demand

The Russian invasion of Ukraine and subsequent additional supply chain challenges have prompted the European Union — already grappling with strained supply chains in the wake of the coronavirus pandemic — to step up its critical minerals game.

During her State of the Union address on September 14, European Commission President Ursula Von der Leyen announced plans to introduce legislation to identify potential strategic critical raw material projects along the supply chain and build up reserves in areas where supply is at risk.

Highlighting that almost 90% of rare earths and 60% of lithium are currently being processed in China, Von der Leyen said “[a] single country currently dominates almost the entire market. We must avoid becoming dependent again, as with oil and gas.”

She added:

“We know this approach can work. Five years ago, Europe launched the Battery Alliance. And soon, two third of the batteries we need will be produced in Europe.

Last year I announced the European Chips Act. And the first chips gigafactory will break ground in the coming months.”

The announcement is more than timely.  The European Union expects its own demand for rare earths alone to increase fivefold by 2030.  And the latest analysis by ARPN’s friends at Benchmark Mineral Intelligence finds that more than 300 new mines for graphite, lithium, nickel and cobalt would “need to be built over the next decade to meet [global] demand for electric vehicle and energy storage batteries,” and that is already taking into account the recycling of raw materials — without factoring in closed loop solutions, the number shoots up to almost 400.

In the U.S., the energy provisions in the recently passed Inflation Reduction Act, following on the heels of the invocation the Defense Production Act for the “battery criticals” lithium, cobalt, nickel, graphite and manganese, are expected to send a strong signal to investors that the United States, too, is serious about “building the secure, responsible industrial base our economy and national security needs.”

However, many issues remain.

One of them is the “costly and inefficient permitting process” making it “difficult for American businesses to invest in the extraction and processing of critical minerals in the United States,” as Ford Motor Company’s chief government affairs officer Christopher Smith lamented in a recent letter to the U.S. Department of Interior.

The other challenge is an “inter-departmental tug-o-war” that hinders actual progress.  As Shane Lasley  wroterecently for North of 60 Mining News:

“While the departments of Commerce, Defense, and Energy are forging ahead with programs and investments aimed at ensuring America has the minerals and metals needed to support the clean energy objectives outlined by the White House, and enabled by the Bipartisan Infrastructure Law and Inflation Reduction Act, DOI is pumping the breaks on a domestic project that would produce the requisite raw materials.”

It remains to be seen if stakeholders on both sides of the Atlantic are able to advance their critical mineral ambitions, but one thing, in the words of Forbes contributor Wal van Lierop, is clear: “[W]ithout massive investments in base metals and key minerals, Europe and North America will fail to meet their carbon emission targets and face a new form of energy insecurity.” 

Amidst the global push towards carbon neutrality, “Critical Minerals” has become a buzzword.  As the green energy transition has gone mainstream and electric vehicles and renewable energy sources dominate the news cycle, so has talk about growing demand for some of the specialized materials underpinning this shift — most notably the Rare Earths, and the battery tech metals Lithium, Cobalt, Graphite and Nickel.   A little lost in the media shuffle, though no less important, is Copper — perhaps the unsung hero of the green energy transition.

Less flashy and headline-grabbing than some of its tech metal peers, this mainstay mineral deserves far more credit and attention than it is currently getting.  Followers of ARPN will know that we have long touted the versatility, stemming from its traditional uses, new applications and Gateway Metal status.

Copper is also an irreplaceable component for advanced energy technology, ranging from EVs over wind turbines and solar panels to the electric grid.   The manufacturing process for EVs requires four times more Copper than gas powered vehicles, and the expansion of electricity networks will lead to more than doubled Copper demand for grid lines, according to the IEA.

A recent graphic by Visual Capitalist depicts the Copper intensity of the energy transition with a view towards solar and onshore and offshore wind energy technology:

Add in Copper’s Gateway Metal status — the processing of the metal yields access to a host of co-products essential to “manufacturing the advanced technologies that will power our economy for generations to come”  such as Cobalt, Tellurium, Molybdenum, Rhenium, Arsenic and REEs  — and a 2019 mining executive’s projection that “[t]he world will need the same amount of copper over the next 25 years that it has produced in the past 500 years if it is to meet global demand.

Recent developments in Washington, D.C. — movement on a bipartisan infrastructure package and announcements of new EV goals and fuel efficiency standards — will only add to the outlined Copper demand scenarios.

And the challenge is not just mining, but also processing, as Laura Skaer, a member of the board of directors of the Women’s Mining Coalition and former director of the American Exploration & Mining Association, outlined in a recent piece for Morning Consult:

“Last year, the United States imported 37 percent of the copper we used. China already refines 50 percent of the world’s copper and the United States only refines about 3 percent. National security experts have warned that relying on China for critical supply-chain materials like refined copper poses a serious threat to America’s national security interests.”

The United States Government failed in 2018 to include Copper in its official Critical Minerals list, a faux pas the Canadian government did not commit with the release of its own Critical Minerals list earlier this year, which included Copper along with fellow key Gateway Metals Nickel and Zinc in its list of 31.

Meanwhile, the Biden Administration’s 100-Day Supply Chain Review highlights Copper as an integral component of Lithium-ion battery technology, in the context of being what we have called a “gateway metal” to other critical materials, and for its “use across many end-use applications aside from lithium-ion cells, including building construction, electrical and electronic products, transportation equipment, consumer and general products, and industrial machinery and equipment.” 

Here’s hoping that the greater prominence given to Copper — both as a standalone material and Gateway Metal — by the White House 100-day report is an indication that a forthcoming updated U.S. Critical Minerals List will acknowledge the metal’s ever-growing importance.  Until then, Copper will remain one of the most “Critical Non-Criticals,” as we note in ARPN’s recent report, Critical Mass.

In a new piece for Forbes, Jude Clemente, principal at JTC Energy Research Associates, LLC, outlines the size and scope of the ambitious climate goal of electrification to fight climate change, and discusses the underlying challenges associated with the shift. Clemente argues that the likely surge in electricity demand as the world seeks to decarbonize [...]

While we’re still waiting for policy makers and other stakeholders to take further action, in 2018 an important step was taken to set the stage for mineral resource policy reform with the release of the Department of Interior’s List of 35 Minerals Deemed Critical to U.S. National Security and the Economy. Throughout the drafting stage [...]

In 2007, a new mineral found in Serbia made headlines around the world. “Kryptonite Discovered in Mine” – wrote the BBC about the discovery of a material the chemical formula of which – sodium lithium boron silicate hydroxide – happened to match the one of the famed kryptonite stolen by Lex Luthor from a museum in the [...]

Cobalt is a rising star among critical minerals, in large part because of its key role in battery technology.  However, that’s hardly the only reason. The ongoing materials science revolution has produced a new long-term use for Cobalt that may prove to be a technological breakthrough: A California-based company has announced that it has found [...]

In recent weeks, we have seen a flurry of articles and commentaries in national publications discussing reforms to address our ever-growing reliance on foreign mineral resources.  The two most recent examples are member of the ARPN expert panel Jeffery A. Green’s piece in Real Clear Defense entitled “Dangerous Dependence on China for Critical Minerals Runs [...]

As the race for the metals and minerals driving the electric vehicle revolution heats up, and China continues to jockey for pole position, Sweden is tossing its hat into the ring.  According to recent media reports, the Swedish government has earmarked 10 million kronor ( roughly one million Euros) to explore the option of digging [...]

Last month, the American Geosciences Institute ran a webinar entitled “Tracking the Global Supply of Critical Materials.”  Speakers for the event, which discussed “efforts to gather information and develop tools that can be used to ensure a secure national and global supply of mineral resources, and identify and quantifying vulnerabilities in this supply, among others,” [...]

As we have outlined, last month’s executive order on critical minerals could have far-reaching implications for our national security and economic wellbeing.  If you needed a case in point – look no further than Lithium. One of the hottest commodities of the day, Lithium, as ARPN expert panel member and managing director of Benchmark Mineral [...]