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. 

The post Would Incentivizing U.S. Nickel Imports From Indonesia be a Backdoor for U.S. Tax Subsidies for Chinese Nickel Companies? appeared first on American Resources Policy Network.

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.”

The post Move Over, Lithium – Manganese Emerges as a Key Player in the EV Revolution appeared first on American Resources Policy Network.

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.

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

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.

The post Visualizing the Lithium Challenge – Time to Strengthen the Domestic Supply Chain appeared first on American Resources Policy Network.

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.

The post Energy Provisions in Inflation Reduction Act Spur Efforts to Build Out U.S. Battery Supply Chain, as States Step Up Their Own Efforts appeared first on American Resources Policy Network.

Billed as “North America’s largest and most comprehensive advanced battery manufacturing trade show,” the Battery Show held September 13th through the 15th, drew a record crowd of 15,000 people, which, according to organizers is almost 50 percent higher than pre-pandemic levels.

One big factor, says Gabrielle Coppola for Bloomberg’s Hyperdrive newsletter, was federal legislation — the just passed Inflation Reduction Act (IRA) with its impactful energy provisions.

Citing industry representatives who see an uptick in interest in “an industry that’s growing, where there’s substantial government support,” Coppola writes:

“Battery upstarts are salivating over the goodies in the bill, particularly the tax credits for manufacturing components here in the US.”  

She adds:

“While US startups are loving the carrots in the IRA, others are unhappy about the sticks. The auto industry lobbied against content rules that will limit how many EVs will be eligible for consumer tax credits. Korean trade officials have objected to their US counterparts on behalf of Hyundai, Kia and battery manufacturers who fear excluding Chinese-sourced materials and imported cars will put them at a disadvantage.”

Mulling several options on how to move forward, panelists discussed ideas ranging from creating a U.S. “white list”similar to the Chinese governments four “White Lists” created in the middle of the last decade outlining approved suppliers from which OEMs would have to purchase batteries in order to qualify for government subsidies, to the implementation of a “battery passport” similar to what has been proposed in Europe, where a consortium of 11 car makers and battery producers has received more than $8.5 million in government funding to “develop a common classification and standards for gathering and disclosing data on batteries.”

As Coppola outlines, such a system would not “explicitly ban Chinese suppliers, but if you exclude nickel from Indonesia or cobalt from the Democratic Republic of Congo, it could have that effect,” but U.S. automakers are skeptics when it comes to the passport idea for a number of reasons.

The United States’ nascent battery manufacturing efforts are still very much dependent on China, and as followers of ARPN well know and industry experts have already outlined, the process of decoupling from Chinese supply chains is fraught with challenges, not least because, in Coppola’s words, “for all the gold-rush mentality and rhetoric about the power of American innovation, companies are anxious that if the US goes too far in its bid to cut out China, their products could be vulnerable to retaliation.”

One thing, however, is clear —  all the challenges notwithstanding, the Inflation Reduction Act’s energy provisions send a signal to investors that the U.S. is serious about “building the secure, responsible industrial base our economy and national security needs,” and, provided stakeholders act comprehensively and decisively, may jump-start the effort “…to reclaim critical mineral chains.” 

The post Battery Show Panels Mull Options to Strengthen U.S. Battery Supply Chains in Wake of Inflation Reduction Act Passage appeared first on American Resources Policy Network.

The clean energy provisions in the Inflation Reduction Act negotiated by Senators Chuck Schumer (D-NY) and Joe Manchin (D-WV) — which passed the U.S. Senate on August 7, 2022, was approved by the U.S. House of Representatives on August 12, 2022 and is now headed for U.S. President Joe Biden’s desk – include combined investments of $369 billion aimed at reducing carbon emissions by roughly 40% by the end of this decade.

A swath of significant clean energy tax credits aims at increasing domestic energy production while at the same time accelerating energy innovation abroad.

Among them are:

• $30 billion in production tax credits to accelerate domestic critical minerals processing as well as manufacturing of batteries, solar panels and wind turbines

• $10 billion in investment tax credits to build manufacturing facilities for EVs, wind turbines and solar panels

• $500 million to use the Defense Production Act to accelerate critical mineral production among other defense priorities

• $2 billion in retooling grants for existing auto manufacturing facilities to transition to the manufacture of EVs

• Up to $20 billion in loans for the construction of new clean vehicle manufacturing facilities

• $2 billion in materials science research funding for the National Labs

The package further includes funding for tax credits and rebates for consumers buying electric vehicles, installing solar panels or making other energy-efficiency upgrades to their homes, including, a credit of $4,000 for lower-and middle-income individuals purchasing used EVs, and up to $7,500 tax credits for EVs.  These represent a renewal of the existing $7,500 electric vehicle Federal tax credit starting in January of 2023, and carrying it through until the end of 2032. The former 200,000-vehicle cap is removed and all manufacturers will have access to the credits if they comply with the other requirements in the package.

However – and of considerable interest for followers of ARPN — a new requirement is that qualified cars must be assembled in North America, and adhere to mandated “escalating levels of critical minerals to be sourced from the U.S. or a country with a free-trade agreement with the U.S.”

Green Car Congress summarizes the escalating levels of sourcing requirements for applicable battery critical minerals (with the bill defining an extensive list of applicable minerals) as follows:

“40% for a vehicle placed in service before 1 January 2024;

50% for a vehicle placed in the service during calendar year 2024;

60% for a vehicle placed in service during calendar year 2025;

70% for a vehicle placed in service during calendar year 2026; and

80% for a vehicle placed in service after 31 December 2026.

The bill places similar restrictions on the percentage of value of the components, but leading up to a 100% requirement for vehicles placed in service after 31 December 2028.”

While experts like John Adams, U.S. Army brigadier general (ret.), believe that the sourcing requirements for the battery materials contained in the package are key to addressing “emerging energy security vulnerabilities before they are intractable crises,” others have cautioned that because the auto industry is so heavily reliant on battery materials and components from China – as evidenced by the latest supply deals inked by Tesla – the requirement will represent an almost insurmountable challenge. Says Simon Moores, chief executive of Benchmark Mineral Intelligence:

“Considering it takes seven years to build a mine and refining plant but only 24 months to build a battery plant, the best part of this decade is needed to establish an entirely new industry in the United States.” 

The challenge is certainly real as, in the words of General Adams: “China has worked diligently to turn mineral supply chains into an economic leg up but also an enormous source of geopolitical leverage — not unlike how Russia has leveraged its energy trade with Europe.”  He maintains however, that “the mineral sourcing requirements in the reconciliation bill – coupled with other incentives to encourage domestic mining, mineral processing and recycling– are precisely the bold measures needed to address this alarming vulnerability.” 

Also of note for followers of ARPN, the package places an emphasis on a concept which, as Reuters columnist Andy Home recently suggested, “could allow some to move beyond [carbon] neutrality to become net carbon negative:” a set of incentives to substantially expand carbon capture technologies that capture carbon dioxide and either store it underground or ship it for reuse.

As ARPN previously pointed out, “experts believe that harnessing the natural chemical reactions that convert captured CO2 into rock and store it underground, as currently done at large scale by carbon mineralization company Carbfix at its Coda Terminal in Iceland (see our piece on the issue here), could become an important asset in the push to meet global climate goals.”

The emphasis on carbon capture in the package is consistent with the U.S. Department of Energy’s recent $2.2. million award to fund to a Rio Tinto-led project with joint-venture partner Talon Metals Corp. at the Tamarack Nickel Project in central Minnesota to achieve carbon capture by a process that mineralizes the carbon in rock – a process considered far more stable than methods that inject carbon, where it remains vulnerable to seepage and fracturing due to earthquakes.

Some caution, however, that “while the new bill may appear helpful on a theoretical basis, both carbon capture and storage and direct air capture could face some serious headwinds over the course of the next decade and beyond,” possibly in the form of opposition to the construction of necessary pipelines.

Any new law this wide-ranging will require federal guidance on the way to implementation – and spark follow-on efforts by resource development opponents to roll-back some elements even as resource development proponents look to build on this new legislative initiative.

All of which is good reason to be hopeful that the bill’s requirements will help jumpstart a more comprehensive push towards domestic sourcing and processing, onshoring, friend-shoring, and harnessing the materials science revolution, which are important components of a comprehensive “all-of-the-above” resource development approach.

As the bill proceeds to the president for signature, ARPN will continue to monitor what may well be, as General Adams phrases it, “a critically important leap forward to build the secure, responsible industrial base our economy and national security needs.”

The post Congress “Net-Zeroes” in on Energy Security, Supply Chains for Critical Minerals – A Look at the Inflation Reduction Act appeared first on American Resources Policy Network.

According to Secretary of Energy Jennifer Granholm, the move to provide grants to companies that can create new, retrofitted or expanded processing facilities as well as battery recycling programs will further the Biden Administration’s aspiration that 50 percent of all vehicles sold in America by 2030 be electric while strengthening U.S. energy independence.

The funds, which account for almost half of the $7 billion approved for domestic battery supply chain improvements in the 2021 infrastructure law, will be released via grants to as many as thirty companies which will be required to match them on a 50-50 basis.

Abigail Wulf, vice president of critical minerals strategy at the non-partisan advocacy group SAFE said: “The United States is finally getting into the global battery race and broader race for the future,” adding that “[i]t’s now up to DOE to get the money out the door to projects that will make us stronger in the short- and long-term.”

The move ties into a broader push by the Biden Administration to strengthen critical mineral supply chains, and follows on the heels of a March 31 presidential determination to invoke the Defense Production Act to shore up domestic production of the critical minerals required to manufacture EV batteries.

However, mining expert Debra Struhsacker, co-founder of the Women’s Mining Coalition, has pointed to “mixed signals” sent by the Biden Administration about “whether it is really serious about extracting critical minerals from U.S. mines,” arguing that “on the same day the president made his Defense Production Act announcement, the Department of the Interior published a Federal Register notice to begin a process to change mining laws and regulations in ways that could make it harder and more expensive to develop critical minerals and put lands off-limits to mining.”

As National Mining Association president and CEO Rich Nolan said in response to the presidential determination invoking the DPA earlier this spring:

“The minerals supply chain that will drive the electrification of our transportation sector and the energy transition is not only at risk from a perilous and growing import dependence, but the approaching minerals demand wave is set to strain every sector of the economy and requires an urgency in action from government and industry never before seen. Unless we continue to build on this action, and get serious about reshoring these supply chains and bringing new mines and mineral processing online, we risk feeding the minerals dominance of geopolitical rivals. We have abundant mineral resources here. What we need is policy to ensure we can produce them and build the secure, reliable supply chains we know we must have.”

Recent actions taken by the Administration to strengthen domestic supply chains thus far are important steps towards greater mineral resource independence – but they must be embedded into the context of a comprehensive and unambiguous “all of the above” approach across the entire value chain.  As we like to say at ARPN, “supply chain” begins with… supply.

The post Biden Administration Announces Grant Program for Domestic Production and Recycling of EV Battery Components appeared first on American Resources Policy Network.

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 child labor, as well as poor environmental standards, battery makers and researchers were in some cases beginning to turn to nickel as a substitute for cobalt — as in nickel-iron-aluminum cathodes, for example.

And here’s where environmental and human rights concerns intersect with geopolitics.

Russia’s ongoing war on Ukraine is increasingly straining nickel supply chains (see our latest post here).  As a result, analysts are keeping a close eye on cobalt, which could see prices go up as potentially persistent “elevated nickel prices could push demand from battery production back in cobalt’s direction.”

At the same time, concern over cobalt supply chains is mounting against the backdrop of a major court ruling in the Democratic Republic of the Congo, which, according to the Wall Street Journal’s What’s News podcast from March 14, has sent “shockwaves through the industry with potentially wide reaching implications for China, the US and the world.”

In the recent ruling, a DRC court appointed a temporary administrator from the state miner to effectively take control of China Molybdenum’s Tenke Fungurume mine amid a dispute between the shareholders over reserves of copper and cobalt. According to Reuters, the dispute began last fall, when the DRC’s government set up a commission to “reassess the reserves and resources at the mine (…) in order to ‘fairly lay claim to (its) rights,’” after alleging that the Chinese miner deprived the country of millions of dollars in annual payments for undeclared discoveries of copper and cobalt.

As WSJ correspondent for Uganda and Africa’s Great Lakes Region Nicholas Bariyo argues, the move appears to be part of a larger push by the DRC to take control of the lucrative cobalt industry. Says Bariyo:

“The DRC, despite having all these huge mineral resources remains one of the poorest countries in the world with a significant percentage of the population living under less than $2 a day and most of them unemployed and this widespread poverty. So in this case, the Congolese feel like they’re not benefiting so much from this mineral earth. And at the same time, when you look across the wider continent, commodity prices are skyrocketing and most of these resource rich nations tend to push for bigger share of proceeds from this industry as prices go up here. So this is something that is likely to really spiral beyond the Congolese border.” 

Developments in the DRC tie into an overall shift towards resource nationalism around the globe, as evidenced most recently in Central and South America, where the political tide “has turned decisively toward leaders who openly shun laissez-faire economics” and “a new generation of presidents and legislative leaders is advocating for greater government control of national economies, and with this trend, the specter of resource nationalism has once again gained a foothold in the region,” as Peter Schechter and Juan Cortiñas recently outlined in a  piece for Marsh McLennan’s Brink News.

All of which is to say that the newfound resolve of the Biden Administration to make “major investments in domestic production of key critical minerals and materials, ensuring these resources benefit the community, and creating good-paying, union jobs in sustainable production,” and new reports that “US regulators are warming to approving new domestic sources of electric vehicle battery metals, as Washington bids to avoid a reliance on strategic minerals imports similar to that on crude oil,” are a more than welcome development.

As Senators Lisa Murkowski (R-AK), Joe Manchin (D-WV),  James Risch (R-ID), and Bill Cassidy (R-LA) argued in a recent letter to President Biden urging the Administration to “invoke the Defense Production Act (DPA) to accelerate domestic production of lithium-ion battery materials, in particular graphite, manganese, cobalt, nickel, and lithium:”

“Allowing our foreign mineral dependence to persist is a growing threat to U.S. national security, and we need to take every step to address it. The 100-day report acknowledges the ‘powerful tool’ the DPA has been to expand production of supplies needed to combat COVID-19, as well as the potential the DPA could have to ‘support investment in other critical sectors and enable industry and government to collaborate more effectively.’  The time is now to grow, support, and encourage investment in the domestic production of graphite, manganese, cobalt, lithium, nickel, and other critical minerals to ensure we support our national security, and to fulfill our need for lithium-ion batteries – both for consumers and for the Department of Defense.”

As the world begins to realign in the wake of Russia’s attack on Ukraine and rising resource nationalism, it is becoming increasingly clear that the U.S. will have to harness our arguably vast domestic resource potential across the entire value chain — from mine to manufacturing – if we want to remain safe, secure and competitive in the 21st Century.

The post Russia’s War on Ukraine and Rising Resource Nationalism to Reshape Global Post-Cold War Order and Resource Supply Chains – A Look at Cobalt appeared first on American Resources Policy Network.

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 it comes to processing.

According to the graphic, China has the edge when it comes to producing Rare Earths, currently accounting for 60 percent of global production.  China also produces 13 percent of global lithium supplies – another key material underpinning the green energy transition.  However, it is the processing segment of the supply chain where China has systematically established firm grip and has attained a startling level of control, accounting for 35 percent of global nickel refining, 58 percent of lithium refining, 65 percent of cobalt refining, and a whopping 87% of global REE refining. Expressed a little flippantly, it’s the processing, stupid.

The chart must be viewed against the backdrop of the accelerating global push towards carbon neutrality, evidenced most recently by electric vehicle sales outpacing diesel car sales in Europe for the first time in history.

In light of the growing urgency to secure critical mineral supply chains, the United States’ notable absence from the Visual Capitalist chart should give pause to stakeholders.

As National Mining Association president and CEO Rich Nolan argued in a November 2021 op-ed, while the United States still has a shot at winning the EV revolution, it is currently not only not in the lead, but is “being lapped” by China.

Benchmark Mineral Intelligence data shows that while battery megafactories have gone mainstream, with 225 plants in the pipeline as of August 2021.  While the U.S. is no longer a bystander in this race, only very few megafactories are currently located in the United States.

To succeed in this environment, Benchmark Mineral Intelligence’s Simon Moores says stakeholders will need to understand the lithium-ion-to-EV supply chain, its individual sections, and the linkage between them:

“Automakers who quickly understand the importance of these linked steps in the battery supply chain to the quality and cost of their EVs will be the most successful at navigating the next decade. 

For governments, the shifts in the economics of the supply chain […] provide opportunities to create jobs, garner influence over a strategic industry, and establish new trading relationships, particularly relevant as Europe and the United States, under a Biden presidency, will seek to reduce reliance on China as a single point in the supply chain.”

While first steps to strengthen supply chains have been taken (refer to our comprehensive Year in Review post from December 2021) and stakeholders are increasingly realizing the severity of the problem we’re facing, many have yet to fully embrace a comprehensive “all-of-the-above” strategy to secure our supply chains.

What we outlined in December of last year remains true today:

“The challenge is too large to address piecemeal. While recycling, substitution, and partnering with allies should be part of any overall comprehensive strategy, strengthening domestic mineral resource development across the entire value chain must be a key focal point of our efforts if we want to ensure reliable access to the critical minerals we need to meet our current and future needs.”

China will certainly not wait for us to catch up.

The post It’s the Processing, Stupid? The Critical Mineral Supply Chain Challenge Visualized appeared first on American Resources Policy Network.

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 Year was “Lockdown.” 

This year, Dictionary.com ended up choosing the term “Allyship,” while Merriam-Webster went with “Vaccine” as their Word of the Year, but ARPN feels that another term would have been at least equally worthy of being anointed “Word of the Year” this year, and that is the term “Supply Chain.”

After all, the supply chain is what everything hinges on these days — our success in the fight against the coronavirus pandemic, the global push towards net carbon zero, buying a new car, putting presents under the Christmas tree, or just minding our day-to-day business in our personal lives.

In 2020, as the coronavirus brought on a global public health crisis, sent markets into turmoil and brought public life to a screeching halt, we were given a first glimpse into the challenges associated with an over-reliance on foreign, and especially Chinese, raw materials, the effects of which were being felt across broad segments of manufacturing.

Today, the extent of our supply chain vulnerabilities has reached crisis levels.

As Bloomberg writer Anjani Trivedi points out in a recent piece, the fact that even Elon Musk, who has up until now been able to navigate many of the challenges associated with securing supply chains for his company, is “now struggling to procure a raw material only available (in the form it needs) in China, for a battery cell that it’s trying to develop in-house, shows how the compounded effect of tariffs and the supply chain crisis are nowhere near over.”

The raw material in the crosshairs of Musk’s concerns according to Trivedi’s piece is natural graphite — a key component of EV battery anodes.

According to Tesla, which has submitted three comments to the U.S. Trade Representative in support of waivers on essential raw materials it currently needs to import, “natural graphite is currently not available in the specifications nor capacity outside of its current suppliers and China that is required” for the company to manufacture batteries in the United States.

While the logistical delays and related issues “may just seem like hiccups from constraints on moving materials around,” writes Trivedi, “they point to a widening issue.”

He elaborates:

“Consider this: The material Tesla needs – graphite – is also sought by other battery makers. In a comment submitted by South Korea’s SK Innovation Co., the company said ‘there is currently not enough infrastructure in the U.S. that can deliver artificial graphite at the quantity and cost’ it requires — similar to Tesla’s submission. What’s more, the firm noted that, because this material is so key, the higher costs will be passed on to U.S. consumers and American companies. If SK can’t get it, then battery investment — a highlight of the U.S.’s EV and manufacturing policy — could struggle.” 

As the headline of Trivedi’s post suggests, “[i]f Tesla’s Got Troubles, Everyone Should Worry” — and the fact that companies have yet to develop long-term strategies, and policy makers, too have been “slow to address the growing challenges, (…) doesn’t bode well for the world’s manufacturing complex.”

The time to focus on securing supply chains is now.  Thankfully, the United States is home to vast mineral resources and respective development projects that are only waiting to unleash their full potential, including for key battery tech metals like Graphite, Lithium, Cobalt, Nickel and Manganese.

Policy makers must now focus their efforts on creating the framework conducive to harnessing this domestic resource potential, and do more than merely pay lip service to the comprehensive “all-of-the-above” strategy they have embraced on paper.

To date, as we have previously lamented, the overall U.S. government plans appear “more geared towards ‘rely[ing] on ally countries to supply the bulk of the metals needed to build electric vehicles and focus[ing] on processing them domestically into battery parts, [as] part of a strategy designed to placate environmentalists.’”

However, while the “friend-shoring” concept is certainly appealing, especially to those policy makers with “not in my backyard (NIMBY)” constituencies, it is insufficient to alleviate our overall supply chain issue. The good news is that we can, in many cases, address the issue domestically, from “soup to nuts,” in  Secretary of Energy Jennifer Granholm’s words. As she told the U.S. Senate earlier this year:

“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.”

And she is right.

We’ll let the dictionary editors lapse in judgment slide — after all the above-referenced ultimate choices for Word of the Year 2021 have their own merits. Ultimately, whether or not the term “supply chain” gets the recognition it deserves, is not important — as long as the issue itself does.

The post Securing the Supply Chain — “If Tesla’s Got Troubles, Everyone Should Worry” appeared first on American Resources Policy Network.