-->
American Resources Policy Network
Promoting the development of American mineral resources.
  • China Tightens Reins On Its Critical Mineral Supply Chains

    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.”

    While China accounts for roughly 60% of the world’s lithium chemical supply and has secured a “position of strength within the industry” and “we [i.e. the West] have been very slow to react to that,” as American Lithium CEO Simon Clark has phrased it, Chinese EV producers have been registering financial losses in the face of increasing battery costs.   In an effort to counterbalance the undercutting of their profits, the ministry is looking to “curb hoarding, price gouging and unfair competition” in the supply chain – a move that is welcomed by China’s state-owned automakers, who have been calling for a government crackdown on the hoarding of battery materials.

    China’s moves in the lithium sector align with other policy shifts in the resource space.  Earlier this summer, Beijing established a new state-owned group to serve as a consolidated hub for the country’s iron ore trade with a registered capital of 20 billion yuan ($3 billion).  China Mineral Resources Group’s mandate covers mining, ore processing and trading.  As mining.com outlines, the company’s creation was “encouraged and closely monitored” by senior government officials in Beijing.   These Chinese officials have repeatedly accused the United States and its allies of “ganging up to try to suppress China’s global rise,” and consider the formation of a consolidated trading platform a “way to strengthen the country’s negotiating position in an unfriendly international environment.”  

    Is China’s iron ore vertical a sign of things to come in the Critical Minerals world?  Watch this space, as ARPN tracks Chinese government developments in 2023.  But it’s already clear that both moves to further tighten government control over segments of the critical minerals sector tie into newly emboldened Chinese President Xi Jinping’s call for China to increase its self-sufficiency in technology and supply chains during his re-confirmation speech in October of this year. The Wall Street Journal had called Mr. Xi’s re-confirmation for another term in office in October a “coronation,” which effectively “confirm[ed] China’s combination of aggressive nationalism and Communist ideology that is the single biggest threat to world freedom.” 

    As ARPN has previously pointed out, efforts to decouple supply chains from China may become “all the more pressing in light of current fears that (…) China may retaliate after the U.S. Department of Commerce announced sweeping limitations to semiconductor and chip-making equipment sales to Chinese customers this fall.”  With Mr. Xi reportedly seeing the possibility of a showdown with the West as “increasingly likely” in the context of his goal to “restore China to what he believes is its rightful place as a global player and a peer of the U.S.,” America and its close allies would be well advised to move critical mineral supply chain security to the top of their priority lists.

    Share
  • Sustainably Building Out Domestic Supply Chains — Auto and Battery Makers Rethink Their Value Chains in Wake of Recent Regulatory Changes and Intensifying Competition

    In recent months, and in particular in the wake of the recently-passed congressional Inflation Reduction Act (IRA), we have seen a long overdue uptick in efforts to build out a secure North American critical minerals supply chain.

    Not surprisingly, many of these efforts are focused on what ARPN has dubbed the “super-criticals” – the five battery materials, plus a sub-set of five rare earths required for permanent magnets (neodymium, praseodymium, dysprosium, terbium and samarium), which altogether comprise a group of 10 Criticals within the 50 Critical Minerals on the official U.S. Government list.

    With the new sourcing requirements in the energy provisions of the Inflation Reduction Act mandating that to be eligible for the EV tax credits contained in the package, qualified cars must be assembled in North America, and adhere to “escalating levels of critical minerals to be sourced from the U.S. or a country with a free-trade agreement with the U.S,” car and battery makers are being forced to rethink their supply chains.

    LG Energy Solutions’s (LGES) just-signed offtake agreement for the purchase of battery-grade lithium carbonate from U.S.-based Compass Minerals is a case in point for companies adapting to “recent regulatory changes and intensifying competition over key battery raw materials.”

    The companies have entered into a six-year term agreement under which LGES would receive 40% of Compass Minerals’s anticipated annual production from its lithium brine development project located on the Great Salt Lake in Ogden, Utah.

    With Compass Minerals having adopted a low-carbon profile for its operations — the company recently announced it will rely on Energy Source Minerals’s direct lithium extraction (DLE) technology to remove lithium with superior absorption and minimal environmental impact, using a solar evaporation process projected to produce significantly lower rates of greenhouse gas emissions — the partnership will tie into the overall push towards net zero carbon emissions.

    As ARPN has frequently pointed out, the mineral intensity of the green energy transition dictates that the pathway to net zero carbon leads through the mining sector — which, thankfully, is ready to meet the challenge of striking a balance between modern mining practices and environmental protections.

    In this context, the LGES and Compass Minerals partnership is another example of the mining sector harnessing advances in materials science and technology to do its part to sustainably green the future while securing critical mineral supply chains underpinning 21st Century technology.

    For more examples of initiatives by mining companies to significantly reduce carbon emissions or even “close the loop,” take a look herehere and here.

    Share
  • 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 [...]
  • Geopolitical Pressures on Mineral Resource Policy: A Look at Central and South America and the Rise of Resource Nationalism

    Against the backdrop of the global push to net carbon zero, supply chains for the critical metals and minerals underpinning this shift are facing immense pressures. As followers of ARPN well know, China, which not only holds the pole position when it comes to sourcing critical minerals, but has also cornered the downstream supply chain, [...]
  • USGS Mineral Commodity Summaries 2022 — Amidst Greater Focus on Supply Chain Security, Mineral Resource Dependence Persists

    We’ve named it the year of the Supply Chain, noting that others said “2021 is the year ‘supply chain’ went from jargon to meme.” While an increased focus on the supply chain was undoubtedly a critical development in the mineral resource realm, and several steps to increase supply chain security for critical minerals were taken in [...]
  • It’s the Processing, Stupid? The Critical Mineral Supply Chain Challenge Visualized

    They say a picture is worth a thousand words. This Visual Capitalist graphic may not exactly qualify as a picture – but is certainly reveals a lot about the complexity and urgency of the West’s critical mineral woes, and underscores how China has managed to corner the strategic and clean energy materials supply chain especially when [...]
  • China’s Play for Lithium in Canada — A Stronger Focus on National Security in Critical Mineral Resource Policy Warranted

    As the United States continues to look for ways to shore up and secure its critical mineral supply chains, a business deal involving China is raising eyebrows for some of our neighbors to the North. An October 2021 announcement by Chinese state-owned enterprise Zijin Mining Group Co. Ltd that it would purchase Canadian lithium miner [...]

Archives