American Resources Policy Network
Promoting the development of American mineral resources.
  • A Frightening Graphic Just in Time for Halloween: Is the Anode Our Achilles Heel When it Comes to Building out a Battery Supply Chain Independent of China?

    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:

    Image 10-31-22 at 10.59 AM

    While stakeholders have taken some important steps to decouple from China in the wake of critical mineral supply chain wake-up calls against the backdrop of the coronavirus pandemic and rising geopolitical tensions, we are still — and likely will be for a while — at the mercy of China when it comes to securing our EV battery supply chains, which are at the core of the green energy transition.

    As Benchmark outlines,

    “While most of the world’s lithium, nickel, cobalt, and manganese for batteries is mined outside of China, the majority of all critical minerals for the battery supply chain are further refined and processed in China.

    With the exception of mining, China controls at least half of the supply from every step needed to make a lithium ion battery.”

    As if “at least half” wasn’t scary enough, let’s take a look at graphite — a key ingredient for the anode side of Lithium-ion batteries:  According to Benchmark Mineral Intelligence, China mines 64% of natural flake graphite, and it has a “monopoly on converting [it] into the spherical graphite needed for anodes.” 

    It gets worse from there. Says Benchmark Mineral Intelligence:

    “In 2022, Benchmark forecasts 70% of all batteries will be made in China. This is supported by strong control of the midstream, with a near monopoly over anode production and over three-quarters of cathode production.”

    Right now, according to the U.S. Geological Survey, the U.S. is 100% import-dependent for graphite.  But that’s not for lack of known graphite resources.  As USGS noted in February 2022 in its updated U.S. Mineral Deposit Database, Graphite One’s Graphite Creek deposit near Nome, Alaska is America’s largest graphite deposit.  If U.S. Government efforts to develop an American-based EV and lithium-ion battery supply chain have any hope of succeeding, looking for ways to help projects like Graphite Creek down the path to production will be, in a word…. Critical.

    Until then, China’s battery anode dominance could be the West’s Achilles heel in the green energy transition – in defense planners parlance, a potential “single point of failure”:  irrespective of whether we succeed in developing multiple minerals and metals for the battery cathode, if we can’t meet anode material needs – and we cannot without natural graphite — we can’t build a rechargeable battery independent of China.  Scary thought, indeed.

    The sourcing provisions in the energy passages of the recently passed Inflation Reduction Act, coupled with the recently announced grants to “supercharge” U.S. EV battery and electric grid supply chains are important steps towards mitigating that potential single point of failure.  However, considering the long timelines for permitting for mining and processing projects, decoupling and building out a battery supply chain independent of China will warrant a concerted effort by stakeholders and policy makers to decouple from China.

    Are we scared enough to take on the challenge?

  • A Look North – A Canadian Perspective on China’s “Encroachment” on the Critical Minerals Industry

    In a new piece for Canada’s Globe and Mail, Niall Mcgee discusses China’s quiet but systematic campaign to corner the critical minerals segment in Canada and stakeholder reactions in Ottawa, or more precisely, the lack thereof.

    Citing the 2019 acquisition of the Tanco Mine in Manitoba, known as one of the world’s few sources of cesium as well as highest-grade lithium, by the Chinese Sinomine Resource Group, which earlier this year began shipping lithium produced at Tanco back to China to feed the country’s expansive EV industry, Mcgee laments that there has been little reaction from Ottawa:

    “Although Ottawa has made clear that it does not want to be beholden to a hostile foreign power for critical minerals such as lithium, so far there has been little in the way of action from the federal government to prevent that from happening.”

    Mcgee cites mining investor and activist shareholder Peter Clausi, who goes as far as calling the Canadian federal government, which could have initiated a review of the acquisition on national security grounds, “morons” for failing to do so:

    “It’s [i.e. the Tanco Mine is] known for having the world’s highest grade lithium. The grade is so high that nobody had the technology to process it. And the morons let it go,” Clausi said.

    As ARPN outlined in our discussion of the approval of the sale of Canadian lithium developer Neo Lithium Corp to Chinese state-owned Zijin Mining Group Ltd., in the process of which the Canadian government decided not to review the takeover on national security grounds:

    “Foreign takeovers of Canadian companies are subject to an initial security screening by the government.  If the initial screening concludes that the takeover constituted a threat to Canada’s national security, it would trigger a more formal review under Section 25.3 of the Investment Canada Act, and the deal could be blocked.”

    In the case of Neo Lithium’s project – the 3Q Mine – the Canadian Government argued that “Canada was unlikely to benefit from lithium produced from Neo’s project, because it was located far away, in Argentina.” However, the project could have played an important role in supplying Canada’s lithium needs at a time when the country is not extracting the material within its own borders.

    The same could be said for the Tanco deposit.  As Mcgee elaborates, similar scenarios unfold for other metals and minerals:

    “Canada has similar also-ran status when it comes to cobalt. This country produces only small amounts of the vital battery metal input, while China controls about 70 per cent of the market. China is even more dominant in graphite, with an 80-per-cent lock on the market. 

    And while Canada is a major miner of nickel, another battery metal, it has no refineries that can process it for the battery industry.”

    He cites Jeffrey Kucharski, adjunct professor at Royal Roads University and former assistant deputy minister of Alberta’s Department of Energy, who asked during parliamentary proceedings on the Neo Lithium deal:

    “How can Canada build a lithium supply chain, or any other critical mineral for that matter, when it allows the assets of Canadian companies to be acquired by a country that seeks to cement its dominance in this sector?” 

    As ARPN previously outlined,

    “the development ties into the broader North American context of the United States and Canada having formalized a joint action plan on critical minerals in 2020 which included commitments by both governments to strengthen North American battery material supply chains against the backdrop of China’s ever-tightening grip on global supplies.

    A stronger focus on critical mineral resource security through the prism of national security is certainly warranted, not just for our Canadian friends, but also from a U.S. perspective.

    As Tsvetana Paraskova notes in a piece for Oilprice.com, ‘while the Administration was reviewing supply chain issues and vulnerabilities to its demand for critical minerals, China is moving in on Africa and South America to strike alliances and lend money to mineral resource-rich African countries, while Russia is thought to be providing shadow ‘security services’ in some African nations with a mercenary organization with links to the Kremlin.’

     Followers of ARPN know all too well that as the green energy transition accelerates, we will be facing significant critical mineral resource shortfalls.  For the United States (and for our close allies), the time to act is now. As Paraskova concludes, ‘(…) otherwise, America’s clean energy goals and hi-tech and automotive supply chains could depend on China.’

    The energy provisions in the just passed Inflation Reduction Act, coupled with a prior invocation of the Defense Production Act for the “Battery Criticals” – lithium, cobalt, graphite, nickel and manganese — are indications that the urgency of the situation has begun to resonate with U.S. policymakers.

    Of course, as we cautioned in our latest piece on the Inflation Reduction Act, “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.”

    However, there is good reason to hope 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,” all of which would represent a “critically important leap forward to build the secure, responsible industrial base our economy and national security needs,” in the words of General John Adams, U.S. Army brigadier general (ret.).

  • 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 [...]
  • 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 [...]
  • Securing the Supply Chain — “If Tesla’s Got Troubles, Everyone Should Worry”

    Every December, editors of the English-speaking world’s dictionaries release their choices for Word of the Year, a “word or expression that has attracted a great deal of interest over the last 12 months.” 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 [...]
  • 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 [...]
  • Tesla’s 20 Million Vehicles by 2030 Goal in Context

    Innovation. Disruption. That’s what Elon Musk and Tesla have become synonymous for — and for good reason. A recent claim made that Tesla would be able to reach production of 20 million vehicles per year before 2030, however, may be more of a stretch goal than a realistic number, as staff at Mining.com has recently [...]
  • Europe Forges Ahead With Battery Gigafactory Buildout As U.S. Still Struggles to Get Off Starting Block

    The current coronavirus pandemic may have thrown a wrench into the gears of many industries, but — against the backdrop of skyrocketing materials supply needs in the context of the green energy transition — Europe continues to forge ahead with the buildout of its large-scale battery gigafactory capacity.  According to London-based Benchmark Mineral Intelligence, whose [...]