critical minerals

As U.S. stakeholders grapple with the question of how to bolster U.S. supply chains for the battery criticals and other critical minerals amidst skyrocketing demand scenarios and growing geopolitical pressures, our allies are taking steps of their own to unleash their mineral potential.

Looking north, in order to “secure Canada’s place in important supply chains with other countries and [to] implement a just and sustainable Critical Minerals Strategy,” the Trudeau government 2022 budget blueprint released earlier this month proposes up to $3.8 billion over eight years beginning in the fiscal year 2022-23 in “significant investments, while working closely with affected Indigenous groups, to contribute to the development of a domestic zero-emissions vehicle chain.”  

Meanwhile, across the globe, the Australian Federal Government announced its 2022 Critical Minerals Strategy in March of this year, building on the first Critical Minerals Strategy initially published in 2019.  According to the Australian Government Department of Industry, Science, Energy and Resources, the revised strategy “has a vision to put Australia at the centre of meeting the growing demand for critical minerals. It will underpin our prosperity and security by improving access to reliable, secure and resilient supplies of critical minerals.” By de-risking projects, creating an “enabling” environment and strengthening international partnerships, the Australian government aims to make Australia a “global critical minerals powerhouse by 2030, delivering stable supply, sovereign capability and regional jobs and growth to Australia.”

In keeping with the Biden-Administration’s emphasis on leveraging international partnerships with close allies, the United States has continued to work closely with Canada and Australia to strengthen and formalize mineral resource cooperation. Most recently, Australia’s Minister for Trade, Tourism and Investment Dan Tehan and U.S. Secretary of Commerce Gina Raimondo met in Washington, D.C. at the end of March for the inaugural Australia-US Strategic Commercial Dialogue (AUSSCD) to discuss the accelerating green energy transition and related mineral resource challenges.  The executive-level roundtable highlighted the importance of developing shared approaches to ESG and traceability standards and working with other like-minded partners to build resilient supply chains.

These developments are encouraging, but tempting as it may be – particularly in light of the pervasive nature of the “paradox of the green revolution”, as Reuters columnist Andy Home called the paradox that “public opinion is firmly in favour of decarbonisation but not the mines and smelters needed to get there” – we must not be complacent and rely too much on friend-shoring.

With the advent of political campaign season, the balancing act to reconcile green credentials with the acknowledged need for domestic resource development will not get any easier for the Biden Administration.  “Friend-shoring” is certainly an important pillar of the “all-of-the-above” concept, but, in light of mounting demand and ever higher stakes with Russia’s war on Ukraine and rising resource nationalism, it is insufficient to alleviate our overall problem.

Thankfully, as ARPN has consistently argued, “[t]he good news is that courtesy of the materials science revolution, industry can harness new technologies to do expand our mining infrastructure responsibly and sustainably – (…) and as even Energy Secretary Jennifer Granholm acknowledged [last] summer during a U.S. Senate hearing:  ‘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.’” 

They say desperate times call for desperate measures, and if you needed any more indications that the state of supply chain security has reached crisis level, consider headlines like this one:

 “Tech firms rip apart NEW washing machines so they can harvest their computer parts in a bid to beat the global microchip shortage”.

The news surfaced during an earnings call with the CEO of a Netherlands-based company, who told shareholders that a “major industrial conglomerate has resorted to buying washing machines and tearing out the semiconductors inside for use in its own chip modules.”

Chip shortages first began making headlines in the wake of the coronavirus pandemic, but shortages are expected to persist for the foreseeable future, as demand for semiconductors continues to increase across industry sectors, particularly in light of the acceleration of the “electrification of everything.”   

The automobile industry is a case in point.  As the EV revolution continues to gain steam, automakers, according to Bloomberg, have “yet to overcome a semiconductor crunch that has challenged their operations for over a year,” prompting some corporations to trim output targets or alert shareholders to expected “negative effects from chip scarcity.”

It is for good reason that the Biden Administration dedicated an entire chapter to “semiconductor manufacturing and advanced packaging” in its 100-Day Supply Chain Review last summer  (- see our coverage of the report here -), in which the Administration underscored that [d]ue to the extremely complex and geographically dispersed nature of the semiconductor supply chain (which results in the typical semiconductor production process spanning multiple countries and products crossing international borders up to 70 times) there are many access points for supply chain vulnerabilities along the way.

Several steps have been and continue to be taken to shore up semiconductor supply chains, and thankfully, the U.S. is not only in the fortunate position to have known resources for both Gallium and Indium (via deposits in Texas and Alaska, respectively).   Both metals can also be “unlocked” in the “co-product” development of their Gateway Metals Aluminum (for Gallium) and Zinc and Tin (Indium) — another reason stakeholders should focus more on the inter-relationship between Gateway Metals and the critical co-products they unlock.

Of course, as followers of ARPN well know, our critical mineral supply chain challenges extend far beyond the materials required for the manufacture of semiconductors, and as such, this complex challenge can only be addressed in the context of a comprehensive “all of-the-above” approach across the entire value chain — from mine to manufacturing. But, as we have frequently pointed out: “the first word in supply chain is ‘supply,’” so any effort must begin at the beginning – with the responsible sourcing of the materials needed to underpin 21st Century technology.

Recycling parts can and must be part of any comprehensive solution. But when industry has to resort to “cannibalizing” new consumer products to manufacture others, the situation is truly dire, and warrants concerted action.

After all, ripping microchips out of brand new washing machines is not exactly what we had in mind by “clean energy.”

 “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 [...]

Stressing that the “The United States depends on unreliable foreign sources for many of the strategic and critical materials necessary for the clean energy,” specifically for EV and large capacity batteries, U.S. President Joe Biden invoked the Defense Production Act (DPA) to accelerate buildout of domestic supply chains via Presidential Determination earlier this month. While, as Reuter columnist Andy [...]

Last week, against the backdrop of mounting pressures on U.S. critical mineral supply chains, U.S. President Joe Biden invoked the Defense Production Act (DPA) to encourage domestic production of the metals and minerals deemed critical for electric vehicle and large capacity batteries. The move is a sign that “America is finally taking the battery metal shortage seriously,” as the [...]

Bearing testimony to a growing awareness of our nation’s critical mineral resource challenge, the U.S. Senate Committee on Energy and Natural Resources held a full committee hearing on domestic critical mineral supply chains earlier this week. The witness panel at the hearing, which E&E Daily described as “a largely pro-mining hearing that could serve as a blueprint for a potential deal [...]

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 [...]

Pandemic induced supply chain shocks, increasing resource nationalism in various parts of the world, and Russia’s invasion of Ukraine exactly one month ago have brought the stakes for securing critical mineral resource supply chains to a whole new level. The emerging geopolitical landscape has sent countries scrambling to devise strategies to not only ensure steady [...]

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 [...]

 While in the early days of Russia’s invasion of Ukraine, concerns over how the war would impact global supply chains were mostly focused on oil and natural gas, it quickly became apparent that the ramifications of drawn-out hostilities would stretch far beyond the global oil and gas sector. With Ukraine considered the “breadbasket of Europe,” Russia’s invasion [...]