American Resources Policy Network
Promoting the development of American mineral resources.
  • 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 million to the company to develop lithium carbonate for EV batteries from the Rhyolite Ridge Lithium-Boron Project in Esmeralda County, NV.  According to DOE, if implemented, the project could produce enough lithium production to power 370,000 EVs each year, and offtake agreements with Ford, Prime Planet Energy & Solutions and EcoPro Innovation have been executed.

    The announcement could not be more timely. With lithium a key component of the lithium-ion battery cathode, demand for the material is surging rapidly, and is projected to exceed current global production by 2030.

    Meanwhile, as global lithium production has quadrupled since 2010, the U.S. share of production has dropped significantly.

    new graphic by Visual Capitalist paints the picture, and it’s not pretty:

    Screenshot 2023-01-24 at 9.08.36 AM

    As Visual Capitalist outlines, the U.S. was the largest producer of lithium in the 1990s, accounting for over one-third of global production in 1995.  Today, three countries, Australia, Chile and China dominate the field, with Australia producing more than 50% of the world’s lithium.

    As for the U.S., it now accounts for 1% of the world total.

    China may only account for 13% of total production, but has not only consistently developed domestic mining capabilities, but has also acquired lithium assets in countries like Chile, Canada and Australia, and – one link down the lithium supply chain — has ensured it is home to 60% of global refining capacity.

    The Rhyolite Ridge project would be 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.”

    But as followers of ARPN well know, we clearly can’t have our cake and eat it, too.

    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 pointed out on several occasions, “we don’t have the luxury of time” anymore.

  • 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 Koch Industries Inc., are accelerating plans to build a multibillion dollar battery plant in Coweta County, Georgia, with Freyr’s CEO Tom Einar Jensen citing the IRA as the reason for speeding up the partnership’s timeline.

    Unlike many other projects, which are heavily focused on the EV battery value chain, the Koch Industries/Freyr partnership will supply lithium-Ion batteries primarily for the energy storage market.

    According to the Wall Street Journal, “the first phase of the project in Coweta County, Ga., will bring online 34 gigawatt-hours of annual cell production at a projected cost of $1.7 billion. (…)  A second phase to expand the Georgia plant could increase the cell capacity further and add production of complete energy-storage units or battery inputs such as cathodes or anodes. The total investment is expected to reach $2.6 billion by 2029.”

    The project, which is expected to create more than 720 jobs, is another case in point for states taking on a more active role in securing critical mineral supply chains.

    According to Jensen, the partners decided to locate the project in Coweta County “in part because of an undisclosed financial package the county offered together with the state of Georgia.”  As outlined in the press release issued by Governor Bryan P. Kemp’s office on the project, the state is looking to cultivate a “vertically integrated supply chain that will help companies increase efficiencies by reducing the reliance on imported materials.”

    Earlier this fall, the State of Michigan approved a “more than $200 million grant for Our Next Energy Inc.’s (ONE) planned EV battery factory in Van Buren Township, Michigan.  The company, an EV battery startup spearheaded by a former leader of Apple Inc.’s secretive car project, plans to invest $1.6 billion into the project, which is slated to be fully operational by the end of 2027 and have the capacity make battery cells for about 200,000 EVs annually.”

    Also in October, the State of Louisiana entered into a partnership with Ucore with a significant incentive package to establish a rare earth separation facility in the state.  The package includes $9.6M in tax incentives and payroll rebates over the first ten years of operation.

    Even some cities are getting into the act.  In June, the city of Stillwater, Oklahoma approved a $7 million incentive package for USA Rare Earth’s vertically-integrated rare earth metallization and permanent magnet manufacturing plant, a $100 million investment.  The company recently announced it will partner with Oklahoma State University on materials science initiatives.

    States like Oklahoma, Texas and Kansas have also attracted EV battery makers as automakers scramble to lock down supplies and policy stakeholders work to create frameworks conducive to attracting investment into these critical industries.

    In the coming weeks and months, ARPN will continue to feature more examples of state level public-private cooperation or formalized public private partnerships (PPPs) to sustainably strengthen domestic critical mineral supply chains.

  • 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 [...]
  • “Undoubtedly Good News for Industrial Metals” – a Look at the Senate-passed Infrastructure Package

    In a recent piece for Reuters, columnist Andy Home unpacks the U.S. Senate-passed bipartisan infrastructure package.   While the bill has yet to make it through the U.S. House of Representatives and a likely conference committee, it is worth taking a look at what its passage could mean for the critical minerals sector. According to Home, the [...]
  • DoD Chapter of 100-Day Supply Chain Report Acknowledges Gateway/Co-product Challenge

    Friends of ARPN will know that “much of our work is grounded in a conviction that the Technology Age is driven by a revolution in materials science – a rapidly accelerating effort that is unlocking the potential of scores of metals and minerals long known but seldom utilized in our tools and technologies.” In this [...]