American Resources Policy Network
Promoting the development of American mineral resources.
  • Bolstering the Domestic Supply Chain for “Battery Criticals” – A Look at Cobalt

     In this post, we continue our review of the “battery criticals” (lithium, cobalt, graphite, nickel and manganese) against the backdrop of the just-released 2023 iteration of the USGS Mineral Commodity Summaries.  Next up:  cobalt.

    With the material accounting for up to 20% of the weight of the cathode in a typical lithium-ion EV battery, cobalt was considered the highest material supply chain risk for electric vehicles by the U.S. Department of Energy in 2021.

    While geopolitical challenges and rising demand in the context of the green energy transition are a factor for the supply scenario for all battery criticals, the cobalt conundrum differs in that more than 70% of the world’s material is supplied by the Democratic Republic of Congo, and labor practices in the country have long been scrutinized by the global community, including the United States.

    In 2009, the Department of Labor first placed cobalt, specifically referred to as “cobalt ore” on its List of Goods Produced by Child Labor or Forced Labor, and a year later, Congress included language in the Dodd-Frank financial law targeting the sale of conflict minerals from the DRC to address profits from commodities mined in Congo, but stopped short of including cobalt, and only focused on gold, tin, tantalum and tungsten.

    In 2016, Amnesty International released a report on child labor at the DRC’s so-called “artisanal” informal mine sites, increasing international scrutiny, but fast forward to 2022, and child labor persists in the DRC, prompting the U.S. Department of Labor to include lithium-ion batteries into its “List of Goods Produced by Child Labor or Forced Labor” – a list of 158 goods from 77 countries assumed to be produced in violation of internationals standards regarding child or forced labor.

    The added scrutiny of labor practices for cobalt also increased urgency for U.S. policy and other stakeholders to build out a North American supply chain for “battery criticals” lithium, cobalt, graphite, nickel and manganese — which already has received fresh impetus with the passage of the sourcing requirements contained in the statutory language on EV credits in the recently-passed Inflation Reduction Act.

    (ARPN has already outlined current U.S. efforts to this effect for graphite and manganese in our recent posts.)

    After years of inaction on the domestic development front, U.S.-based cobalt projects have begun to move forward.

    According to USGS, “in 2022, the nickel-copper Eagle Mine in Michigan produced cobalt-bearing nickel concentrate. In Missouri, a company produced nickel-copper-cobalt concentrate from historic mine tailings and was building a hydrometallurgical processing plant near the mine site. In October, commissioning began at a cobalt- copper-gold mine and mill in Idaho, where cobalt concentrate will be produced.”

    While it “will be a while before we can actually say that this is going to be a growth industry,” as Brad Martin, director of the RAND National Security Supply Chain Institute says, the opening of the Idaho mine operated by Jervois Global is a “geopolitically significant” development for the United States and a small first step away from relying on materials sourced from a country using child labor practices.

    However, as Gregory D. Wischer and Jack D. Little with Westwin Elements outlined in a recent op-ed for the Idaho State Journal, while Jervois’s mine will produce roughly 2,000 metric tons of cobalt, Idaho’s other untapped cobalt reserves “will sit uselessly dormant unless U.S. government policy changes — and, even if tapped, this cobalt ore will be shipped overseas for refining.”

    They added, in a storyline familiar to followers of ARPN:

    “U.S. government policy has long influenced America’s cobalt industry. For instance, during the Cold War in the 1950s, Calera Mining Co. expanded mining and refining in Idaho’s Blackbird district in exchange for U.S. government purchases of its refined cobalt. However, as U.S. government support dissipated, permitting timelines lengthened, and cobalt prices cascaded, U.S. cobalt mining evaporated. 

    Consequently, China today controls approximately 35 percent of global cobalt mining production — given Chinese ownership of 50 percent of cobalt mining production in the Democratic Republic of the Congo — and more than 70 percent of global cobalt refining production.”

    On the processing side, Canadian Electra Battery Materials is set to launch cobalt refining operations this year, but North American efforts — and in particular U.S. efforts — are still few and far in between because domestic cobalt mining and refining continue to face significant regulatory and financial hurdles, including lengthy permitting times that in the U.S. can range between seven and ten years.

    Add Wischer and Little:

    “Some people may argue that the United States can rely on mined and refined cobalt from ostensibly ‘friendly’ countries. Yet, as the COVID-19 pandemic displayed, even allies like Australia will protect their own supply chains and block critical exports to the United States during crises. Future events, such as wars, trade disputes and natural disasters, could similarly disrupt global cobalt supply chains. For instance, a possible U.S.-China conflict over Taiwan would likely delay U.S. cobalt imports, with consequences magnified by the defense industrial base’s increased cobalt demand for the war effort. In short, cobalt supply chains dependent on any foreign countries are insecure and risky.”

    As such, cutting red tape for domestic cobalt projects like Jervois’s operations in Idaho, as well as supporting and incentivizing refining projects should range high on U.S. stakeholders’ priority list in the 2023 and beyond.

  • Groundhog Day 2023 – Another Year of Critical Mineral Resource Dependence? USGS Releases Annual Mineral Commodity Summaries Report

    Earlier this week, USGS released its latest iteration of the annual Mineral Commodity Summaries, a much-cited report that every year gives us a data-driven glimpse into our nation’s mineral resource dependencies.

    It’s fitting that ARPN reviews the report on Groundhog Day, February 2nd, because just like in the Bill Murray classic movie, in which the clock jumps back to the same day all over again every morning, the Critical Mineral movie appears to bring us back to a situation of ongoing deep dependency on foreign sourced metals and minerals every year – at least in recent memory.

    While there are some changes from last year’s report, the number of metals and minerals for which we are 100% import dependent dropped by two from 17 to 15, the only significant change here is a drop for Vanadium, with recalculations made for overall import reliance suggesting that its inclusion in the 100% segment has been overstated for several years. (The drop for nepheline syenite from 100% to greater than 95% is less significant, with the numerical drop small and material not featuring on the critical minerals list.)

    And for all the talk about reducing the United States’ resource dependence in recent years,  a deeper look at the chart depicting U.S. Net Import Reliance — or the “Blue Wall of Dependency,” as we have dubbed it based on the many blue bars showing our significant degree of import dependence, reveals that the number of metals and minerals for which we are 50% or more import-dependent has even gone up over last year — with the new report pegging it at 51 versus 47 in 2022.

    When cross-referencing the U.S. Net Import Reliance chart with the 2022 Final list of Critical Minerals, the United States was 100% net import reliant for 12, and an additional 31 critical mineral commodities (including 14 lanthanides, which are listed under rare earths) had a net import reliance greater than 50% of apparent consumption.

    Once more, we can’t help but observe that this represents a stark contrast to our import reliance for metals and minerals in 1984, when we were 100% import reliant for just 11 mineral commodities.

    A few changes for individual metals and minerals included in the report are notable and significant, particularly in the context of the accelerating global green energy transition:

    For the Rare Earths, a key group of tech metals underpinning 21st Century technology and the accelerating green energy transition, our import reliance had dropped from 100% in the 2021 report to “greater than 90%” in the 2022 report. It is now back up to “greater than 95%”, and the rare earth concentrate being extracted in the U.S. currently sent to China for separation.  Once again, a single link lacking in a supply chain continues U.S. dependency.

    For Lithium, perhaps the most frequently cited battery tech mineral, and Cobalt, another one of Lithium’s “battery critical” peers, U.S. import reliance stayed the same at “greater than 25%” for lithium, and Cobalt at 76% respectively.

    For Graphite and Manganese, both battery criticals – the USGS report shows both still pegged at an unchanged 100% import reliance.

    For Nickel, the final battery critical and a new element on the 2022 Critical Mineral List, import-reliance jumped from 48% last year to 56% in this year’s report.

    In upcoming posts, ARPN will focus on each of these battery criticals, and the U.S.-based projects working to urgently needed new supply into production.

    As in previous iterations of the report, China continues to be the elephant in the data room. And against all pledges in recent years for the United States to reduce import reliance on supplies from China, the 2022 Mineral Commodity Summaries lists still China an unchanged 25 times as one of the major import sources of metals and minerals for which our net import reliance is 50% or greater – and recent developments in China show that the country has no intention of loosening its grip on the critical minerals supply chain [see our recent posts on Chinese resource policy here].

    Owing to the growing focus on critical minerals on the part of U.S. policy stakeholders, this year’s Mineral Commodity Summaries report features an expanded chapter on developments in the critical minerals realm, identifying trend lines, and supply chain security and U.S. government critical minerals initiatives as well as critical mineral investments.

    While the urgency of the need to secure critical mineral supply chains has registered with stakeholders over the past few years, USGS’s findings underscore once more that supply chains in the 21st Century are extremely complex and meaningful change takes time – and the developments of 2022 ranging from increased resource nationalism in the Southern hemisphere over war in Ukraine to rising geopolitical tensions have not made untangling supply chains any easier.

    In Bill Murray’s movie, it took the protagonist several years to realize how to change behavior to break the cycle.  We know by now that to break our cycle of resource dependence, it will take a comprehensive “all of the above” approach to critical mineral resource policy – and stakeholders have come to realize this and have increasingly embraced the concept.  We continue to stand by what ARPN’s Dan McGroarty stated during a congressional hearing in 2019 – “we can’t admire the problem anymore. We don’t have the luxury of time.”

    If we act swiftly and comprehensively, there may just be a chance that we will wake up twelve months from now not to another Groundhog Day, but to a 2024 Mineral Commodity Summaries that paints a picture of reduced resource dependence.

  • 2022 – ARPN’s YEAR IN REVIEW

      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 [...]
  • DoL “List of Goods Produced By Child Labor or Forced Labor” Zeroes in on Lithium-Ion Batteries, Adding Pressures for Already Strained Material Supply Chains

    Pressures on already strained battery material supply chains are mounting, and not just due to geopolitical tensions and rising demand in the context of the green energy transition. The U.S. Department of Labor has included lithium-ion batteries into its “List of Goods Produced by Child Labor or Forced Labor” – a list of 158 goods from 77 [...]
  • A Visual Reminder: Breaking Down the EV Battery

    In case anyone needed a visual reminder of how the EV revolution is adding fuel to the fire of the overall critical minerals challenge we’re facing, Visual Capitalist has put together a handy graphic depicting the material inputs for EV batteries. Here’s a snippet – for the full graphic and context, click here. The infographic [...]
  • Time to Address the “Gaping Hole” in America’s Efforts to Secure Critical Mineral Supply Chains

     “The historic shift to electric vehicles will give the U.S. a fresh chance to achieve energy independence, but it will require complex strategic moves that won’t pay off for years,” writes Joann Muller in a new piece for Axios. A look at the numbers reveals that despite a noticeable push towards strengthening U.S. supply chains (we’ve featured [...]
  • Presidential Determination Invokes Title III of Defense Production Act to Encourage Domestic Production of Battery Criticals

    A confluence of factors — pandemic-induced supply chain shocks, increasing resource nationalism in various parts of the world, and Russia’s invasion of Ukraine extending into its second month — has completely altered the Post-Cold War geopolitical landscape and mineral resource security calculus. Responding to the resulting growing pressures on critical mineral supply chains and skyrocketing [...]
  • 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 [...]
  • U.S. Senators to President Biden: With Stakes Raised, Time to Invoke the Defense Production Act to Secure Critical Mineral Supply Chains

    Already severely strained by the coronavirus pandemic, global critical mineral resource supply chains have taken another hit with Russia’s full-fledged invasion of Ukraine.  With no de-escalation of hostilities in sight, Western nations, including the United States, are stepping up their efforts to bolster domestic supply chains, not only for oil and gas, but also for non-fuel [...]
  • DoE Chapter of 100-Day Supply Chain Report Calls for Immediate Investment in “Scaling up a Secure, Diversified Supply Chain for High-Capacity Batteries Here at Home”

    The Biden Administration made clear early on that it is committed to pursuing a low-carbon energy future, and battery technology is a key driver underpinning the shift away from fossil fuels. Just a few weeks ago, when touting his infrastructure package at Ford’s electric vehicle plant in Dearborn, President Joe Biden declared: “The future of [...]