In the wake of several eye-openers regarding our nation’s critical mineral supply chain woes — the coronavirus pandemic, increasing trade tensions with adversary nations like China, and reports underscoring the mineral intensity of our green energy future — the bipartisan infrastructure package passed by the U.S. Senate before the August recess contained a series of provisions that, in the words of analyst Andy Home, represent “undoubtedly good news for industrial metals” and mark a “broader investment drive across the full length of the metallic supply chain.”
As lawmakers continue their work on the package, new data analysis provided by S&P Global Market Intelligence underscores why efforts to boost U.S. control of critical mineral supply chains and “overcoming reliance on other nations not only for supplies but for infrastructure and processing capacity,” must be prioritized:
According to data collected earlier this summer, “U.S. imports of critical minerals increased 7.9% in the second quarter on a year-over-year basis, while staying relatively flat quarter over quarter.”
S&P Global Market Intelligence notes that “the volume of critical minerals flowing into the country in the first half of 2021 surpassed the 316,108 tonnes imported in the first six months of 2020 by 41,209 tonnes.”
As S&P Global Market Intelligence’s Camille Erickson argues, “China maintains a firm grip on the processing of several critical minerals.” She points to International Energy Agency that have China processing roughly 90% of global REE supply (and 50% to 70% of global Lithium and Cobalt supply). Erickson further notes a lack of “sufficient midstream infrastructure in the U.S.,” which “means critical minerals often must undergo various chemical processes — such as concentrating, refining and smelting — elsewhere.”
While the bipartisan infrastructure package as passed by the U.S. Senate is looking to “bring back some of the crucial midstream components that we are very much lacking here in the U.S. and North America more broadly,” the American Exploration & Mining Association would like to see an even bigger, more comprehensive push, arguing (on Twitter) that “[e]fforts to rebuild the mineral supply chain are incomplete. We need more mines and smelters, but we need efficient permitting too.”
Here’s hoping that lawmakers — refreshed from their August recess — do justice to the “all of the above” approach to mineral resource policy as embraced by the Biden Administration in its 100-Day Supply Chain Review (see our report on it here).
As critical minerals expert Morgan Bazilian recently wrote in a piece for The Hill, in which he embedded his call for a comprehensive mineral resource policy approach into the green energy transition context:
“If the U.S. wants to get out from under China’s thumb while avoiding conflict, then it must create effective mineral policy by rebuilding innovation capabilities, partnering with industry, and leveraging the government’s role as a market actor. (…) As a nation we have spent so much time preparing for a better tomorrow that we may have neglected to get the materials we will need to actually build it. If the U.S. wants to take direct action to fight climate change and save the lives of its people, then it will need the mining and metals industry.”
