Milewski points to Russia having fired an estimated 11 million artillery shells in 2022, the majority of which can contain – depending on shell and manufacturing process – at least an estimate 0.5kg of copper. This, he says would amount to 5,500 tons of copper, or the equivalent of copper used in 1,170 wind turbines.

Copper demand is already forecast to increase by more than 100% by 2035 with many analysts warning there may not be enough copper to meet decarbonization goals in the next few decades after years of underinvestment in the mining industry and falling ore grades.  And those projections, according to Milewski, do not account for surging military demand against the backdrop of increasing geopolitical volatility around the globe.

Of course, copper is just the proverbial tip of the iceberg. According to the National Mining Association, the U.S. Department of Defense uses nearly 750,000 tons of minerals on an annual basis – a number that was calculated around 2016/2017 at a time when the U.S. was not facing any major conflicts.

Fast-forward to 2024 and the U.S. is supporting allies in the Ukraine and Israel while the situation in the Taiwan Strait looks increasing vulnerable.  Meanwhile, particularly ammunition stockpiles are running so low that NATO officials have warned that Western militaries are scraping “the bottom of the barrel” forcing NATO to provide Ukraine with supplies not from full warehouses, but rather “half-full or lower warehouses in Europe.”

The issue is compounded by the fact that production time to rebuild weaponry stocks can take anywhere between three and 18 years, depending on equipment according to the Centre for Strategic and International Studies – however that analysis focuses only on manufacturing and production times.

As followers of ARPN well know, supply chains for the metals and minerals underpinning U.S. military technology and munitions are “extremely vulnerable” due to a perennial over-reliance on supplies from adversary nations, i.e. China.

For all the talk about decoupling supply chains in recent years, the needle has not moved much, and the latest USGS Mineral Commodity Summaries still has the U.S. 100% import reliant for 12 metals and minerals, while an additional 29 critical mineral commodities had a net import reliance greater than 50% of apparent consumption — a small drop by two over last year’s report.

However, some important steps have been taken in recent years, and are beginning to bear fruit. Milewski lists several military budget ramp-ups to “try and resolve the massive shortfall.”

As ARPN previously outlined, a notable example of such efforts is the series of (Defense Production Act) DPA Presidential Determinations involving specific Critical Minerals, beginning with President Trump’s July 2019 designation of the Rare Earth permanent magnet supply chain as being “essential for the national defense,” followed by President Biden’s designation of what ARPN calls the “Battery Criticals” as DPA Title III eligible in March 2022, followed by Platinum and Palladium in a DPA Presidential Determination in June 2022.  Earlier this spring, two further Presidential Determinations (February 27, 2023 Presidential Determination, and DPA Presidential Determination (2023-5)), effectively created an entirely new category of critical minerals – “Defense Criticals” as ARPN calls them – by way of designating airbreathing engines, advanced avionics navigation and guidance systems, and hypersonic systems and their “constituent materials” as priority DPA materials.

Those DPA actions, funded by Congressional appropriations, are now producing Department of Defense funded projects to encourage domestic development of these “defense criticals” and their supply chains.

Milewski highlights the following:

• Graphite: a $37.5 million agreement between the DoD and Graphite One (Alaska) to fast-track a domestic graphite mine;
• Antimony: two awards — $24.8 million and $15.5 million — by the DoD to Perpetua Resources to secure a domestic source of antimony [an additional conditional award of up to $34.6 million under the existing Technology Investment Agreement was announced earlier this week];
•  Lithium: a $90million agreement to secure lithium production between the DoD and Abermarle;
• Nickel: a US $20.6 million agreement between the DoD and Talon Nickel to increase domestic nickel production.

He closes:

“We see the U.S. military shifting its position and capacity to secure its critical mineral supply gaining more momentum than it has for arguably the past 30 years. However, the U.S. military is America’s largest government agency, and it will take time.”

However, with conflict brewing in many parts of the world, time is a luxury we do not have, and strengthening critical mineral supply chains should be a key priority for policy stakeholders in 2024.

The post U.S. Military Faces Compounding Problems – Surging Tensions, Depleted Stockpiles, Critical Mineral Supply Chain Challenges appeared first on American Resources Policy Network.

In a piece posted at Oilprice.com Mark P. Mills (via Zerohedge) takes a deep dive into this question.  As Mills points out, with America’s longstanding bond with cars showing no signs of weakening in spite of soaring cost, the push towards widespread adoption of EVs is running into significant challenges in practical application and underlying physics, and, as followers of ARPN well know, a complex mix of chemistry, geology and geopolitics.

Mills laments that the underlying premises of the “ostensible inevitability, the enthusiasm, the subsidies, and the mandates for EVs are anchored in (…) claims (…) that are simply wrong ” –  EVs are not simpler than conventional cars, they just have a complexity of their own, they do not entail less labor to build but rather shift where the labor takes place, and the upstream supply chains, i.e. the sourcing of material inputs, happens “elsewhere since the mines and refineries are not in America.”

Meanwhile, the mineral challenges are significant, says Mills:

“While copper is the long pole in the tent, it is only one of the mineral challenges. The realities of costs and emissions for EVs is dominated by a simple fact: a typical EV battery weighs about 1,000 pounds to replace the fuel, and the tank weighing together under 100 pounds.  That half-ton battery is made from a wide range of minerals including copper, nickel, aluminum, graphite, cobalt, manganese, and of course, lithium. And to get the materials to fabricate that half-ton battery requires digging up and processing some 250 tons of the earth somewhere on the planet. Those numbers, it’s important understand, are roughly the same no matter what the specific battery chemical formulation is, whether it’s lithium nickel manganese, or the popularly cited lithium iron phosphate.”

As the piece points out, the sheer quantity of materials needed “has led proponents to claim that there are, after all enough minerals on the planet and there’s nothing to worry about” – an argument that becomes irrelevant when you consider that “the data show that, overall, the mines operating and planned can’t supply even a small fraction of the 400% to 7,000% increase in demand for minerals that will be needed within a decade to meet the ban-the-engine goals.” 

Ultimately, Mills concludes, that “the realities of physics and engineering mean that politicians pushing for an all-EV future run a high risk. Quite aside from the eventual discovery that EVs will disappoint with only a tiny impact on global CO2 emissions, the bigger impacts will come as consumers find vehicle ownership costs and inconveniences both escalating.”

While this may be true, it appears that, to stay with transportation analogies, the train has left the station.  Politicians are all in for the EV revolution — but to lessen the blow to consumers, they will need to embrace frameworks that will bolster the domestic supply chains for the critical minerals underpinning this shift, across all segments of the value chain.

As the horse and carriage gave way to the “motor carriage” with its superior horsepower, EVs are inexorably redefining the driving experience, even as internal combustion engines co-exist in some manner.  The pace of change will certainly rest on the understanding of the role a host of Critical Minerals play in this transformation – and the willingness to extract them in ways old and new.

The post The EV Transition is Here – But Its Enthusiasts Ignore Its Political and Economic Implications appeared first on American Resources Policy Network.

Earlier this month, in a letter to Biden Administration officials, U.S. Senators registered their concerns regarding media reports of a potential “limited free trade” agreement between the United States and Indonesia – sometimes dubbed the “nickel capital of the world” — on critical minerals in the context of the Administration’s effort to expand the number of countries to qualify for the tax credits afforded under the recently enacted Inflation Reduction Act (IRA).

Senators argued that forging ahead with negotiations with Indonesia without having developed a comprehensive accounting of domestic sourcing options, and the opportunities from countries with which the U.S. already has trade agreements, would “undermine the intent of Congress and undermine the jobs and futures of our workers.” (See ARPN’s earlier post on the issue here) 

But that’s not all.  Now a news story from Asian media examines whether such a pact might actually provide U.S. taxpayer-funded subsidies that would benefit Chinese mining companies.  For a U.S. law meant to encourage U.S. resource development and reduce foreign resource dependence not least on China, it’s an unintended consequence, to say the least.

As Nikkei Asia picks up the story, the senators’ opposition is throwing “a wrench int the Biden Administration’s plans to host [Indonesian] President Joko Widodo at the White House this month, to coincide with the Indonesian leader’s attendance at the Asia-Pacific Economic summit in San Francisco.”

Nikkei cites North American mining industry representative Todd Malan who points out that “[t]he idea behind the IRA was that free trade agreement countries have high standards and was a proxy for saying ‘let’s build up a supply chain outside of China and to do it with allies that have free-trade agreements,” adding that “The point of the letter is to say that giving a free trade agreement to Indonesia is just a backdoor for Chinese companies and that U.S. taxpayers should not be giving a subsidy to Chinese miners in Indonesia.” 

Indeed, Chinese companies are heavily invested in the country. Benefiting from long-standing relationships with Indonesia, they have “poured upwards of $14 billion into two ore-rich islands to lock in supplies for battery production,” according to Bloomberg reports.

Malan is chief external affairs officer at Talon Metals, a mining company focused on advancing U.S. domestic nickel projects which have been awarded federal funding in recent months – along with several other domestic projects for other battery and defense criticals. (See ARPN’s  recent coverage here and here)

All of which underscores, as ARPN has previously pointed out, that “Critical Mineral resource development can begin at home, where political risk is low and environmental, labor and mine safety standards are high” – principles that should guide stakeholders when it comes to sourcing nickel and other Criticals, particularly as geopolitical tensions surge across the globe. 

The post Would Incentivizing U.S. Nickel Imports From Indonesia be a Backdoor for U.S. Tax Subsidies for Chinese Nickel Companies? appeared first on American Resources Policy Network.

In a letter to Biden administration officials, the senators, led by U.S. Sens. Kevin Cramer (R-ND) and Tina Smith (D-MN), express their concerns regarding media reports of a potential “limited free trade” agreement between the United States and Indonesia on critical minerals.

The Biden administration is looking to expand the number of countries to qualify for the tax credits afforded under the recently enacted Inflation Reduction Act (IRA), but senators argue the Administration is forging ahead with negotiations with Indonesia — a country that is not only known for questionable human rights, labor and environmental standards, but has also restricted trade in critical minerals and floated the idea cartelization ideas for nickel producing countries – without having developed a comprehensive accounting of domestic sourcing options, and the opportunities from countries with which the U.S. already has trade agreements.

“(…) pursuing additional critical mineral ‘free trade agreements’ without the involvement of Congress, before the development of domestic mineral resources, and without achieving meaningful and enforceable standards for labor and environmental protections would undermine the intent of Congress and undermine the jobs and futures of our workers,” the senators write.

A key battery critical, nickel is also an essential building block for the production of high-temperature aerospace alloys and stainless steel.  A “relatively benign supply profile” kept nickel off the U.S. Government’s first List of Critical Minerals in 2018. However, the metal’s increased usage in EV batteries, and the USGS’s expanded criticality criteria to include materials with only a single domestic producer along their raw materials supply chains – identified as having a single point of failure – led to nickel’s incorporation into the 2021 update to the U.S. Government Critical Minerals List.   In 2022, nickel was also named in the Defense Production Act Presidential Determination as one of five battery materials “essential to the national defense.” 

As the largest nickel producer with the largest known reserves of the material, Indonesia is considered the “nickel capital of the world.”  Followers of ARPN may recall last year’s reports of the country’s government studying the “possibility to form a (…) governance structure [similar to OPEC]” for nickel-producing countries.

And while the United States’ only primary nickel mine in operation, the Eagle Mine in Michigan, is nearing the end of its life cycle, other domestic opportunities are readily available, as acknowledged by the U.S. Department of Defense, which recently awarded funding  under Defense Production Act Title III authority) to Talon Nickel (USA), LLC to increase the domestic production of nickel.

The $20.6 million agreement uses funds appropriated by the Additional Ukraine Supplemental Appropriations Act, to advance nickel exploration and mineral resource definition of the Tamarack Intrusive Complex (TIC).   The project is not only considered promising due to its available nickel resources, but also in light of its harnessing of new technologies to minimize its carbon footprint, which is why the U.S. Department of Energy previously issued a $2.2. million award to fund to a joint venture between Talon Metals Corp. and Rio Tinto at the Tamarack Nickel Project site to achieve carbon capture by a process that mineralizes the carbon in rock – a process far more stable than methods that inject carbon, where it remains vulnerable to seepage and fracturing due to earthquakes.

These federal grants follow Talon’s $114 million 2022 grant from the Department of Energy to build a processing plant in North Dakota – making the company one of the first recipients of Infrastructure, Investment and Jobs Act renewable energy funds.

All of which is proof that Critical Mineral resource development can begin at home, where political risk is low and environmental, labor and mine safety standards are high.  As the senators argue:

“(…) given the extraordinary taxpayer resources at play, we strongly believe that eligibility for the critical minerals credit must prioritize domestic producers and existing free trade agreement partners. If expansion is deemed necessary, it should be directed toward countries with strong labor, human rights and environmental standards.”

The post U.S. Senators to Administration: Prioritize Domestic Producers and Existing Free Trade Agreement Partners in Push to Bolster Supply Chains for Nickel and Other Critical Minerals appeared first on American Resources Policy Network.

ARPN outlined several of these DoD-funded projects to strengthen critical mineral supply chains in an earlier post. This past week, DoD added two more projects to the list.

On September 12, 2023, DoD announced that the Office of the Assistant Secretary for Industrial Base Policy, through its Manufacturing Capability Expansion and Investment Prioritization (MCEIP) office, has entered an agreement with Albemarle Corporation to support the expansion of domestic mining and production of lithium.

Per DoD’s announcement, “[t]he $90 million agreement, entered into under Defense Production Act (DPA) Title III authorities and utilizing funds appropriated by the Inflation Reduction Act, will help support Albemarle’s planned re-opening of their Kings Mountain, N.C. lithium mine to increase domestic production of lithium for the nation’s battery supply chain. Albemarle estimates that Kings Mountain will be operational between 2025 and 2030.”

Sometimes hailed the “fuel of the green revolution,” lithium has been the posterchild of the “battery criticals.”  Start with the fact that the leading battery technology underpinning the shift towards net zero carbon emissions is called “lithium-ion.” With its high electrochemical potential and light weight, the commercialization of the lithium-ion battery has transformed and accelerated the renewables shift.  Lithium is a key component of the battery cathode, and the EV market and demand for renewable energy storage are key drivers for soaring lithium demand.

Meanwhile, as global lithium production has quadrupled since 2010, the U.S. share of production has dropped significantly. Once the largest producer of lithium in the 1990s, the United States’ share of production has dropped to 1 percent of the global total, as Australia, Chile and China dominate the field.

A second award announcement made on the same day aims at strengthening the nickel supply chain, and was also made through the Manufacturing Capability Expansion and Investment Prioritization (MCEIP) office of the Office of the Deputy Assistant Secretary of Defense for Industrial Base Resilience:

The $20.6 million agreement with Talon Nickel (USA), LLC – also entered into under DPA Title III authorities — uses funds appropriated by the Additional Ukraine Supplemental Appropriations Act to advance nickel exploration and mineral resource definition of the Tamarack Intrusive Complex in northeast Minnesota.

The Office of the Deputy Assistant Secretary of Defense for Industrial Base Resilience, through its Manufacturing Capability Expansion and Investment Prioritization (MCEIP) office, entered an agreement with Talon Nickel (USA), LLC (Talon) to increase the domestic production of nickel.

The $20.6 million agreement, entered into under Defense Production Act (DPA) Title III authorities and using funds appropriated by the Additional Ukraine Supplemental Appropriations Act, to advance nickel exploration and mineral resource definition of the Tamarack Intrusive Complex (TIC). Here, the company seeks to leverage its Advanced Exploration System (AES) — a proprietary suite of geophysical mapping tools that has already completed a successful pilot program and allows the company to rapidly identify and demonstrate economically recoverable nickel materials.

A key battery critical, nickel is also an essential building block for the production of high-temperature aerospace alloys and stainless steel.  A “relatively benign supply profile” kept nickel off the U.S. Government’s first List of Critical Minerals in 2018. However, the metal’s increased usage in EV batteries, and the USGS’s expanded criticality criteria to include materials with only a single domestic producer along their raw materials supply chains – identified as having a single point of failure – led to nickel’s incorporation into the 2021 update to the U.S. Government Critical Minerals List.    The United States’ only primary nickel mine in operation, the Eagle Mine in Michigan, is nearing the end of its life cycle.

While, as ARPN previously outlined,  increased domestic production for critical minerals alone may not suffice to fully solve our nation’s critical mineral woes – hence ARPN’s support for an all-of-the-above approach to mineral resource security — there are promising domestic resource development projects that can go a long way to significantly reducing vulnerabilities in the short to medium term, and ARPN will continue tracking these DoD-funded projects as they begin to bear fruit.

The post DoD Once More Invokes Defense Production Act Title III Authority for Projects to Strengthen Domestic Critical Mineral Supply Chains for Lithium, Nickel appeared first on American Resources Policy Network.

Too wonky?  Who cares?  That’s what earbuds are for – no one has to know that you’re not binging True Crime or learning a new language.

Better to bone up on a metal that’s emerging as a mainstay of the net zero transition.

As ARPN previously outlined, a “relatively benign supply profile” kept nickel off the U.S. Government’s first List of Critical Minerals in 2018. However, the metal’s increased usage in EV batteries, and the USGS’s expanded criticality criteria to include materials with only a single domestic producer along their raw materials supply chains – identified as having a single point of failure – led to nickel’s incorporation into the 2021 update to the U.S. Government Critical Minerals List.

As followers of ARPN may recall, Indonesia, the world’s biggest nickel producer, has hinted at the possibility of Jakarta pursuing the creation of an OPEC-like cartel for nickel (and other key battery minerals).  Reportedly, the Indonesian government has reached out to the Biden Administration to explore a deal similar to those the U.S. has made with Japan and the European Union; however, Indonesia’s “lagging environmental and labor standards”, raise some hard questions on how broad the net of “friends and allies” can and should be cast.

In the case of nickel, once again ARPN’s touchstone is our all-of-the-above approach to mineral resource policy, rooted in the realization that as much as we want to rely on our friends and allies, to succeed and remain competitive in the 21st Century we will also have to harness our arguably vast domestic resource potential across the entire value chain, from mine to manufacturing.  And domestic nickel production looks to be given a boost by projects currently underway in Minnesota (see our post here), as well as  what appears to be vast untapped mineral potential in neighboring Michigan.

Currently, Michigan is the home of the only U.S. primary nickel mine in operation, the Eagle Mine.  Yet as the Detroit News reports this week, even with the Eagle nearing the end of its life cycle, according to the USGS, the Lake Superior region “could be home to as much nickel as Russia or Canada, some of the largest nickel producers in the world.” 

The Detroit News points to Talon Metals Corp.’s plan to explore 400,000 acres of the Upper Peninsula and seek exclusive exploration rights to an additional 23,288 acres from the state, as well as the Michigan Geological Survey’s search of portions of the region in the context of the United States Geological Survey’s current nationwide mapping project.

John Yellich, director of the Michigan Geological Survey based at Western Michigan University, believes that the area’s potential may go beyond nickel, and that new technology will help scientists gather “as much scientifically accurate information as possible” in an area where the federal government hasn’t done significant mapping for 70 years.

If the estimates hold up, Michigan (along with Minnesota) could be an important piece of the all-of-the-above puzzle for nickel for which a current oversupply is expected to dissipate and tip into a deficit by 2026, with EV battery technology as a key driver.

However, as is the case with neighboring Minnesota, and as U.S. House Natural Resources Committee Chairman Pete Stauber (R-MN) recently outlined,

“[I]f we’re going to unlock the full potential of our resources and secure our domestic mineral supply chains, we need the political will to implement permitting reform.”   

As Michigan and Minnesota make clear, the U.S. has vast resource potential for precisely the metals and minerals needed to power our 21^st Century economy.  What the U.S. needs now is policy reform that unlocks the investment and innovation to realize that potential.

The post A Nickel for Your Thoughts: New Potential for U.S. Nickel Supply appeared first on American Resources Policy Network.

The expectation is that with the proposed EPA rules requiring automakers to reduce carbon emissions by 56% in their 2032 models compared to 2026 models in place, 67% of new light-duty car purchase will need to be electric by 3032.

The so-called battery criticals – nickel, lithium, graphite, cobalt and manganese – hold the key to this development, but the push to secure their supply chains is, as followers of ARPN well know, fraught with challenges.

A case in point is nickel.

While a “relatively benign supply profile” kept nickel off the U.S. Government’s first List of Critical Minerals in 2018, the metal’s increased usage in EV batteries, and the USGS’s expanded criticality criteria to include materials with only a single domestic producer along their raw materials supply chains – identified as having a single point of failure – led to nickel’s incorporation into the 2021 update to the U.S. Government Critical Minerals List.

With the underground Eagle Mine in Michigan – currently the only U.S. primary nickel mine in operation – near the end of its lifecycle, stakeholders look to Michigan’s near-neighbor Minnesota, home to the Tamarack Nickel Project in Central Minnesota which is expected to start the environmental review process this year, the proposed Twin Metals underground mine which has been embroiled in an ongoing legal and regulatory battle over the years, and the PolyMet Mine in Northeastern Minnesota.

See ARPN’s recent post entitled “Critical in Spite of ‘Relatively Benign Supply Profile?’ A Look at Nickel” for more.

Earlier this week, as the House Committee on Natural Resources Subcommittee on Energy and Mineral Resources held an oversight field hearing “Examining the Mineral wealth of Northern Minnesota,” AXIOS Pro (subscription only) zeroed in on the congressional politics on the push to bolster the U.S. supply chain for the battery critical, pointing to the fact that “both Republicans and Democrats are pressing the Pentagon to use the Defense Production Act (…) to boost domestic nickel output” according to letters obtained by Axios.

As Axios’s Jael Holzman writes, the letters build off Biden’s 2022 DPA invocation to “liberate wartime authorities and funding U.S. minerals projects in a bid to unshackle the nation from foreign metals,” and the Defense Department replied to one of the letters stating that “the Department is actively engaging with companies across the United States and our allies to secure our critical mineral supply chains using DPA funds, including for nickel.”  

While recent headlines talk of a nickel glut considering Indonesia’s booming nickel output, these narratives must be taken with a grain of salt with the specter of resource nationalism and potential cartelization on the rise.  News from Moscow and Kiev indicate that and end to the war between Russia (a key global nickel player) and Ukraine is nowhere to be seen, and U.S. relations with China are deteriorating.  Faced with ever-growing geopolitical volatility, working with our allies, as per the DOD response to the congressional letters, to strengthen supply chain is an important piece of the “all-of-the-above” puzzle, but it is no panacea.

As ARPN has consistently argued, for the U.S. to achieve the lofty – and now even loftier – goals of net carbon neutrality we must embrace “a push to secure critical mineral supply chains from ‘soup to nuts’ to borrow a term used by Energy Secretary Jennifer Granholm. That means ‘all of the above,’ including domestic production and processing of metals and minerals like nickel.”

Clearly, the State of Minnesota has potential.  However, as Natural Resources Committee Chairman Rep. Pete Stauber (R-MN) said after the subcommittee field hearing:

“[I]f we’re going to unlock the full potential of our resources and secure our domestic mineral supply chains, we need the political will to implement permitting reform.”

With consensus on the need to secure critical mineral supply chains mounting on both sides of the political aisle, here’s hoping the political will to make tough choices and overcome the perennial “not-in-my-backyard” sentiment will follow suit.

The post Tackling the “Single Point of Failure” – Inside the Push to Bolster the U.S. Domestic Nickel Supply Chain appeared first on American Resources Policy Network.

The Critical Raw Materials Act (CRMA) presented to lawmakers in Brussels on March 16, includes a comprehensive set of actions aimed at shoring up European critical mineral supply chains.

At the EU level, the CRMA would streamline the permitting process for raw materials projects and allow for selected “Strategic Projects” to benefit from support for access to financing and shorter permitting timelines (24 months for extraction permits and 12 months for processing and recycling permits).  The Act also requires EU member states to develop national programs for resource exploration.

An updated critical raw materials list is complemented by a list of “strategic raw materials” deemed “crucial to technologies important to Europe’s green and digital ambitions and for defense and space applications, while being subject to potential supply risks in the future.”

The Act also sets forth clear benchmarks for domestic capacities to diversify critical mineral supply by 2030:

• At least 10% of the EU’s annual consumption for extraction,
• At least 40% of the EU’s annual consumption for processing,
• At least 15% of the EU’s annual consumption for recycling,
• Not more than 65% of the Union’s annual consumption of each strategic raw material at any relevant stage of processing from a single third country.

Followers of ARPN will be interested to learn that the Act designates copper and nickel, metals ARPN has long considered indispensable for a number of reasons - not least because of their status as “gateway metals” yielding access to critical co-products – as critical raw materials.   With nickel added to the U.S. Government Critical Minerals List in 2022, copper remains the outlier – the most “critical non-Critical” as we have said in the past.

Writes Mark Burton for Bloomberg:

“Copper, one of the largest industrial-metal markets, wasn’t included in the EU’s last list of critical raw materials published in 2020. Copper’s diverse uses in manufacturing, construction and industry mean it’s widely viewed as a bellwether for global economic activity, but surging usage in electric vehicles and renewables are fueling fears of deep shortages in years to come.”

 Burton cites Glencore Plc. chief executive Gary Nagle who said that copper production would need to almost triple by 2040 if the world was to meet net zero carbon emission goals, with demand driving prices up by some 15%.

He adds:

“The nickel market, meanwhile, was rocked by an unprecedented price spike last year in the wake of the invasion of Ukraine, which threatened to throttle supplies from Russia. In future, the world will become increasingly reliant on supplies from Indonesia, where supply of the key battery metal is expanding rapidly.”

Nickel was added in the first official USGS update to the 2018 in 2022, bearing testimony to the fact that policy makers and other stakeholders increasingly acknowledge the challenges associated with providing reliable supplies of the critical minerals underpinning the “Tech Metal Era.”

The United States has yet to designate copper a critical mineral in its official government list, but an effort to correct this omission is underway with senators calling on the Secretary of the Interior to use her power to short-circuit the standard three-year review timeframe for the critical minerals list and change copper’s designation to “critical” ASAP.

In a letter to Secretary Deb Haaland in early February, U.S. Senators argued that “[b]y recognizing copper as a ‘critical mineral,’ the United States’ federal government can more effectively ensure a secure and reliable supply of domestic copper resources in the years to come at all points of the supply chain including recycling, mining, and processing. Given the enormous investment required, the time lag for new sources of supply, and projected demand, time is of the essence,” with Senator Kyrsten Sinema (Ind.-Ariz.) adding in an interview that this should be a “no brainer” because “[w]e have major gaps in both our ability to mine and process these minerals to ensure our energy security for the future, and the administration knows how important copper is to our domestic and national security.”

While European Commission President Ursula von der Leyen expressed confidence that the Act would “significantly improve the refining, processing and recycling of critical raw materials here in Europe,”observers lament that the act was “short on details and excluded important raw materials needed for the green energy transition such as zinc, silver and aluminum.” 

Comparing the CRMA to the U.S Inflation Reduction Act, which, in his view “was heavy on providing monetary firepower,” Colin Hamilton of BMO Capital Markets commented that the “the EU version has limited mention of funds but lots of policy rationale.”

The EU sees partnerships with “like-minded countries willing to strengthen global supply chains” as critical for EU strategy to succeed, and has proposed a “Critical Raw Materials Club,” a concept that was already part of U.S.-EU discussions earlier this year amidst European concerns that the U.S. Inflation Reduction Act could end up penalizing non-U.S. companies.  Against the backdrop of rising tension with China and Russia, in a joint statement earlier this month, U.S. President Biden and EU Commission President von der Leyen vowed to iron out such differences and pledged close cooperation on the critical minerals front.

The CRMA will now be discussed and voted upon by the European Parliament and the Council of the European Union before its adoption and entry into force, and ARPN will be sure to keep tabs on related developments.

The post EU Critical Mineral Supply Chain Action Plan Focuses on Permitting, Adds Copper and Nickel to List of Critical Raw Materials appeared first on American Resources Policy Network.

While Nickel’s biggest traditional application is in alloying, particularly in the production of stainless and heat-resisting steels, it is its ability to achieve good storage capacity and higher energy density in batteries at an affordable cost that has sent the material’s star soaring in recent years.  It has also sent demand projections soaring, as nickel’s role in the EV revolution takes center stage.

At the end of 2021, nickel was only one of two new metals (the bulk of the expansion of the list from 35 to 50 minerals and metals was owed to the fact that the Rare Earths and Platinum Group Metals were now listed individually) to be added to the revised U.S. Government List of Critical Minerals. As Reuters’s Andy Home wrote at the time, while a “relatively benign supply profile kept nickel off” in the past, there are two reasons for including it on the updated list:

Pointing to the only domestic operating nickel mine in the U.S. and a single producer of nickel sulphate (which only produces Nickel as a co-product), Home said “the USGS has expanded its criticality criteria to look beyond trade dependency to domestic supply, particularly what it calls ‘single points of failure.’”

The second reason, according to Home, was “nickel’s changing usage profile from alloy in stainless steel production to chemical component in electric vehicle batteries.”  The rapid uptake of EVs as a key to the net-zero carbon transition has propelled nickel onto the critical minerals list, and has sent carmakers like Tesla and others to embark on missions to secure their own supply chains.

This push gained new urgency with Indonesia’s investment minister hinting at the possibility of Jakarta pursuing the creation of an OPEC-like cartel for nickel (and other key battery materials) last fall.  What is resource nationalism to some is supply risk to others, and that’s clearly part of the narrative around nickel.

The looming specter of battery material cartelization – first introduced earlier this year by South American Lithium producers — along with soaring demand scenarios provided fresh impetus for U.S. stakeholders to kick the buildout of domestic battery supply chains into high gear wherever possible, and efforts to this effect are currently underway.

According to USGS, in 2022, the underground Eagle Mine in Michigan – currently the only U.S. primary nickel mine in operation – “produced approximately 18,000 tons of nickel in concentrate, which was exported to smelters in Canada and overseas. Nickel in crystalline sulfate was produced as a byproduct of smelting and refining platinum-group-metal ores mined in Montana. In Missouri, a company produced nickel-copper-cobalt concentrate from historic mine tailings and was building a hydrometallurgical processing plant near the mine site.”

But with the Eagle project entering its final years, Michigan’s near-neighbor Minnesota holds promise for strengthening the U.S. domestic nickel supply chain.

The first recipients of federal funding disbursed under the 2021 infrastructure law to “supercharge” U.S. manufacturing of batteries for electric vehicles and the electric grid included the Tamarack Nickel Project in central Minnesota.  Talon Metals’ subsidiary Talon Nickel was one of 20 processing and manufacturing companies in 12 states chosen for a combined $2.8 billion award to “expand domestic manufacturing of batteries for electric vehicles and the electric grid.” 

Talon, which had previously signed a six-year agreement with Elon Musk’s Tesla under which Tesla would buy 75,000 metric tons of nickel concentrate, is looking to use part of the government grant to further its plans to construct an ore-processing facility in Mercer County, situated in the east-central region of North Dakota.

As ARPN has noted, the Tamarack project had previously been awarded  $2.2 million to fund an effort to achieve carbon capture by a process that mineralizes the carbon in rock – a process far more stable than methods that inject carbon, where it remains vulnerable to seepage and fracturing due to earthquakes. Bringing the supply chain home could not only inoculate the U.S. from trade issues on the critical minerals front but could also help reduce the industry’s — arguably large — carbon footprint.

The project is expected to start the environmental review process this year, a process that will be closely watched in particular in light of the Biden Administration’s recent decision to withdraw northeastern Minnesota’s Boundary Waters Canoe Area Wilderness from future mining – a move that could effectively kill another nickel and copper project, the proposed Twin Metals Minnesota underground mine, which has seen an ongoing legal and regulatory battle over the years.

A third proposed copper-nickel project in northeastern Minnesota — the PolyMet mine near Babbitt and Hoyt Lakes, just saw PolyMet Mining and Teck Resources finalizing a joint venture earlier this month to develop PolyMet’s copper-nickel deposit along with another larger ore body controlled by Teck. The project – a 50-50 venture, will be called NewRange Copper Nickel.

With the Tamarack and NewRange Copper Nickel projects situated in different watersheds, they are not affected by the Biden Administration’s Boundary Waters decision; however, as followers of ARPN well know, the not-in-my-backyard sentiment is a firm staple in the discourse over bolstering domestic supply chains, and brings us back to the “inherent irony” or “paradox of the green revolution” Reuters columnist Andy Home has invoked in several instances when covering critical mineral resource supply chains for the very materials underpinning the green energy transition — the paradox that “public opinion is firmly in favour of decarbonisation but not the mines and smelters needed to get there.”

As ARPN has previously pointed out – lofty goals of net carbon neutrality will not be achievable if we don’t embrace a push to secure critical mineral supply chains from “soup to nuts” to borrow a term used by Energy Secretary Jennifer Granholm.  That means “all of the above,” including domestic production and processing of metals and minerals like nickel.

After all, as we’ve noted often at ARPN, the first word in supply chain is… supply.

The post Critical in Spite of “Relatively Benign Supply Profile?” A Look at Nickel appeared first on American Resources Policy Network.

It’s fitting that ARPN reviews the report on Groundhog Day, February 2^nd, 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.

The post Groundhog Day 2023 – Another Year of Critical Mineral Resource Dependence? USGS Releases Annual Mineral Commodity Summaries Report appeared first on American Resources Policy Network.