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American Resources Policy Network
Promoting the development of American mineral resources.
  • Would Incentivizing U.S. Nickel Imports From Indonesia be a Backdoor for U.S. Tax Subsidies for Chinese Nickel Companies?

    Trade policy in an integrated global economy can take some unexpected twists and turns.  Today’s post highlights returns to one development under discussion that could lead to a result diametrically opposed to the original intent, in this case, of the U.S. Congress and Biden Administration.

    Earlier this month, in a letter to Biden Administration officials, U.S. Senators registered their concerns regarding media reports of a potential “limited free trade” agreement between the United States and Indonesia – sometimes dubbed the “nickel capital of the world” — on critical minerals in the context of the Administration’s effort to expand the number of countries to qualify for the tax credits afforded under the recently enacted Inflation Reduction Act (IRA).

    Senators argued that forging ahead with negotiations with Indonesia without having developed a comprehensive accounting of domestic sourcing options, and the opportunities from countries with which the U.S. already has trade agreements, would “undermine the intent of Congress and undermine the jobs and futures of our workers.” (See ARPN’s earlier post on the issue here) 

    But that’s not all.  Now a news story from Asian media examines whether such a pact might actually provide U.S. taxpayer-funded subsidies that would benefit Chinese mining companies.  For a U.S. law meant to encourage U.S. resource development and reduce foreign resource dependence not least on China, it’s an unintended consequence, to say the least.

    As Nikkei Asia picks up the story, the senators’ opposition is throwing “a wrench int the Biden Administration’s plans to host [Indonesian] President Joko Widodo at the White House this month, to coincide with the Indonesian leader’s attendance at the Asia-Pacific Economic summit in San Francisco.”

    Nikkei cites North American mining industry representative Todd Malan who points out that “[t]he idea behind the IRA was that free trade agreement countries have high standards and was a proxy for saying ‘let’s build up a supply chain outside of China and to do it with allies that have free-trade agreements,” adding that “The point of the letter is to say that giving a free trade agreement to Indonesia is just a backdoor for Chinese companies and that U.S. taxpayers should not be giving a subsidy to Chinese miners in Indonesia.” 

    Indeed, Chinese companies are heavily invested in the country. Benefiting from long-standing relationships with Indonesia, they have “poured upwards of $14 billion into two ore-rich islands to lock in supplies for battery production,” according to Bloomberg reports.

    Malan is chief external affairs officer at Talon Metals, a mining company focused on advancing U.S. domestic nickel projects which have been awarded federal funding in recent months – along with several other domestic projects for other battery and defense criticals. (See ARPN’s  recent coverage here and here)

    All of which underscores, as ARPN has previously pointed out, that “Critical Mineral resource development can begin at home, where political risk is low and environmental, labor and mine safety standards are high” – principles that should guide stakeholders when it comes to sourcing nickel and other Criticals, particularly as geopolitical tensions surge across the globe. 

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  • Move Over, Lithium – Manganese Emerges as a Key Player in the EV Revolution

    When it comes to the metals and minerals underpinning the green energy transition, Lithium, not surprisingly has become the obvious poster child. After all, one of the key technologies in the context of the EV revolution is lithium-ion battery technology.

    However, as followers of ARPN well know, there is more to the story, and more than one battery technology, and, as Jessica Cummins outlines in a recent piece for Stockhead, demand for one of the lesser-known raw materials and one of the five minerals ARPN has designated as “battery criticals” – manganese – is on the rise.  Writes Cummins:

    “An afterthought in global commodity markets for the last few decades, almost half of today’s lithium-ion batteries include manganese, and CPM’s projections have that figure jumping above 60% by 2030.

    With its ability to increase energy density, equating to longer driving range in the case of electric vehicles, and the added benefit of combustibility reduction, manganese is fast emerging as a vital material to the future of the EV industry and automakers are cashing in.” 

    In recent years, automakers increasingly expanded their battery material focus to include manganese, and while Volkswagen’s 2021 announcement of the company’s intention to incorporate high-manganese cathodes into its EV batteries was considered surprising, other automakers have since followed suit.

    Cummins believes, however, that the ‘third wave’ of battery technology development, called lithium-manganese-iron-phosphate (LMFP) battery technology, might have the biggest impact going forward.

    She points to recent research which has found that the incorporation of manganese into an upgraded version of lithium-iron-phosphate batteries (LFP), which represent the dominant battery chemistry in China, can double the range for a single charge from roughly 500km to up to 1,000km.  A Chinese supplier for Volkswagen says its LMFP technology has a life cycle of 4,000 charge-discharge cycles and over a lifetime can reach a range of up to 4 million km.

    Element 25, owner and operator of Australia’s biggest onshore manganese resource, is building a battery plant in Louisiana and will be supplying Stellantis and General Motors. Cummins cites the company’s managing director Justin Brown, who says:

    “What we’re seeing is the shift away from cobalt, which has meant that the proportion of nickel has been increasing, however nickel has become problematic because all significant nickel supply comes from laterite processing in Indonesia, which is energy intensive and an environmentally destructive process.”

    Brown adds:

    “Manganese is now the go-to metal and while the transition isn’t going to happen overnight, I’m told by the OEMs that the factories they are building now will be able to switch across to high manganese cathode materials without any significant re-tooling. It has become a really important part of their planning and over the next two years, when we get into production, I think you’re going to see a completely new landscape.”

    With the importance of manganese growing – industry insiders already see LFMP batteries overtaking LFP in China – there is a looming supply shortage in the high-purity manganese market which is set to “really heat up” in 2028.

    BloombergNEF expects demand from manganese from the battery segment to surge ninefold by 2030.  These developments have prompted a series of U.S. domestic efforts to secure manganese supply chains.

    As ARPN outlined earlier this year, Nevada Silver Corporation, a U.S.-based mineral development company announced that its Minnesota-based subsidiary North Star Manganese received the required permits to commence drilling at its Emily Manganese Project.   Located in the Cayuga Iron Range of Central Minnesota, the Emily District “may contain the largest and highest-grade manganese deposits in the Northern Hemisphere” according to USGS. Drilling has begun and the company has already constructed a processing plant on site.

    Further down the development path is the Arizona-based Hermosa Project, owned by major global manganese miner South32’s U.S. subsidiary, which the company calls its first “next generation mine” based on a design that uses automation and targets carbon-neutral mining operations in support of South32’s goal of achieving net zero greenhouse gas emissions by 2050.  Hermosa is “multi-Critical,” hosting not only manganese, but what may be the world’s largest zinc deposit, which is a key material in solar and wind power systems.

    With demand for EV technology surging, and developments as the ones outlined by Cummins underway, the days when manganese flew under the radar are a thing of the past.

    Expect to see and hear more about the material going forward, because, as Benchmark Mineral Intelligence’s Simon Moores phrased it last year, manganese represents an “EV supply chain bottleneck that can no longer be pushed into tomorrow by battery and automakers.”

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  • Visualizing the Lithium Challenge – Time to Strengthen the Domestic Supply Chain

    As part of the Biden Administration’s efforts to bolster U.S. critical mineral supply chains, and specifically the battery supply chain, the Department of Energy’s Loan Programs Office (LPO) has announced a conditional commitment to Ioneer Rhyolite Ridge to advance the domestic production of lithium and boron. Under the conditional commitment, the LPO would lend up to $700 [...]
  • Energy Provisions in Inflation Reduction Act Spur Efforts to Build Out U.S. Battery Supply Chain, as States Step Up Their Own Efforts

    The energy provisions in the recently passed congressional Inflation Reduction Act (IRA) are beginning to bear fruit.  Standing to get $35 million in government subsidies for every gigagwatt-hour of cell storage capacity produced, battery suppliers are stepping up their efforts in the United States. As the Wall Street Journal reports, Norwegian battery maker Freyr and energy conglomerate [...]
  • Battery Show Panels Mull Options to Strengthen U.S. Battery Supply Chains in Wake of Inflation Reduction Act Passage

    As one of the longest running and biggest automobile shows in North America, the North American International Auto Show (NAIAS) — or the Detroit auto show, as it is known more colloquially — has traditionally been one of the key events for car makers every year.   This year, however, another concurrently held event taking place roughly 30 miles [...]
  • Congress “Net-Zeroes” in on Energy Security, Supply Chains for Critical Minerals – A Look at the Inflation Reduction Act

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

    Acknowledging the vast material inputs required to power the EV revolution in the context of the push towards net zero carbon — as well as the significant supply chain challenges associated with the sought-after shift — the Biden Administration has announced a $3.1 billion funding program for U.S. companies producing and recycling lithium-ion batteries. According to Secretary [...]
  • Russia’s War on Ukraine and Rising Resource Nationalism to Reshape Global Post-Cold War Order and Resource Supply Chains – A Look at Cobalt

    With a single electric vehicle battery requiring between 10 and 30 pounds of cobalt content, the lustrous, silvery blue, hard ferromagnetic, brittle nickel and copper co-product has long attained “critical mineral” status. However, with most global supplies of the material coming from the Democratic Republic of the Congo, where mining conditions often involve unethical labor standards and [...]
  • It’s the Processing, Stupid? The Critical Mineral Supply Chain Challenge Visualized

    They say a picture is worth a thousand words. 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 [...]
  • Securing the Supply Chain — “If Tesla’s Got Troubles, Everyone Should Worry”

    Every December, editors of the English-speaking world’s dictionaries release their choices for Word of the Year, a “word or expression that has attracted a great deal of interest over the last 12 months.” Unsurprisingly, for 2020, the honorees were coronavirus-related terms, with Merriam-Webster and Dictionary.com bestowing the honor on the word “Pandemic,” whereas the Collins Dictionary Word of the [...]

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