all-of-the-above

Supply chain challenges in the wake of the coronavirus pandemic, Russia’s war on Ukraine, rising resource nationalism in the southern hemisphere, and now China’s Xi Jinping doubling-down on its zero-Covid policy this week which may lead to more lockdowns with serious economic and trade consequences – critical mineral supply chains can’t seem to catch a break.

As the stakes continue to get higher and stakeholder pressure to take action mounts, it is encouraging to see that mainstream awareness of the issue is increasing.

Case in point: CNN’s Fareed Zakaria dedicating a “Last Look” segment of his Global Public Square program to the new race for natural resources triggered by the green transition.

Followers of ARPN will appreciate that unlike much of the coverage of the critical minerals challenge we’re seeing lately, which often might have you believe that concerns only revolve around the “battery criticals”lithium, graphite, cobalt, nickel, and manganese, Zakaria’s segment makes clear that the challenge is much bigger – and includes many other metals and minerals, including what we at ARPN have dubbed the “unsung hero of the green energy transition” and one of the “most critical non-criticals” (alluding to the fact that the U.S. official government critical minerals list has thus far not included it):

Copper.

As we previously argued, while less flashy and headline-grabbing that some of its tech metal peers, Copper deserves far more credit and attention than it has been getting — not least due to its versatility stemming from traditional uses and an increasing range of new applications.  Then there’s Copper’s Gateway Metal status, with the metal yielding access to Critical List co-products essential to “manufacturing the advanced technologies that will power or generations to come, such as Cobalt, Nickel, Tellurium, Molybdenum, Rhenium, Arsenic and REEs.

In the context of advanced energy technology, Copper is an indispensable component for the manufacture of EVs, wind turbines, solar panels, and the electric grid.   The manufacturing process for EVs requires four times more Copper than gas powered vehicles, and the expansion of electricity networks will lead to more than doubled Copper demand for grid lines, according to the IEA – so it’s good to see mainstream media is including the material in its coverage.

Zakaria rightly outlines the challenges stemming from the United States’ over-reliance on foreign supplies, and China’s having cornered the market not only in the supply, but also the processing segment – a challenge Laura Skaer, member of the board of directors of the Women’s Mining Coalition and former director of the American Exploration & Mining Association, outlined succinctly in a piece for Morning Consult a year ago, arguing that “China already refines 50 percent of the world’s copper and the United States only refines about 3 percent. National security experts have warned that relying on China for critical supply-chain materials like refined copper poses a serious threat to America’s national security interests.”

While the U.S. has taken important steps to reduce our over-reliance on foreign metals and minerals and the processing thereof, much more remains to be done.  Zakaria puts his finger on the crux of the issue stakeholders are currently grappling with.

He says:

“The minerals industry isn’t as popular as renewable energy – particularly on the Left. There are real environmental hazards. But if people want to protect the planet from climate change and authoritarian powers, they will have to get onboard with new mineral projects.”

He continues:

“So far the process very slow, according to the IEA. Even after mineral deposits are discovered somewhere, the average time to production is over fifteen years. Some of that is planning and construction, but governments can streamline the permitting process to get these projects moving.”

While pointing to the importance of other components that ARPN has consistently highlighted as part of a comprehensive “all-of-the-above” approach to mineral resource security – recycling and closed-loop solutions as well as increased R&D in the materials science segment – Zakaria closes:

“This will have to remain a priority for years and years to come. For the sake of the planet and international security, we will need to dig deep, quite literally.” 

Watch the full segment:

CNN, Fareed Zakaria, Global Public Square, Last Look: The green transition will trigger a new race for natural resources, 4/30/2022

As U.S. stakeholders grapple with the question of how to bolster U.S. supply chains for the battery criticals and other critical minerals amidst skyrocketing demand scenarios and growing geopolitical pressures, our allies are taking steps of their own to unleash their mineral potential.

Looking north, in order to “secure Canada’s place in important supply chains with other countries and [to] implement a just and sustainable Critical Minerals Strategy,” the Trudeau government 2022 budget blueprint released earlier this month proposes up to $3.8 billion over eight years beginning in the fiscal year 2022-23 in “significant investments, while working closely with affected Indigenous groups, to contribute to the development of a domestic zero-emissions vehicle chain.”  

Meanwhile, across the globe, the Australian Federal Government announced its 2022 Critical Minerals Strategy in March of this year, building on the first Critical Minerals Strategy initially published in 2019.  According to the Australian Government Department of Industry, Science, Energy and Resources, the revised strategy “has a vision to put Australia at the centre of meeting the growing demand for critical minerals. It will underpin our prosperity and security by improving access to reliable, secure and resilient supplies of critical minerals.” By de-risking projects, creating an “enabling” environment and strengthening international partnerships, the Australian government aims to make Australia a “global critical minerals powerhouse by 2030, delivering stable supply, sovereign capability and regional jobs and growth to Australia.”

In keeping with the Biden-Administration’s emphasis on leveraging international partnerships with close allies, the United States has continued to work closely with Canada and Australia to strengthen and formalize mineral resource cooperation. Most recently, Australia’s Minister for Trade, Tourism and Investment Dan Tehan and U.S. Secretary of Commerce Gina Raimondo met in Washington, D.C. at the end of March for the inaugural Australia-US Strategic Commercial Dialogue (AUSSCD) to discuss the accelerating green energy transition and related mineral resource challenges.  The executive-level roundtable highlighted the importance of developing shared approaches to ESG and traceability standards and working with other like-minded partners to build resilient supply chains.

These developments are encouraging, but tempting as it may be – particularly in light of the pervasive nature of the “paradox of the green revolution”, as Reuters columnist Andy Home called the paradox that “public opinion is firmly in favour of decarbonisation but not the mines and smelters needed to get there” – we must not be complacent and rely too much on friend-shoring.

With the advent of political campaign season, the balancing act to reconcile green credentials with the acknowledged need for domestic resource development will not get any easier for the Biden Administration.  “Friend-shoring” is certainly an important pillar of the “all-of-the-above” concept, but, in light of mounting demand and ever higher stakes with Russia’s war on Ukraine and rising resource nationalism, it is insufficient to alleviate our overall problem.

Thankfully, as ARPN has consistently argued, “[t]he good news is that courtesy of the materials science revolution, industry can harness new technologies to do expand our mining infrastructure responsibly and sustainably – (…) and as even Energy Secretary Jennifer Granholm acknowledged [last] 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.’” 

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