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American Resources Policy Network
Promoting the development of American mineral resources.
  • A Look at the Inflation Reduction Act and Its Potential to “Reclaim Critical Mineral Chains”

    In a comprehensive new piece for Foreign Policy, director of the Payne Institute and professor of public policy at the Colorado School of Mines Morgan Bazilian, and postdoctoral fellow at the Jackson Institute for Global Affairs at Yale University Gregory Brew take a closer look at the recently passed Inflation Reduction Act’s energy provisions, which in their view holds the key to “reclaiming critical mineral chains.”

    While providing billions of dollars to “buttress U.S. energy security while also addressing climate change,” the IRA ties EV tax credits to strict sourcing restrictions:

    Qualified cars must be assembled in North America and adhere to mandated “escalating levels of critical minerals to be sourced from the U.S. or a country with a free-trade agreement with the U.S.”

    The escalating levels of sourcing requirements for applicable battery critical minerals (with the bill defining an extensive list of applicable minerals) are as follows:

    “40% for a vehicle placed in service before 1 January 2024;

    50% for a vehicle placed in the service during calendar year 2024;

    60% for a vehicle placed in service during calendar year 2025;

    70% for a vehicle placed in service during calendar year 2026; and

    80% for a vehicle placed in service after 31 December 2026.

    The bill places similar restrictions on the percentage of value of the components, but leading up to a 100% requirement for vehicles placed in service after 31 December 2028.”

    Write Bazilian and Brew:

    “For the first time, U.S. policy is directly tying the supply of these little-understood minerals to a massive paradigm shift in the automobile market. As the markets for these materials are diverse, global, and dominated largely by China, this offers a rare instance of bipartisan concern.

    The purpose of the policy is threefold. The Biden administration wants to accelerate the energy transition to low carbon technologies; encourage domestic manufacturing; and improve U.S. energy security, ostensibly by reducing its dependence on foreign supplies of the minerals needed to support the energy transition.”

    However, as followers of ARPN well know, the sourcing requirements pose a fundamental challenge for the United States, leading Bazilian and Brew to conclude that “[w]here the 20th century featured battles over access to oil, the 21st century will likely be defined by a struggle over critical minerals, particularly as the United States views China as a global competitor and strives to limit its reliance on Chinese supplies for EV manufacturing and a wide variety of energy and defense technologies.”

    Outlining the scope of the geopolitical challenges and China’s dominance along the critical minerals value chain, as well as the United States’ need to catch up, Bazilian and Brew identify “five essential areas” that can “help provide the basis for a vibrant, more resilient, and more robust set of supply chains – and thus support energy transitions effectively”:

    1. A focus on sustainable mining, building on the dramatic improvements of mining practices over the last decades, will not only provide cutting edge solutions but also allow “for a new narrative to emerge for the sector” which is still seen as “dirty, outmoded and unsophisticated.”
    2. Increasing transparency and functionality in critical mineral markets can help eliminate “ineffective market signals for investment, obstacles that can cause huge roadblocks to production and trade.
    3. Reframing the debate on critical minerals in the context of supply chains rather than “just rocks,” and taking into consideration the “gateway metal” and “coproduct” relationships (Bazilian and Brew use different terminology but invoke the same concept ARPN followers are familiar with) of many critical minerals will help stakeholders design effective policy solutions.
    4. Circular economy concepts in which recycling of materials once products reach the end of their life span need to be emphasized and strengthened and harnessed in the U.S., where rates are “terribly low.”  
    5. A focus on permitting as well as social acceptance will hold “a key to success in the critical mineral space.” 

    Bazilian and Brew conclude:

    “The IRA promises a drastic reduction in U.S. carbon emissions and an acceleration of the energy transition away from fossil fuels. The United States needs more wind turbines, solar panels, and electric cars. But to make that possible, it will need more mines.”

    As Shane Lasley outlines in his most recent publication, “Critical Mineral Alliances 2022,” we have an entire arsenal from which we can draw to succeed in the 21st Century battle over critical minerals, but it will take a concerted effort, and one that requires reaching across the political aisle:

    “[t]he optimum solution to laying the foundation for the next epoch of human progress will only be discovered through the forging of unlikely alliances between the woke and old school, environmental conservationists and natural resource developers, liberals and conservatives, national laboratories and private sector entrepreneurs, local stakeholders and global mining companies, venture capitalists and innovators, and everyone else with visions of a cleaner, greener, and high-tech future.”

    From where we stand, the challenge of the 21st Century’s Tech Metals Age begins with a change in mindset toward mining.

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  • Invocation of Defense Production Act a Sign “America is Finally Taking the Battery Metal Shortage Seriously” – But Must be Embedded in True All-of-the-Above Strategy

    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 headline of the latest piece by Tsvetana Paraskova for OilPrice.com indicates.

    Amidst the cheer, some caution, however, that invoking the Defense Production Act does “nothing to streamline the permitting process,” which remains mired in redundancies and red tape.  Writes Joe Deaux for Bloomberg News:

    “It takes a about seven to 10 years to get a mine up and running in the U.S., compared to two to three years in neighboring Canada, according to the U.S. business group National Mining Association. The omission will frustrate mining companies when Biden is pushing to revive domestic production capacity while embracing a shift in the U.S. economy to less polluting energy.”

    Deaux cites National Mining Association President Rich Nolan, who told Bloomberg News via email that “[u]nless we continue to build on this action, and get serious about re-shoring these supply chains and bringing new mines and mineral processing online, we risk feeding the minerals dominance of geopolitical rivals. We have abundant mineral resources here. What we need is policy to ensure we can produce them and build the secure, reliable supply chains we know we must have.”

    Meanwhile, pointing to recent regulatory action taken by the Biden Administration to block a proposed copper mining project in Minnesota and to slow another one in Arizona, the Wall Street Journal editorial board this week laments contradictions in the White House’s energy policy, stating that “President Biden on Thursday invoked the Defense Production Act to subsidize the mining of certain minerals in the U.S. that his own Administration is using regulation to block.”

    All of which ultimately 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.”

    With the political campaign season upon us, the Biden Administration’s balancing act to reconcile its green credentials with the acknowledged need for domestic resource development will likely not get any easier, but Russia’s invasion of Ukraine has raised the stakes for mineral resource security – already high in the wake of the global coronavirus pandemic unearthing massive supply chain challenges – to a whole new level.

    As Ruth Demeter, Senior Director of Policy, Global Energy Institute at the U.S. Chamber of Commerce pointed out:

    “The war in Ukraine and sanctions imposed against Russia have once again underscored the precarious nature of America’s growing dependence on critical minerals—and lack of homegrown supply.” 

    Nonetheless, writes Bloomberg’s Deaux, “[t]he Defense Production Act would be a huge step in bringing legitimacy to U.S. companies with battery-metals projects seeking to attract more capital to expand businesses and help create a self-sustaining domestic industry.”

    To be leveraged most effectively, however, its invocation should be embedded into a truly comprehensive “all-of-the-above” approach across the entire value chain that ARPN and others have been calling for.

    We can, and should, harness partnerships with allies, expand recycling capabilities and work on “closed-loop solutions”– but, as we’ve stated elsewhere, we will not be able to meet vastly increasing mineral needs and safeguard our national and economic security without leveraging and expanding domestic production and processing capabilities.

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  • Critical Minerals in Focus – U.S. Senate Full Committee Hearing on Domestic Critical Mineral Supply Chains

    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 [...]
  • Report from The Yukon: Critical Minerals Challenge Brings “Geopolitical Backwater” Into Focus

    As we outlined in our last post, the Biden Administration’s strategy to secure critical mineral supply chains, as outlined in its just-released 100 Day Supply Chain Report, embraces an “all of the above approach.” While strengthening sustainable mining and processing domestically, the Administration will also rely on partnerships with our closest allies — and of [...]
  • Tomorrow, Tuesday, Dec. 10 – U.S. House Committee to Hold Hearing on “Research and Innovation to Address the Critical Materials Challenge”

    On Tuesday, December 10 — close to the two-year anniversary of the White House’s executive order “to develop a federal strategy to ensure secure and reliable supplies of critical minerals” the House Science, Space and Technology Committee will hold a hearing on “Research and Innovation to Address the Critical Materials Challenge.” The hearing comes against the backdrop of increased [...]
  • REEs Underscore Challenges of Erosion of Defense Industrial Base

    While policies stemming from the dominating free-trade ideology “have succeeded in generating great wealth for the U.S. economy, they have also led to a number of unintended consequences, including the erosion of the manufacturing segment of the defense industrial base,” argues Jeff Green, president of Washington, D.C.-based government relations firm J.A. Green & Company, and member of [...]
  • Defense Industrial Base Report “Clear Sign We Need to Act Urgently”

    In a new piece for The Hill’s Congress Daily Blog, retired U.S. Army Brig. Gen. John Adams argues the recently released Defense Industrial Base Report and its findings, which we previously discussed here and here, represent a call to action for Congress and other stakeholders, because it shows that “[j]ust when we should be retooling for [...]
  • “From Bad to Worse” – Why the Current Focus on Critical Minerals Matters

    Earlier this spring, the Department of the Interior released its finalized Critical Minerals List.  Jeffery Green, president and founder of government relations firm J.A. Green & Company and member of the ARPN panel of experts reminded us in a recent piece for Defense News why the current focus on our over-reliance on foreign mineral resources [...]
  • McGroarty for IBD: “Time to Make the Connection Between Critical Minerals and National Defense”

    “For want of a nail … the kingdom was lost” Invoking the old proverb dating back to the 13th Century as a cautionary tale and reminder that “the most sophisticated defense supply chain is only as strong as our weakest link,” ARPN’s Dan McGroarty argues in a new piece for Investor’s Business Daily that the [...]
  • Coalition of Congressional Members and Stakeholders Call on EPA to Reverse Pre-emptive Veto and Restore Due Process to U.S. Mine Permitting  

    Earlier this month, the Congressional Western Caucus led a coalition of Members of Congress and Stakeholders to call on EPA Administrator Scott Pruitt to reverse a pre-emptive veto of the Pebble Mine project in Alaska. The veto stopped the project before it had formally applied to begin the permitting process — a unilateral expansion of [...]

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