sending you the high-performance elements you need for those chips.” 

While some chipmakers downplayed fears of shortages, former Chinese Vice Commerce Minister Wei Jianguo’s comments to the China Daily newspaper “that countries should brace for more should they continue to pressure China, describing the controls as a ‘well-thought-out heavy punch’ and ‘just a start,’”  prompted fears that more export curbs on critical materials, including on rare earths could be on the menu, and analysts called for  big investments on the part of the United States and its partners to reduce their reliance on China.

Later that month, China announced a new set of export controls — this one on certain drones and drone-related equipment — to “safeguard national security interests,” only to follow it up with restrictions on graphite later in October. The decision to require export permits for certain graphite products was seen by analysts as a play “to control supplies of critical minerals in response to challenges over its global manufacturing dominance.”

China’s moves also underscored the massive challenge of decoupling for Western nations.  In the case of graphite, which is the largest component by volume and mass in EV batteries and has been deemed the “unsung player” in the battery supply chain, China “is on track to retain over 85% of the global anode market share by the end of the decade,” according to Benchmark Mineral Intelligence.

While momentum to decouple was continuing to build, a new report by the consultancy Rhodium Group and the German Mercator Institute for China Studies (MERICS) pointed to the real-world challenges of decoupling from China from a European perspective:

European national governments and the EU may have worked to devise policies to strengthen domestic and regional critical mineral supply chains, but Chinese companies continued to invest in the region: Overall, Chinese foreign direct investment in the EU and the UK dropped, but, as Mary Hui writes for Quartz, “for the first time since 2008, the value of Chinese greenfield investments have exceeded that of M&A flows,” and was “mainly driven by several large-scale initiatives by Chinese battery giants to build factories in Germany, Hungary, the UK, and France.”

As the Rhodium report determined, “Europe has become a key part of China’s global electric vehicle expansions,” adding that “[b]attery investments are now the mainstay of Chinese investment in Europe.” The emerging conundrum is not lost on EU policy makers, who resolved to formally “recalibrate” the EU’s China policy, with an emphasis on “de-risking” by screening investments more closely and resorting to more robust export controls.

The West’s resolve to break China’s dominance may be building, but as Christina Lu wrote for Foreign Policy:

“(…) there are more questions than answers about how these efforts will pan out. As lawmakers continue to hammer out new agreements behind closed doors, it remains unclear how they align with global trading rules and what this momentum means for countries that lack free trade agreements with the United States. Engineering supply chains isn’t as simple as finding new mines, either; it involves an entire ecosystem of processing, refining, and manufacturing capabilities.”

The Rise of Geopolitical Swing States

As the West continued to assess its options against the backdrop of an increasingly assertive China leveraging its advantage in the Tech Wars, a new class of states have entered the spotlight in the context of the global geopolitical realignment – the “geopolitical swing states,” as Goldman Sachs’s Jared Cohen suggested this June, and their role could grow exponentially in the coming years.

Cohen defines a geopolitical swing state as “critical to the world economy and balance of power” but without “the capacity by themselves to drive the global agenda, at least for now.” He adds that “as long as the tensions between the U.S. and China continue to get worse, they will have outsized abilities to navigate geopolitical competition and take advantage of and influence it.” 

According to Cohen, there are four – often overlapping — categories of geopolitical swing states:

• Countries with a competitive advantage in a critical aspect of global supply chains;
• Countries with a unique ability to make themselves attractive for nearshoring, offshoring, or friend-shoring;
• Countries with a disproportionate amount of capital and willingness to deploy it around the world in pursuit of strategic objectives; and
• Countries with developed economies and leaders who have global visions that they pursue within certain constraints.

As Cohen concluded, “[t]he rise of geopolitical swing states may balance the great powers and help stabilize the global order. Their interest-based decision-making could be a source of consistency in uncertain times. Or their newfound prominence may increase global instability by putting more actors and variables in play. But even if today’s world is not yet multipolar, a rising group of countries recognize that they can determine the course of world events. Those geopolitical swing states are aware that their power may be unsustainable, or event fleeting and they are determined to take advantage of the current window of opportunity.”

While the rise of the geopolitical swing states has business implications for multinational businesses and investors, these trendlines are have real-world implications for U.S. stakeholders from a policy perspective, and, in the critical mineral resource realm, underscore the importance of a comprehensive all-of-the-above approach to securing critical mineral resource supply chains.

Fall/Winter 2023 

Critical Mineral Focus Grows, New Players Emerge

Meanwhile, real world challenges associated with securing supplies for the metals and minerals underpinning 21st Century technology prompted more countries to emphasize supply chain security and define their own sets of metals and minerals critical to their own domestic industries.

Perhaps most consequential in light of the fact that it has overtaken China as the most populous country in the world this year, may be India’s push onto the global critical minerals stage.  Following the release of a comprehensive Critical Minerals List, consisting of 30 metals and minerals deemed critical for India’s ambition for cleaner technologies in electronics, telecommunications, transport and defense, in the summer, along with a pledge to encourage public and private investment in exploration, mining and processing to secure the country’s critical mineral supply chains, India announced its consideration of an export ban on four key metals – lithium, beryllium, niobium and tantalum – in a move to ensure the country’s self-sufficiency in crucial minerals for India’s national security and technological advancements. In late November, the Indian government announced its first ever auction of critical mineral leases for commercial mining by the private sector.

But another player has arrived – perhaps in another indication that we have indeed entered the Post-Petro Tech Metals Age: Saudi Arabia.

As part of his Grand Vision 2030 plan to transform the Saudi economy, the oil giant’s Crown Prince Mohammad bin Salman is preparing to invest billions of dollars into the mining sector to harness the potential of more than $1.3 trillion worth of metals and minerals the Saudi government claims are buried in the kingdom, and effectively make mining the so-called “third pillar” of the economy next to oil and gas. Rumors of a deal with Tesla have been swirling, even though they have been denied by Elon Musk himself.

Analysts say that while the crown prince’s plans are met with plenty of skepticism, even if only partially successful, implications of Saudi Arabia turning into a metals hub could have far-reaching implications not just for metals mining, but geopolitics and trade, especially if the other component of the crown prince’s plan to buy up resources from elsewhere to be refined and processed at new facilities in Saudi Arabia.

As Bloomberg reports, the kingdom’s long game is to position itself as an alternative supplier to China for the metals and minerals underpinning the green energy shift and 21st Century technologies.  The news outlet cites Khalid Al Mudaifer, vice minister of mining affairs, who said in an interview that “Saudi Arabia needs more than one engine to achieve its vision,” and that to transform itself into an economic and industrial powerhouse, the kingdom needs minerals.

Global Tensions Mount – Gaza and Tech War Confrontation

If the watershed moment for geopolitics in 2022 was the Russian invasion of Ukraine, this year’s defining moment was probably the Hamas-led incursion from the Gaza Strip into the Gaza envelope of neighboring Israeli territory on October 7, 2023, which initiated the ongoing Israel-Hamas War. Throwing a wrench into arguably efforts to de-escalate tensions in the Middle East, the conflict threatens domestic stability in many states in the region and has exposed the deep-rooted nature of obstacles to normalization.

While China has claimed neutrality and has called on both sides to exercise restraint, China, while criticizing Israel’s massive bombardment of Gaza in response to the incursion, but never officially condemned the initial attack started by Hamas. Experts believe that the Israel-Hamas war is viewed in Beijing as a convenient opportunity to gain ground against the United States in the battle for influence in the Arab world, as tensions between China and the West, and specifically the U.S. continue to mount. 

As Hot Wars Rage, All Arrows Point to Escalation of Tech War 

 With hot wars raging in Central Europe and the Middle East, the question is, do we have bandwidth to focus on a war that’s metaphorical – for now, at least:  The Tech War pitting China versus the U.S.?

While the recent meeting between U.S. President Joe Biden and his Chinese counterpart Xi Jinping on the sidelines of the APEC summit in San Francisco last month was seen by some as a step towards alleviating tension between the two global powers, U.S. Secretary of Commerce Gina Raimondo’s latest speech and subsequent comments at the Reagan National Defense Forum in California left no doubt that, at least on the trade front, all arrows very much point to confrontation.

The Secretary did not mince words, stating: “(…) make no mistake about it, China’s not our friend, and we need to be eyes wide open about the extent of that threat. I am ready to win, and I’m ready to do that with all of you, but it’s time to open our aperture and challenge the way we’ve done business in every way if we’re going to meet the threat China poses.”

When asked if there were other U.S. origin products or types of technologies that the U.S. Government was “looking at in a similar fashion right now” – i.e. would consider imposing export controls on, she said:

“Absolutely, in biotechnology, AI models, AI products, cloud computing, supercomputing. So short answer is yes.”

Unsurprisingly, China has already voiced criticism of Raimondo’s comments with officials lamenting the “Cold War mentality” on the part of the U.S. which showed its “desire for hegemony.”

Diplomatic efforts to improve ties between the countries in the wake of Raimondo’s remarks may continue but to the keen observer it appears all but certain at this point that we’ll be seeing a further escalation of the Tech Wars in the coming months, with the export control ratchet playing a central role.

The question is, which critical mineral will find itself in the crosshairs this time. 

Turning the Same Stone Twice

With more confrontation on the horizon, there are some silver linings, thankfully.  Not only are domestic policy stakeholders more attuned to the critical minerals challenge and are working on policy solutions including permitting reform, the mining industry itself has been stepping up its game.

In their quest to secure critical mineral supply chains against the backdrop of surging demand and rising geopolitical pressures, stakeholders are leaving no stone unturned – quite literally — and have in fact begun turning the same stone twice, harnessing the materials science revolution to unlock minerals that were previously bound up, and extracting minerals from unconventional sources such as rock piles and tailings.

In 2023, ARPN featured several of these initiatives:

• The “Atlas of Australian Mine Waste”, an Australian government mapping project of sites containing mine waste with reprocessing potential,
• The USGS’s solicitation for proposals for FY2023 grants to collect data on mine waste using funds from the Bipartisan Infrastructure Act in the context of the Earth Mapping Resources Initiative (Earth MRI), in the context of which more than $5.8 million will go towards mapping critical-mineral resources in Alaska in partnership with the Alaska Division of Geological & Geophysical Surveys. Minerals included in the context of USGS and the Alaska Division of Geological & Geophysical Survey research projects Alaska are: Arsenic, antimony, bismuth, cobalt, graphite, indium, platinum group metals, rare earth elements, tantalum, tellurium and tin.
• Australia-based New Century Resources current operation of the largest tailings retreatment operation at its zinc tailings retreatment operation in Queensland,
• A Reuters lists of six major projects outside of China aimed at extracting the critical minerals from waste or byproducts, including Iluka Resources Ltd’s and VHM Ltd’s operations in Australia, Rainbow Rare Earths Ltd’s endeavor in northeast South Africa, Swedish state-owned LKAB’s plans to extract REEs from two existing mines, and two U.S. operations:

• Phoenix Tailings, a privately held U.S. company plans to launch operations using waste materials from a former iron ore mine in New York using its own processing technology.

• U.S. Energy Fuels, originally focused on uranium production, started acquiring monazite, a byproduct of mineral sands, to extract REEs with plans to open its own separation plant by 2024.

• Global miner Rio Tinto’s production of tellurium at its Kennecott copper operation in Utah, where roughly 20 tons of the material are generated from by-product streams generated during the copper refining process; and the company’s partnership with CR Minerals Co. LLC to extract a material called pozzolans from Rio Tinto’s Boron California operations, which can be substituted for or combined with cement to decarbonization construction materials. Meanwhile, in Canada, the miner is producing scandium from titanium waste, becoming the first North American producer of scandium in the process.
• The October 2023 Fortune Minerals/Rio Tinto announcement of a collaboration to develop technology to improve the recovery of cobalt and bismuth from co-product streams of minerals recovered at Rio Tinto’s Kennecott smelter in Utah which will be processed at Fortune Minerals’s smelter operations.

As the materials science revolution marches on and continues to unlock new technologies allowing for the safe and commercially viable recovery of mine waste tailings, harnessing this – to date largely untapped — potential could play a significant role in a comprehensive “all-of-the-above” approach to bolstering critical mineral supply chains.

U.S. Supply Chain Initiative, Plan to Release National Defense Industrial Strategy

On the policy front, the Biden Administration recently announced new steps to bolster supply chains for U.S. domestic industries. One highly anticipated component with implications for the critical minerals sector is the Department of Defense’s release of a first ever National Defense Industrial Strategy (NDIS), which, according to the White House, “will guide engagement, policy development, and investment in the defense industrial base over the next three to five years.”

2023 – Metals in Focus

From Battery Criticals to Defense Criticals, and Copper’s Rising Star

In keeping with last year’s trend lines, ARPN-dubbed Battery Criticals – Lithium, Cobalt, Graphite, Nickel and Manganese – continued to dominate the critical minerals discourse (along with the Rare Earths) against the backdrop of surging needs of the green energy transition.

See our coverage of these materials here.

As previously outlined, however, President Biden’s invocation of Title III of the DPA effectively created a new category of Critical Materials – which ARPN has dubbed the Defense Criticals – a whopping list of 35:

See our post with more context here.  

Meanwhile, one mainstay metal’s star has continued to rise in 2023 – Copper. 

Copper prices may have dropped, however demand for the metal, which is not only a key mainstay metal, but also an indispensable component in green energy technology, is expected to increase drastically to keep pace with the material requirements of the global push towards net zero carbon emissions.

According to the Financial Times, its growing application in this field will result “in it being dubbed the ‘metal of electrification’, with forecasts that it will double to a 50mn tonne market by 2035 compared with 2021 levels, according to S&P Global, which predicts a ‘chronic gap’ between supply and demand.”

While U.S. import reliance for copper hovered around 30 to 35 percent in the 2010s, that number has gone up to more than 40 percent in the 2020s, according to the USGS Mineral Commodity Summaries. 

Miners are pointing out that a confluence of complex permitting timelines, rising inflation and the fact that the commodity is “harder to find in high quantities in the ground” may have led to a situation “where it’s likely there won’t be enough copper to meet decarbonization goals in the next few decades.”

While Copper is a key component of technology in the context of decarbonization efforts, the material was left off the overall U.S. government’s critical minerals list. Congressional efforts to change this may have not succeeded in 2023, but the Department of Energy designated the material a critical material as part of its 2023 Critical Materials Assessment, further raising the material’s clout.

Meanwhile, on December 16, 2023, the Australian government released an update to its list of critical minerals deemed essential to the nation’s energy and security requirements, and also released a new Strategic Materials List of commodities with plans to scope the creation of Strategic Critical Minerals Hubs around the country.   Bearing testimony to the material’s strategic and economic value, Copper made the Australian Government’s Strategic Materials list (along with nickel, aluminum, phosphorus, tin and zinc), a list that identifies commodities which, while not currently considered at risk of supply chain disruption, are essential for the energy transition and the Australian government “will continue supporting the extraction and processing of these minerals and monitoring their market developments.”

It remains to be seen whether the Australian developments will provide a further boost to U.S. domestic efforts to afford copper Critical Mineral status, but it is clear that with or without government action, the material’s star is not going to fade anytime soon.

Conclusion

Time may tell whether 2023 was in fact a watershed year in the critical minerals realm. It appears that we have indeed entered to Post-Petro Tech Age, and it was certainly a year in which tensions between two key global players – the U.S. and China – have reached new heights. Whether or not China overplays its hand in the long run is almost beside the point, as, in the short- to medium term its chokehold in the sector is strong, and we know that the country does not shy away from confrontation.   To not fall behind in the Tech War, decoupling the West’s critical mineral supply chains from China must be the name of the game.

As the West continues this quest, a wary realization appears to have emerged — that the need to coordinate Critical Mineral policy coexists with the growing awareness that even increased supply of essential metals and minerals may not keep pace with rising demand.

How the U.S. and its allies navigate this new resource relationship – multiplied across several score of Critical Minerals – may be one of the principal commercial, diplomatic and national security challenges of this century, and will be a guiding question for 2024.

The post ARPN’s Year in Review – 2023 appeared first on American Resources Policy Network.

The expectation is that with the proposed EPA rules requiring automakers to reduce carbon emissions by 56% in their 2032 models compared to 2026 models in place, 67% of new light-duty car purchase will need to be electric by 3032.

The so-called battery criticals – nickel, lithium, graphite, cobalt and manganese – hold the key to this development, but the push to secure their supply chains is, as followers of ARPN well know, fraught with challenges.

A case in point is nickel.

While a “relatively benign supply profile” kept nickel off the U.S. Government’s first List of Critical Minerals in 2018, the metal’s increased usage in EV batteries, and the USGS’s expanded criticality criteria to include materials with only a single domestic producer along their raw materials supply chains – identified as having a single point of failure – led to nickel’s incorporation into the 2021 update to the U.S. Government Critical Minerals List.

With the underground Eagle Mine in Michigan – currently the only U.S. primary nickel mine in operation – near the end of its lifecycle, stakeholders look to Michigan’s near-neighbor Minnesota, home to the Tamarack Nickel Project in Central Minnesota which is expected to start the environmental review process this year, the proposed Twin Metals underground mine which has been embroiled in an ongoing legal and regulatory battle over the years, and the PolyMet Mine in Northeastern Minnesota.

See ARPN’s recent post entitled “Critical in Spite of ‘Relatively Benign Supply Profile?’ A Look at Nickel” for more.

Earlier this week, as the House Committee on Natural Resources Subcommittee on Energy and Mineral Resources held an oversight field hearing “Examining the Mineral wealth of Northern Minnesota,” AXIOS Pro (subscription only) zeroed in on the congressional politics on the push to bolster the U.S. supply chain for the battery critical, pointing to the fact that “both Republicans and Democrats are pressing the Pentagon to use the Defense Production Act (…) to boost domestic nickel output” according to letters obtained by Axios.

As Axios’s Jael Holzman writes, the letters build off Biden’s 2022 DPA invocation to “liberate wartime authorities and funding U.S. minerals projects in a bid to unshackle the nation from foreign metals,” and the Defense Department replied to one of the letters stating that “the Department is actively engaging with companies across the United States and our allies to secure our critical mineral supply chains using DPA funds, including for nickel.”  

While recent headlines talk of a nickel glut considering Indonesia’s booming nickel output, these narratives must be taken with a grain of salt with the specter of resource nationalism and potential cartelization on the rise.  News from Moscow and Kiev indicate that and end to the war between Russia (a key global nickel player) and Ukraine is nowhere to be seen, and U.S. relations with China are deteriorating.  Faced with ever-growing geopolitical volatility, working with our allies, as per the DOD response to the congressional letters, to strengthen supply chain is an important piece of the “all-of-the-above” puzzle, but it is no panacea.

As ARPN has consistently argued, for the U.S. to achieve the lofty – and now even loftier – goals of net carbon neutrality we must embrace “a push to secure critical mineral supply chains from ‘soup to nuts’ to borrow a term used by Energy Secretary Jennifer Granholm. That means ‘all of the above,’ including domestic production and processing of metals and minerals like nickel.”

Clearly, the State of Minnesota has potential.  However, as Natural Resources Committee Chairman Rep. Pete Stauber (R-MN) said after the subcommittee field hearing:

“[I]f we’re going to unlock the full potential of our resources and secure our domestic mineral supply chains, we need the political will to implement permitting reform.”

With consensus on the need to secure critical mineral supply chains mounting on both sides of the political aisle, here’s hoping the political will to make tough choices and overcome the perennial “not-in-my-backyard” sentiment will follow suit.

The post Tackling the “Single Point of Failure” – Inside the Push to Bolster the U.S. Domestic Nickel Supply Chain appeared first on American Resources Policy Network.

While this significant shift to export controls – according to the WSJ mostly in the form of taxes – has been noticeable and relevant, it may just have been the tip of the iceberg.

In the wake of a global pandemic, related supply chain shocks and with the Russia-Ukraine war raging on, the trade dimension of geopolitics has become the new frontier in the tech wars between Beijing and Washington, DC – a relationship in which conflict has been smoldering over the past few years, especially over Rare Earth Elements (REEs).

As we outlined in a recent post, Western nations have made decoupling from China – which has long held a strategic stranglehold over Critical Mineral supply chains – a priority and have pursued a strategy of “friendshoring.”

Observers were waiting to see if China would retaliate in response to the United States’ recently imposed set of sweeping controls on advanced semiconductors and semiconductor manufacturing equipment aimed at China and a related agreement with Japan and the Netherlands.

It may not prove to be a long wait.  According to Nikkei reporting earlier this month, China has since announced that it is considering prohibiting exports of certain rare earth magnet technology through updates to a technology export restrictions list last issued in 2020.

The looming export control ratchet and increasing tensions between China and the West are troubling South Korea – which has in the past walked a fine line between the United States and China – its “leading economic partner and increasingly dominant neighbor” – and has publicly balked at the U.S. effort to isolate China from semiconductor supply chains.

Regardless of that fine line, public opinion towards China has been souring in South Korea, and diplomatic relations with the country are also getting tense as Seoul summoned China’s ambassador to protest Beijing’s criticism of remarks made by President Yoon in an interview with Reuters on Taiwan.

The looming specter of China restricting technology exports has South Korea’s industrial sector worried, prompting the government to announce a “strategy to secure core minerals” to reduce its dependence on Chinese critical mineral imports for from the current 80 percent to 50 percent by 2030.

In the context of this strategy, the South Korean Ministry of Trade, Industry and Energy designated 33 as critical minerals and named 10 of those as strategically critical minerals, including the “battery criticals” lithium, nickel, cobalt, manganese and graphite and five types of rare earth materials considered crucial in 21^st century tech applications including the manufacture of semiconductors.  ARPN followers will note that Korea’s 10 “strategically critical minerals” list  – assuming the five REEs are those used in permanent magnets — squares up with ARPN’s “Super Criticals,” circa April 2022.

As part of a push to “expand and strengthen bilateral and multinational cooperation with resource-rich countries” a public-private delegation of officials from South Korea’s public and private sectors is currently visiting Chile and Argentina to “explore ways to boost cooperation on supply chains of lithium and other major minerals and the development of natural resources.” 

The country is also stepping up domestic and global investment.  Last month, South Korean President Yoon Suk Yeol announced that the government and companies including Samsung Electronics Co. would invest $422 billion into chip making and EV manufacturing projects in what Bloomberg calls “the nation’s most aggressive effort yet to win a heated global race for tech supremacy.”

Seoul is further looking to  provide $5.32 billion on financial support to its domestic battery makers looking to invest in infrastructure in North America, while also looking to upgrade its partnership with India with a focus on trade, investment and strengthening critical mineral supply chains.  To put South Korea’s $5.3 billion in context, at 1/12^th the size of the U.S. economy, that’s equivalent to the U.S. Government allocating more than $60 billion to Critical Mineral supply chains.

Whether or not China escalates export controls for critical minerals remains to be seen – though officials already finished taking expert comments on the planned restrictions reported by Nikkei earlier this month and the changes are expected to go into force this year – it is becoming increasingly clear that a “huge realignment” in the critical minerals space is underway, and its one that not only sees the West looking to reduce Chinese resource dominance, but also sees allegiances shift in Asia itself.

The post Looming Export Controls and Critical Mineral Over-Reliance Prompt Realignment Not Just Between China and West, But Also in Asia – A Look at South Korea appeared first on American Resources Policy Network.

Ali points to the inherent irony of the green energy transition — renewable technologies requiring vast and increasing amounts of metals and minerals like lithium, copper, nickel, cobalt, manganese and REEs, but the U.S. Administration finding itself in a bind with the climate movement, a core part of President Joe Biden’s base, not wanting to mine them, “certainly not close to home.”

Ali cites the January 2023 Boundary Waters decision, in which the U.S. Department of the Interior closed over 350 square miles of the Superior National Forest in northeastern Minnesota – an area that holds some of the nation’s largest undeveloped deposits of copper and nickel but is also known for its pristine lakes — to mineral and geothermal leasing for twenty years.

Arguing that while the “Not In My Backyard” (NIMBY) sentiment has gone global – Ali points to Serbia’s Jadar lithium mining project being stopped in response to environmentalist pressures — the “United States seems particularly stuck.”  

(See ARPN’S coverage of the NIMBY movement here.)

Relying on allies, such as Australia and Canada, and countries with “controversial domestic-labour policies and environmental standards, including Zambia and the Democratic Republic of the Congo” rather than developing its own resources has led to the U.S. yielding to China which has “benefited from the uncompromising US opposition to domestic mining and has built up a formidable dominance in critical metal extraction and processing over the past 30 years.”

Ali notes that while “[m]ining has a sordid history of exploitation and plunder, particularly with respect to Indigenous people,” “contemporary mines with regulatory oversight can have workable impact–benefit agreements with communities,” citing specific examples exemplifying such agreements, including Voisey’s Bay nickel mine in Canada and Red Dog Mine in Alaska, which preferentially employ Indigenous people, respect traditional hunting seasons and include incremental royalties and partial resource ownership.

Ali suggests:

“The country is in danger of forgetting one of the four laws of ecology that Barry Commoner (…) established in his 1971 book A Closing Circle: ‘There is no such thing as a free lunch.’ All industrial activities have some ecological impact. As researchers, and as informed societies, we must consider the benefits and trade-offs in concert.”

adding that

“as the world prepares for the 2023 COP28 climate conference — where even free conference lunches are not really free — the United States should revisit Commoner’s wisdom: there is virtue in embracing tough trade-offs.”

All in all, a welcome if somewhat unexpected proposition coming in an article from (mostly) peer-reviewed Nature.

The post Nature Magazine Column Calls on U.S. to “Embrace Tough Trade-Offs” and “Get Serious” About Domestic Mining to Support Green Energy Shift appeared first on American Resources Policy Network.

The Critical Raw Materials Act (CRMA) presented to lawmakers in Brussels on March 16, includes a comprehensive set of actions aimed at shoring up European critical mineral supply chains.

At the EU level, the CRMA would streamline the permitting process for raw materials projects and allow for selected “Strategic Projects” to benefit from support for access to financing and shorter permitting timelines (24 months for extraction permits and 12 months for processing and recycling permits).  The Act also requires EU member states to develop national programs for resource exploration.

An updated critical raw materials list is complemented by a list of “strategic raw materials” deemed “crucial to technologies important to Europe’s green and digital ambitions and for defense and space applications, while being subject to potential supply risks in the future.”

The Act also sets forth clear benchmarks for domestic capacities to diversify critical mineral supply by 2030:

• At least 10% of the EU’s annual consumption for extraction,
• At least 40% of the EU’s annual consumption for processing,
• At least 15% of the EU’s annual consumption for recycling,
• Not more than 65% of the Union’s annual consumption of each strategic raw material at any relevant stage of processing from a single third country.

Followers of ARPN will be interested to learn that the Act designates copper and nickel, metals ARPN has long considered indispensable for a number of reasons - not least because of their status as “gateway metals” yielding access to critical co-products – as critical raw materials.   With nickel added to the U.S. Government Critical Minerals List in 2022, copper remains the outlier – the most “critical non-Critical” as we have said in the past.

Writes Mark Burton for Bloomberg:

“Copper, one of the largest industrial-metal markets, wasn’t included in the EU’s last list of critical raw materials published in 2020. Copper’s diverse uses in manufacturing, construction and industry mean it’s widely viewed as a bellwether for global economic activity, but surging usage in electric vehicles and renewables are fueling fears of deep shortages in years to come.”

 Burton cites Glencore Plc. chief executive Gary Nagle who said that copper production would need to almost triple by 2040 if the world was to meet net zero carbon emission goals, with demand driving prices up by some 15%.

He adds:

“The nickel market, meanwhile, was rocked by an unprecedented price spike last year in the wake of the invasion of Ukraine, which threatened to throttle supplies from Russia. In future, the world will become increasingly reliant on supplies from Indonesia, where supply of the key battery metal is expanding rapidly.”

Nickel was added in the first official USGS update to the 2018 in 2022, bearing testimony to the fact that policy makers and other stakeholders increasingly acknowledge the challenges associated with providing reliable supplies of the critical minerals underpinning the “Tech Metal Era.”

The United States has yet to designate copper a critical mineral in its official government list, but an effort to correct this omission is underway with senators calling on the Secretary of the Interior to use her power to short-circuit the standard three-year review timeframe for the critical minerals list and change copper’s designation to “critical” ASAP.

In a letter to Secretary Deb Haaland in early February, U.S. Senators argued that “[b]y recognizing copper as a ‘critical mineral,’ the United States’ federal government can more effectively ensure a secure and reliable supply of domestic copper resources in the years to come at all points of the supply chain including recycling, mining, and processing. Given the enormous investment required, the time lag for new sources of supply, and projected demand, time is of the essence,” with Senator Kyrsten Sinema (Ind.-Ariz.) adding in an interview that this should be a “no brainer” because “[w]e have major gaps in both our ability to mine and process these minerals to ensure our energy security for the future, and the administration knows how important copper is to our domestic and national security.”

While European Commission President Ursula von der Leyen expressed confidence that the Act would “significantly improve the refining, processing and recycling of critical raw materials here in Europe,”observers lament that the act was “short on details and excluded important raw materials needed for the green energy transition such as zinc, silver and aluminum.” 

Comparing the CRMA to the U.S Inflation Reduction Act, which, in his view “was heavy on providing monetary firepower,” Colin Hamilton of BMO Capital Markets commented that the “the EU version has limited mention of funds but lots of policy rationale.”

The EU sees partnerships with “like-minded countries willing to strengthen global supply chains” as critical for EU strategy to succeed, and has proposed a “Critical Raw Materials Club,” a concept that was already part of U.S.-EU discussions earlier this year amidst European concerns that the U.S. Inflation Reduction Act could end up penalizing non-U.S. companies.  Against the backdrop of rising tension with China and Russia, in a joint statement earlier this month, U.S. President Biden and EU Commission President von der Leyen vowed to iron out such differences and pledged close cooperation on the critical minerals front.

The CRMA will now be discussed and voted upon by the European Parliament and the Council of the European Union before its adoption and entry into force, and ARPN will be sure to keep tabs on related developments.

The post EU Critical Mineral Supply Chain Action Plan Focuses on Permitting, Adds Copper and Nickel to List of Critical Raw Materials appeared first on American Resources Policy Network.

Meanwhile, as global lithium production has quadrupled since 2010, the U.S. share of production has dropped significantly. Once the largest producer of lithium in the 1990s, the United States’ share of production has dropped to 1 percent of the global total, as Australia, Chile and China dominate the field.

As we previously pointed out, China may only account for 13% of total production, but It has not only consistently developed domestic mining capabilities — it has also acquired lithium assets in countries like Chile, Canada and Australia, and, one link down the lithium supply chain, it is now home to 60% of global refining capacity. In light of skyrocketing demand projections, the country has stepped up its involvement in the electric game, and has recently beat out automaker Tesla in a bid to mine for lithium in Nigeria.

As for the United States, according to the latest USGS Mineral Commodity Summaries, “[c]ommercial-scale lithium production […] was from one continental brine operation in Nevada. Lithium was also commercially produced from the brine-sourced waste tailings of a Utah-based magnesium producer. Two companies produced a wide range of downstream lithium compounds in the United States from domestic or imported lithium carbonate, lithium chloride, and lithium hydroxide.”

Big picture, the U.S. simply cannot realize its aspirations to be a global player in the renewable revolution while producing 1% of worldwide lithium supply.

Efforts to strengthen the lithium supply chain are underway. Followers of ARPN are aware of the green energy-related provisions of 2021 congressional infrastructure package, as well as the 2022 invocation of the Defense Production Act for lithium and the battery criticals and the passage of the Inflation Reduction Act (IRA).

[Lithium is the latest in ARPN’s feature series reviewing the battery criticals against the backdrop of the latest USGS Mineral Commodity Summaries. View our posts on graphite, manganese, cobalt, and nickel.]   

In January of this year, the Department of Energy’s Loan Programs Office (LPO) announced a conditional commitment to Ioneer to advance the domestic production of lithium and boron at its Rhyolite Ridge project.

Rhyolite Ridge would become the second lithium mine in the United States, but – while DOE is providing a 9-digit loan guarantee – the project is still pending approval from DOI, the Department of the Interior, where it is mired in the inherent irony of the green energy transition, with environmentalists opposing the project on grounds that Thiem’s buckwheat, a rare wildflower found on the proposed mine site, was added to the endangered species list by the U.S. Fish and Wildlife Service only a few weeks ago.   We have seen this paradox elsewhere. As Reuters columnist Andy Home phrased it: “public opinion is firmly in favour of decarbonisation but not the mines and smelters needed to get there.”

Also in January, General Motors announced that it would jointly invest with Lithium Americas Corp. to develop the Thacker Pass mine in Nevada, which is the largest known source of lithium in the United States, and is considered the third largest in the world.  With a $650 million equity investment, this would represent the “largest investment by an automakers to produce battery raw materials” in GM’s own words. Under the agreement, GM will have exclusive access to the lithium once the investment is complete. The company expects that once the mine is operational in the second half of 2026, the batteries bearing Rhyolite Ridge lithium could power up to 1 million EVs.

Not surprisingly, the Thacker Mine, too, is embroiled in a high stakes legal battle, with environmentalists and tribal leaders attempting to block the project near the Oregon line.  Just last week, however, a federal judge – for the third time in two years – sided with the Biden Administration and Lithium Americas, denying the opposition’s request for an emergency injunction until the 9th U.S. Circuit Court of Appeals can hear their latest appeal.  Based on the judge’s decision, construction could begin as early as this week.

In addition to projects pursuing lithium as a primary material, Rio Tinto’s U.S. Borax Mine in California has recovered lithium from 90-year old waste piles.  The effort has leveraged a public-private partnership linking Rio Tinto with DOE’s Critical Materials Institute, to work through processing challenges.  It’s the kind of unconventional thinking that finds a 21^st Century tech material in the mine tailings of the 1920s, turning a “waste stream” into a “work stream” in a world hungry for lithium.

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, and,  ARPN’s Daniel McGroarty has consistently  pointed out, “we don’t have the luxury of time” anymore.

The post Strengthening the Supply Chains for the “Fuel of the Green Revolution” – A Look at Lithium appeared first on American Resources Policy Network.

While Nickel’s biggest traditional application is in alloying, particularly in the production of stainless and heat-resisting steels, it is its ability to achieve good storage capacity and higher energy density in batteries at an affordable cost that has sent the material’s star soaring in recent years.  It has also sent demand projections soaring, as nickel’s role in the EV revolution takes center stage.

At the end of 2021, nickel was only one of two new metals (the bulk of the expansion of the list from 35 to 50 minerals and metals was owed to the fact that the Rare Earths and Platinum Group Metals were now listed individually) to be added to the revised U.S. Government List of Critical Minerals. As Reuters’s Andy Home wrote at the time, 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 said “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, was “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 minerals list, and has sent carmakers like Tesla and others to embark on missions to secure their own supply chains.

This push gained new urgency with Indonesia’s investment minister hinting at the possibility of Jakarta pursuing the creation of an OPEC-like cartel for nickel (and other key battery materials) last fall.  What is resource nationalism to some is supply risk to others, and that’s clearly part of the narrative around nickel.

The looming specter of battery material cartelization – first introduced earlier this year by South American Lithium producers — along with soaring demand scenarios provided fresh impetus for U.S. stakeholders to kick the buildout of domestic battery supply chains into high gear wherever possible, and efforts to this effect are currently underway.

According to USGS, in 2022, the underground Eagle Mine in Michigan – currently the only U.S. primary nickel mine in operation – “produced approximately 18,000 tons of nickel in concentrate, which was exported to smelters in Canada and overseas. Nickel in crystalline sulfate was produced as a byproduct of smelting and refining platinum-group-metal ores mined in Montana. In Missouri, a company produced nickel-copper-cobalt concentrate from historic mine tailings and was building a hydrometallurgical processing plant near the mine site.”

But with the Eagle project entering its final years, Michigan’s near-neighbor Minnesota holds promise for strengthening the U.S. domestic nickel supply chain.

The first recipients of federal funding disbursed under the 2021 infrastructure law to “supercharge” U.S. manufacturing of batteries for electric vehicles and the electric grid included the Tamarack Nickel Project in central Minnesota.  Talon Metals’ subsidiary Talon Nickel was one of 20 processing and manufacturing companies in 12 states chosen for a combined $2.8 billion award to “expand domestic manufacturing of batteries for electric vehicles and the electric grid.” 

Talon, which had previously signed a six-year agreement with Elon Musk’s Tesla under which Tesla would buy 75,000 metric tons of nickel concentrate, is looking to use part of the government grant to further its plans to construct an ore-processing facility in Mercer County, situated in the east-central region of North Dakota.

As ARPN has noted, the Tamarack project had previously been awarded  $2.2 million to fund an effort 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. Bringing the supply chain home could not only inoculate the U.S. from trade issues on the critical minerals front but could also help reduce the industry’s — arguably large — carbon footprint.

The project is expected to start the environmental review process this year, a process that will be closely watched in particular in light of the Biden Administration’s recent decision to withdraw northeastern Minnesota’s Boundary Waters Canoe Area Wilderness from future mining – a move that could effectively kill another nickel and copper project, the proposed Twin Metals Minnesota underground mine, which has seen an ongoing legal and regulatory battle over the years.

A third proposed copper-nickel project in northeastern Minnesota — the PolyMet mine near Babbitt and Hoyt Lakes, just saw PolyMet Mining and Teck Resources finalizing a joint venture earlier this month to develop PolyMet’s copper-nickel deposit along with another larger ore body controlled by Teck. The project – a 50-50 venture, will be called NewRange Copper Nickel.

With the Tamarack and NewRange Copper Nickel projects situated in different watersheds, they are not affected by the Biden Administration’s Boundary Waters decision; however, as followers of ARPN well know, the not-in-my-backyard sentiment is a firm staple in the discourse over bolstering domestic supply chains, and brings us back to the “inherent irony” or “paradox of the green revolution” Reuters columnist Andy Home has invoked in several instances when covering critical mineral resource supply chains for the very materials underpinning the green energy transition — the paradox that “public opinion is firmly in favour of decarbonisation but not the mines and smelters needed to get there.”

As ARPN has previously pointed out – lofty goals of net carbon neutrality will not be achievable if we don’t embrace a push to secure critical mineral supply chains from “soup to nuts” to borrow a term used by Energy Secretary Jennifer Granholm.  That means “all of the above,” including domestic production and processing of metals and minerals like nickel.

After all, as we’ve noted often at ARPN, the first word in supply chain is… supply.

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