China

Two weeks into the new year, it appears that 2023 will continue the fast-paced tempo we got used to in 2022 when it comes to developments on the critical minerals front.

With Congressional leadership elections – finally – behind us, policy makers in Washington are gearing up to delve into the issues, and, if the newly announced House Committee assignments are any indication, critical mineral resource and supply chain security will rate high on the priority list.

Looking at the overall trend lines in the critical minerals space, earlier this month we outlined the themes we see emerging for this year, as follows:

• A focus on the Super Criticals (see our Year in Review post for more info);
• the growing importance of geopolitics, with China taking center stage and alliances and partnerships continuing to be forged to reduce reliance on Beijing;
• the acceleration of the green energy transition which will require vast amounts of critical minerals;
• …as well as industry’s efforts to sustainably green our future by harnessing the materials science revolution.

It appears the urgency to act is not lost on policy makers, and earlier this week, Rep. Peter Stauber (R-Minnesota) the incoming chairman of the House Natural Resources Committee’s Subcommittee on Energy and Mineral Resources, offered an early glimpse into plans to overhaul the permitting process for energy projects with the new House majority.

Rep. Stauber has introduced the “Permitting for Mining Needs Act,” a bill that seeks to spur domestic critical mineral production to meet national defense, technology and clean energy needs.

Incoming House Natural Resources Committee Chairman Bruce Westerman (R-Arkansas) has vowed to make permitting reform a priority in the 118th Congress, stressing in an interview earlier this week that “[t]he country’s got to come to grips with where we want to go with this electric economy”  and if we do, being “totally dependent on China and other countries like that to supply the materials we need” is not the answer, but rather striving to “produce these elements and minerals on our own.”  

Prioritizing the decoupling from Beijing is also the emerging theme from a vote to establish a Select U.S. House Committee on China, which will consist of nine Republicans and seven Democrats, and will be headed up by Rep. Mike Gallagher (R-Wisconsin), who has framed U.S.-Chinese competition as a 21st Century Cold War and wrote in an op-ed for Fox News that the “first step is to restore our supply chains and end critical economic dependencies on China,” which he noted produced approximately 90% of the world’s rare earth metals, alloys, and permanent magnets in 2019.

Of course, if recent years on Capitol Hill serve as a guide, we can’t expect a high level of bipartisanship of the 118^th Congress overall, but the critical minerals space may continue to be a rare exception.

As a new piece for National Law Review outlines, “there is growing consensus that the U.S. must avoid trading dependencies on foreign sources of fossil fuels, for one, on Chinese critical minerals,” and while reform efforts may face an uphill battle with fundamental disagreements persisting over constraints on environmental reviews and timelines, “[p]ermitting reform will continue to be an issue receiving bipartisan attention,” though “[f]undamental disagreements among Democrats persist on how to put new constraints on environmental reviews and timelines.”

An area “ripe for bipartisanship” according to National Law Review could be “[t]echnologies to trap carbon emissions from power plants and suck carbon directly out of the atmosphere,” with some lawmakers “convinced there will be an appetite to boost carbon removal startups in the next few years.”

Meanwhile, external pressures continue to grow, with geopolitical tensions rising and the green energy transition accelerating.

Here’s hoping Santa put some sneakers under the tree this Christmas, because if this week’s policy announcements in Washington, D.C. are any indication, this first month of 2023, we’ve hit the ground running.

Earlier this week, the Biden Administration unveiled a road map for reducing the transportation sector’s carbon emissions to net-zero by 2050.

Two weeks into the new year, the green energy transition continues to gain steam.  However, as Morgan D. Bazilian of the Colorado School of Mines and Gregory Brew from the Jackson School of Global Affairs at Yale University argue in a new piece for Foreign Affairs, while this general trend represents

“welcome and overdue progress, (…) implementing plans to reduce greenhouse gas emissions could be stymied in part by a material obstacle: the procurement of critical minerals such as lithium, cobalt, nickel, and copper that are essential to clean energy systems.” 

As followers of ARPN well know, 2022 saw several important developments to boost domestic critical mineral supply chains.  (See our Year in Review post here.). And we can’t resist noting that copper – rightly referenced by Bazilian and Brew as an essential material for clean energy applications – is not officially a Critical Mineral, despite ARPN’s consistent case for copper’s criticality.

In any case, with demand outpacing supply for many of the metals and minerals underpinning the pursuit of net zero carbon emissions, Bazilian and Brewer lament that “[t]he way the United States seems intent on obtaining these minerals (…) is myopic.”

They argue that “[t]o win the energy battle of the twenty-first century, the United States must avoid repeating the policy mistakes of past eras and focus on increasing domestic production and advanced manufacturing at home, while establishing secure and resilient supply chains with allies—and even foes—abroad.”

As Bazilian and Brewer outline, the level of supply production needed to implement plans to reduce emissions “does not yet exist. New mines will have to be dug, and processing and refining industrial complexes will need to be built—both exceedingly difficult to do with existing permitting rules. The existing facilities, moreover, are almost entirely outside the United States. The production of critical minerals is concentrated in a handful of countries. 

Against the backdrop of heightened geopolitical competition, they say, “Washington should avoid the counterproductive strategies of the oil era and adopt a varied approach combining domestic policy options with a flexible foreign policy. The goal should be to build a secure position for itself and its allies, reduce dependence on Chinese supplies, and recognize the competitive environment without resorting to brute force or nationalistic tendencies.”

Specifically, they suggest the United States should:

• accelerate the development of its domestic critical mineral resources and streamline the mining permitting process to further expand mining capacity;
• work with allies to develop supply chains for critical minerals;
• and work with allies to regulate critical mineral markets to reduce volatility to encourage investment and prevent disruptions due to price spikes.

To be sure, progress has been made on several fronts. As ARPN outlined in our 2022 recap, President Biden invoked the Defense Production Act to spur domestic resource development and Congress passed the Inflation Reduction Act in August, both of which have sent strong signals to investors and industry that the United States is serious about confronting the critical minerals supply chain challenge head-on.

At the same time, as scholars at the Wilson Center’s Environmental Change and Security Center have pointed out, “the Biden administration’s efforts to free up federal funds for domestic mining activities has highlighted the inherent conflict between accessing the minerals needed for climate action and the administration’s commitment to environmental and social justice.”

Developments like the recent Biden administration halt on progress on the Ambler Road project in Alaska, which proponents say would unlock access to critical minerals and create new jobs, point to conflicting viewpoints between the President’s stated objectives and his Administration’s policy.

Alaska Governor Mike Dunleavy lamented the Administration’s Ambler Mining District decision during a 2022 critical minerals summit held in Fairbanks, which we covered here:

“This administration must speak with one voice. It wants critical minerals, or it doesn’t. It wants the lower energy prices, or it doesn’t.  It wants to create jobs in the U.S. or it doesn’t.  It wants to protect the environment or it doesn’t. It cares about human rights, or it doesn’t. (…) The disjointed federal permitting process doesn’t just hurt Alaskans (…), it hurts every industry, and every state. (…) 

If we set ambitious goals for EVs or renewables without permitting the production of critical minerals here, those minerals will still be produced, they just won’t be produced in here in America or Alaska, they’ll be produced by child labor, potentially, they’ll be produced without environmental standards, potentially, they’ll be produced at the expense of the American worker, to the benefit, potentially, of our adversaries.”  

The stakes are high, and the Wilson Center Environmental Change and Security Program believes that “Critical Minerals and Energy Security” will be one of the top three issues in the coming months as 2023 promises to be a “pivotal moment for U.S. foreign and domestic policy on critical minerals.”

We are here for it, and ARPN will be documenting and analyzing the developments and decisions that will “determine national fortunes and human progress in decades ahead.”

Happy New Year! For most of us, the first week of January means it’s time to go back to the grind after an extended period of family time, food coma, rest and – hypothetically, at least — reflection.  It also means trying shake the brain fog and mental rust that has settled in order to dive [...]

  2022 surely was as fast-paced a year as they come. Didn’t we just throw overboard our New Year’s Resolutions?  We blinked, and it’s time for another review of what has happened in the past twelve months. So with no further ado, here is ARPN’s annual attempt to take stock of what has happened on the [...]

As geopolitical and economic stakes mount, the urgency to build out secure critical mineral supply chains is increasingly resonating with policymakers around the world.  Acknowledging that “[c]ritical minerals are not just the building blocks of clean technology like solar panels and electric vehicle batteries – they are a key ingredient for creating middle class jobs and growing [...]

As geopolitical tensions continue to mount, and China tightens its reins on its critical mineral supply chains, U.S. policy makers are stepping up their efforts to secure domestic supply chains. The latest case in point: Sen. Dan Sullivan’s (R-Alaska) and Mitt Romney’s (R-Utah) just-introduced “Critical Mineral Independence Act of 2022,” legislation aimed at reducing the United States’ over-reliance on [...]

As geopolitical tensions continue to mount and supply chain challenges loom large across many sectors, Beijing is tightening reins on its critical mineral supply chains. According to news reports, the Chinese Ministry of Industry and Information Technology announced plans to increase its supervision of China’s lithium battery supply chain, which, according to the ministry, is “severely unbalanced.” [...]

Within days of Canada outlining new investment stipulations for state-owned entities aimed at protecting the country’s critical minerals sector, the Canadian government last week told three Chinese resource companies to divest their interests in Canadian critical mineral firms. Basing the decision on “facts and evidence and on the advice of critical minerals subject matter experts, Canada’s [...]

It’s Halloween – time for trick or treating, spooky storytelling and scary visuals.  Here’s a real scary one if you’re still looking to frighten the policy wonks among your Halloween party guests. Courtesy of our friends at Benchmark Mineral Intelligence, it’s an infographic that should send a serious chill down policy makers’ spines, and it’s not even gory: While [...]

With pressures rising on critical mineral supply chains as nations rush to flesh out environmental initiatives before the COP27 climate change summit kicks off in Sharm El Sheikh next month, the stakes for the United States and its allies to “decouple” from adversary nations — in the new U.S. National Security Strategy, read:  China — may have gotten even [...]