Moscow’s invasion of Ukraine has largely isolated it on the global front both diplomatically and economically, and, with sweeping sanctions taking hold, the Western world has turned elsewhere to meet certain critical mineral needs previously supplied by Russian companies and halted shipments of materials to the Russian Federation.

Unsurprisingly for followers of ARPN, Russian buyers have begun turning to China to plug shortfalls.

A case in point:

With Ukraine and Australia, two of Russia’s key suppliers of alumina before the war, halting shipments to Russia, China’s alumina exports to Moscow have skyrocketed in recent months. In March, Russia had bought 9,950 metric tons of alumina from China, amounting to almost 10 times more than purchases for the same period in 2021. In May, according to Bloomberg News, Russia received a whopping 190,000 metric tons from China, bringing the year-to-date figure to 380,000 – almost 1,000% higher than the numbers for the same period in 2021.

While to date, Beijing has walked a carefully calculated line on Russia’s war on Ukraine emphasizing its concern with violence while maintaining the need to respect territorial integrity and security interests of all parties, China stands to gain major strategic opportunities from filling the void left by a Western business pullout from the Russian market, both in terms of imports and exports. China will also be able to further its grip on global critical minerals via access to Russia’s vast mineral riches.

In a telephone conversation earlier this month, according to a Chinese Foreign Ministry readout cited by Newsweek, Chinese President Xi Jinping and Russian President Vladimir Putin stressed support for “each other’s core interests,” with Xi telling Putin that “China stands ready to promote the stable and long-term development of pragmatic bilateral cooperation with Russia,” and is “ready to continue mutual support with Russia on issues concerning core interests and major concerns, such as sovereignty and security, and to deepen strategic coordination between the two countries.”

With China and Russia the number one and number two global producers and processors for many of the metals and minerals underpinning 21st Century technologies, the stakes cannot be underestimated. For years, ARPN sounded the alarm with regards to the lack of awareness of the geopolitics of mineral resource security, but it took the confluence of a global pandemic, subsequent supply chain challenges amidst growing demand, rising resource nationalism in the Southern hemisphere and Russia’s war on Ukraine to get stakeholders’ full attention to the issue. Promising efforts to reduce our nation’s overreliance on metals and minerals from our adversaries are currently underway.

However, as we have previously pointed out:

“Those familiar with the inner-workings of Washington, D.C. know all too well that particularly in an election year policy efforts can quickly lose steam or fizzle over attempts to placate certain constituencies. Against all affirmations to strengthen domestic supply chains, the not-in-my-backyard (NIMBY) sentiment is still strong.”

Ultimately though, with the stakes as high as they are today, a comprehensive “all-of-the-above” approach to mineral resource security, from mine to manufacturing and across all segments of the value chain, is the only way to, in U.S. Secretary of State Anthony Blinken’s recent words, “bet on ourselves and win the competition for the future.”

The post Geopolitics and Resource Realignment – China’s Alumina Exports on the Rise as Russia Seeks to Plug Shortfall appeared first on American Resources Policy Network.

Used in munitions for national defense as well as civilian applications ranging from flame retardants over wind and hydro turbines and solar panels to large storage batteries, spaceships and semiconductors, to name but a few of its uses, antimony has not only made the United States’ Critical Minerals List, but has also been designated “critical” by Canada, Australia, and the European Union.

While there is potential to re-establish domestic antimony production, currently, there is no current mining of antimony in the United States. China is the lead global antimony producer accounting for 55% of global mine production, followed by Russia at 23%, according to USGS figures.  Already, as USGS notes, “[t]he supply of antimony raw materials and downstream production of antimony products was constrained in 2021 as a result of environmental audits in China and various temporary mine shutdowns to mitigate the spread of the global COVID-19 pandemic.”  The Russian invasion of Ukraine and resulting geopolitical tension has further sparked concerns among members of the Armed Services Committee that recent developments could “accelerate supply chain disruptions.” 

Therefore, a report accompanying the draft legislation would require the National Defense Stockpile Manager “to provide a briefing to the House Committee on Armed Services not later than September 30, 2022, on the stockpile status of antimony. The briefing shall include not only the status of the current stockpile, but also a 5-year outlook of these minerals and current and future supply chain vulnerabilities.”

It is encouraging to see policy stakeholders are beginning to see our nation’s critical minerals challenge in a broader context stretching beyond the rare earths and battery criticals.  However, as followers of ARPN well know, draft legislation is just the very first stop in a long journey.

Even if legislation is enacted, it unfortunately is not always effectively implemented, as recent correspondence by U.S. Senators Joe Manchin (D-WV), Chairman of the Senate Energy and Natural Resources Committee, and Lisa Murkowski (R-AK), a senior member of the committee, in a series of joint letters to key members of the Biden Administration lamenting the delayed implementation of several critical minerals provisions enacted in 2020 and 2021, shows.

In 2019, ARPN’s Daniel McGroarty told U.S. Senators in a hearing on critical mineral supply chain issues, that we “can’t admire the problem anymore. We don’t have the luxury of time.”

That was almost three years ago, and before a global pandemic sent supply chains into turmoil and before Russia decided to invade Ukraine.   The stakes are too high to not act swiftly and comprehensively, in the context of an “all-of-the-above” approach across the entire value chain, from mine to manufacturing.

The post Beyond the Rare Earths and Battery Criticals – U.S. Armed Services Committee Seeks to Address Supply Chain Challenges for Antimony appeared first on American Resources Policy Network.

As the stakes continue to get higher and stakeholder pressure to take action mounts, it is encouraging to see that mainstream awareness of the issue is increasing.

Case in point: CNN’s Fareed Zakaria dedicating a “Last Look” segment of his Global Public Square program to the new race for natural resources triggered by the green transition.

Followers of ARPN will appreciate that unlike much of the coverage of the critical minerals challenge we’re seeing lately, which often might have you believe that concerns only revolve around the “battery criticals”lithium, graphite, cobalt, nickel, and manganese, Zakaria’s segment makes clear that the challenge is much bigger – and includes many other metals and minerals, including what we at ARPN have dubbed the “unsung hero of the green energy transition” and one of the “most critical non-criticals” (alluding to the fact that the U.S. official government critical minerals list has thus far not included it):

Copper.

As we previously argued, while less flashy and headline-grabbing that some of its tech metal peers, Copper deserves far more credit and attention than it has been getting — not least due to its versatility stemming from traditional uses and an increasing range of new applications.  Then there’s Copper’s Gateway Metal status, with the metal yielding access to Critical List co-products essential to “manufacturing the advanced technologies that will power or generations to come, such as Cobalt, Nickel, Tellurium, Molybdenum, Rhenium, Arsenic and REEs.

In the context of advanced energy technology, Copper is an indispensable component for the manufacture of EVs, wind turbines, solar panels, and 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 – so it’s good to see mainstream media is including the material in its coverage.

Zakaria rightly outlines the challenges stemming from the United States’ over-reliance on foreign supplies, and China’s having cornered the market not only in the supply, but also the processing segment – a challenge Laura Skaer, member of the board of directors of the Women’s Mining Coalition and former director of the American Exploration & Mining Association, outlined succinctly in a piece for Morning Consult a year ago, arguing that “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.”

While the U.S. has taken important steps to reduce our over-reliance on foreign metals and minerals and the processing thereof, much more remains to be done.  Zakaria puts his finger on the crux of the issue stakeholders are currently grappling with.

He says:

“The minerals industry isn’t as popular as renewable energy – particularly on the Left. There are real environmental hazards. But if people want to protect the planet from climate change and authoritarian powers, they will have to get onboard with new mineral projects.”

He continues:

“So far the process very slow, according to the IEA. Even after mineral deposits are discovered somewhere, the average time to production is over fifteen years. Some of that is planning and construction, but governments can streamline the permitting process to get these projects moving.”

While pointing to the importance of other components that ARPN has consistently highlighted as part of a comprehensive “all-of-the-above” approach to mineral resource security – recycling and closed-loop solutions as well as increased R&D in the materials science segment – Zakaria closes:

“This will have to remain a priority for years and years to come. For the sake of the planet and international security, we will need to dig deep, quite literally.” 

Watch the full segment:

CNN, Fareed Zakaria, Global Public Square, Last Look: The green transition will trigger a new race for natural resources, 4/30/2022

The post As Stakes Continue to Get Higher, Critical Minerals Challenge Goes Mainstream with Realization Issue Goes Beyond “Battery Criticals” appeared first on American Resources Policy Network.

While, as Reuter columnist Andy Home points out, “the initial impact is likely to be incremental rather than revolutionary,” observers and stakeholders hope that it will “will likely oil the wheels of domestic mining and refining” by “funding easy wins” and “low hanging fruit,” as Simon Moores, Managing Director of Benchmark Mineral Intelligence phrased it, and will set the stage for subsequent additional steps to support domestic mining and processing projects.

Russia’s recent invasion of Ukraine, and rising resource nationalism in various parts of the world, have raised the stakes for U.S. mineral resource security, as we have highlighted in several posts – but of course, as Home points out “’unreliable foreign sources’ is usually diplomatic code for China, when it comes to strategic metals.”

And while price surges for raw materials for EV and other automobile parts such as palladium, nickel, and aluminum in the wake of Russia’s war on Ukraine have certainly “open[ed] up new potential mineral hostilities and underlines the need for greater self-sufficiency,” Chinese “EV manufacturers grapple with rising raw material costs, shrinking margins,” as Tyler Durden reports for ZeroHedge – which will only add fuel to the fire as the global race for battery materials kicks into high gear.  Already, some observers are warning that China may attempt to exploit the current global focus on Ukraine to further bolster its critical mineral assets.

Meanwhile, automakers have begun securing their own supply chains, with Tesla leading the pack having signed several deals for nickel over the past few months in anticipation of a looming supply challenge. Followers of ARPN may recall his public direct plea to mining executives to “please mine more nickel” stating that his company would give them a “giant contract for a long period of time” if they mined nickel efficiently and in an environmentally sensitive way.”  Other EV manufacturers “are left scrambling,” as ZeroHedge’s Durden writes.

As such, the Defense Production invocation can and should be seen as, in the words of Reuters’s Home, “a federal government accelerator for a domestic battery metals supply chain that is still in its infancy” – but Homes believes that “[t]he real significance of invoking the DPA […] is that it elevates battery metals to the top of the U.S. critical materials supply list.”

Concludes Home invoking a “Back to the Future” theme:

“Industrial metals moved out of the geopolitical limelight after the 1970s, when successive oil shocks rocked the global economy. 

President Biden’s lithium echo of Truman’s [1952] steel warning [-- "Our national security and our chances for peace depend on our defense production, (and) our defense production depends on steel"--] tells you they’re rapidly returning to centre stage.”

The post The DPA in the Context of Russia’s Invasion of Ukraine and Chinese Strategy – “Back to the Future”? appeared first on American Resources Policy Network.

The emerging geopolitical landscape has sent countries scrambling to devise strategies to not only ensure steady supply of oil and gas in the wake of looming cuts of exports from Russia, one of the major global supplier of fuel minerals, but also to secure current and future needs of the non-fuel metals and minerals underpinning 21st century applications, ranging from green energy to defense technology.

Over the past few weeks, we have looked at how Russia’s war on Ukraine and rising resource nationalism in Central and South America and parts of Africa is affecting the global supply picture for titanium, lithium, nickel and cobalt.

As we end the week, we’re taking a look at copper – which often gets lost in the media shuffle.

Followers of ARPN know that while this mainstay metal may be less flashy and headline-grabbing than some of its tech metal peers, it deserves far more credit and attention than it is currently getting.  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 average EV 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.

The West’s severing of ties with resource-rich Russia has sent commodity prices skyrocketing. The Wall Street Journal this week cited a Morgan Stanley’s analysis which found that “there isn’t enough thermal coal, nickel, aluminum or palladium being produced to meet global demand this year. Other markets including copper, which were forecast to be in balance before the Ukraine conflict, could face material shortfalls if Russian supply dries up.”

This development comes less than a year after analysts warned that the world might be “running out of copper” amid widening supply and demand deficits, suggesting that prices could hit $20,000 per metric ton by 2025, and pointing to inventories at levels last seen 15 years ago.

As the Wall Street Journal points out, there is no easy way out of the critical mineral resource challenge, as “years of underinvestment in new mines means they don’t have additional production that can be brought on quickly. After a decadelong focus on productivity, existing operations are mostly running at full tilt. Difficulties in getting permits to build pits and community opposition have slowed developments in some countries, and scuttled projects in others.”

And, 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 piece for Morning Consult last summer, the challenge is not just mining, but also processing:

“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.” 

However, from a U.S. supply perspective, there is reason to be optimistic. While snubbing the material again for its updated Critical Minerals List, the Biden Administration has recognized 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” in its 100-Day Supply Chain Review report.

Coupled with new reports that “US regulators are warming to approving new domestic sources of electric vehicle battery metals, as Washington bids to avoid a reliance on strategic minerals imports similar to that on crude oil,” this is an encouraging development. In this context, U.S. Secretary of Energy Jennifer Granholm and other officials have been cited as stating that “the need to domestically produce more metals is rising as EVs go mainstream,” but that new mines must not harm the environment.

This is where the private sector is increasingly stepping up to the plate, with the latest case in point being a deal between Lion Copper and Rio Tinto America for a stake in copper assets in Mason Valley, Nevada, where the stakeholders will “explore the potential commercial deployment of (…) Nuton copper leaching technologies in a historical mining district with a large copper endowment,” and look to not only “unlock additional copper, but to also deliver low carbon production with significant environmental benefits through reprocessing old stockpiles and tailings, and reducing waste from new and ongoing operations.”

ARPN has featured other examples of industry harnessing advances in materials science and technology to help develop domestic critical mineral resource supplies while maintaining and advancing sustainable mining practices on numerous occasions, and will continue to do so.

As the National Mining Association’s Rich Nolan wrote earlier this week for RealClearEnergy:

“Russia’s invasion of Ukraine and its effect on global commodity markets has added new urgency to get to work. Fortunately, our challenge is one of policy, not geology. We have the resources to supply significant domestic production for many of the metals most essential to advanced energy technologies.” 

Now is the time to get serious about harnessing them.

The post The Reorganization of the Post-Cold War Geopolitical Landscape and its Impact on Critical Mineral Supply – A Look at Copper appeared first on American Resources Policy Network.

However, with most global supplies of the material coming from the Democratic Republic of the Congo, where mining conditions often involve unethical labor standards and child labor, as well as poor environmental standards, battery makers and researchers were in some cases beginning to turn to nickel as a substitute for cobalt — as in nickel-iron-aluminum cathodes, for example.

And here’s where environmental and human rights concerns intersect with geopolitics.

Russia’s ongoing war on Ukraine is increasingly straining nickel supply chains (see our latest post here).  As a result, analysts are keeping a close eye on cobalt, which could see prices go up as potentially persistent “elevated nickel prices could push demand from battery production back in cobalt’s direction.”

At the same time, concern over cobalt supply chains is mounting against the backdrop of a major court ruling in the Democratic Republic of the Congo, which, according to the Wall Street Journal’s What’s News podcast from March 14, has sent “shockwaves through the industry with potentially wide reaching implications for China, the US and the world.”

In the recent ruling, a DRC court appointed a temporary administrator from the state miner to effectively take control of China Molybdenum’s Tenke Fungurume mine amid a dispute between the shareholders over reserves of copper and cobalt. According to Reuters, the dispute began last fall, when the DRC’s government set up a commission to “reassess the reserves and resources at the mine (…) in order to ‘fairly lay claim to (its) rights,’” after alleging that the Chinese miner deprived the country of millions of dollars in annual payments for undeclared discoveries of copper and cobalt.

As WSJ correspondent for Uganda and Africa’s Great Lakes Region Nicholas Bariyo argues, the move appears to be part of a larger push by the DRC to take control of the lucrative cobalt industry. Says Bariyo:

“The DRC, despite having all these huge mineral resources remains one of the poorest countries in the world with a significant percentage of the population living under less than $2 a day and most of them unemployed and this widespread poverty. So in this case, the Congolese feel like they’re not benefiting so much from this mineral earth. And at the same time, when you look across the wider continent, commodity prices are skyrocketing and most of these resource rich nations tend to push for bigger share of proceeds from this industry as prices go up here. So this is something that is likely to really spiral beyond the Congolese border.” 

Developments in the DRC tie into an overall shift towards resource nationalism around the globe, as evidenced most recently in Central and South America, where the political tide “has turned decisively toward leaders who openly shun laissez-faire economics” and “a new generation of presidents and legislative leaders is advocating for greater government control of national economies, and with this trend, the specter of resource nationalism has once again gained a foothold in the region,” as Peter Schechter and Juan Cortiñas recently outlined in a  piece for Marsh McLennan’s Brink News.

All of which is to say that the newfound resolve of the Biden Administration to make “major investments in domestic production of key critical minerals and materials, ensuring these resources benefit the community, and creating good-paying, union jobs in sustainable production,” and new reports that “US regulators are warming to approving new domestic sources of electric vehicle battery metals, as Washington bids to avoid a reliance on strategic minerals imports similar to that on crude oil,” are a more than welcome development.

As Senators Lisa Murkowski (R-AK), Joe Manchin (D-WV),  James Risch (R-ID), and Bill Cassidy (R-LA) argued in a recent letter to President Biden urging the Administration to “invoke the Defense Production Act (DPA) to accelerate domestic production of lithium-ion battery materials, in particular graphite, manganese, cobalt, nickel, and lithium:”

“Allowing our foreign mineral dependence to persist is a growing threat to U.S. national security, and we need to take every step to address it. The 100-day report acknowledges the ‘powerful tool’ the DPA has been to expand production of supplies needed to combat COVID-19, as well as the potential the DPA could have to ‘support investment in other critical sectors and enable industry and government to collaborate more effectively.’  The time is now to grow, support, and encourage investment in the domestic production of graphite, manganese, cobalt, lithium, nickel, and other critical minerals to ensure we support our national security, and to fulfill our need for lithium-ion batteries – both for consumers and for the Department of Defense.”

As the world begins to realign in the wake of Russia’s attack on Ukraine and rising resource nationalism, it is becoming increasingly clear that the U.S. will have to harness our arguably vast domestic resource potential across the entire value chain — from mine to manufacturing – if we want to remain safe, secure and competitive in the 21st Century.

The post Russia’s War on Ukraine and Rising Resource Nationalism to Reshape Global Post-Cold War Order and Resource Supply Chains – A Look at Cobalt appeared first on American Resources Policy Network.

With Ukraine considered the “breadbasket of Europe,” Russia’s invasion of the country stands to take a toll on the food supply chain.   And, as the war enters its fourth week, the writing is on the wall: For European consumers, it’s 2020 all over again with empty shelves in the grocery store – just this time the run is not on the toilet paper aisle, but rather, pantry staples like flour and cooking oil.

On the critical minerals front, ARPN has discussed looming supply crunches and implications for the United States using the example of titanium, but effects of the war can be felt across the spectrum of critical minerals.

As a case in point, consider nickel.  With Russia’s assault on Ukraine deepening, nickel prices jumped as much as 250% in just two days earlier in March, leading the London Metal Exchange to suspend trading for the metal. As Reuters’s Andy Home observed, “[w]hat Russia terms its ‘special operation’ has broken the LME nickel contract and forced the exchange to impose emergency measures across the rest of its core base metal contracts.”  Nickel has since reached a decade high of $25,000 per ton.

A critical ingredient in lithium-ion battery technology, nickel’s abrupt price surge has analysts and investors worried about automakers’ electric-vehicle ambitions, which are at the heart of the global push for achieving net zero carbon emissions.

Even before Russia’s euphemistically self-proclaimed “special operation” in Ukraine, experts and stakeholders were raising the alarm about a likely supply shortage for nickel as automakers shifted to EV production, with warnings that global demand for EV battery grade nickel could outstrip supply by 2024.  Perhaps most famous is Tesla founder and CEO Elon Musk’s call on global mining companies to boost production of nickel in early 2020, when he publicly announced:

“Any mining companies out there … wherever you are in the world, please mine more nickel. (…)  Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way. (…) Don’t wait for nickel to go back to some high point you experienced five years ago (…).”

Thankfully, for U.S. consumers and manufacturers, the message appears to have begun to resonate, and while we can argue that it has taken far too long for U.S. stakeholders to realize the seriousness of the situation, there are indications for a momentum shift.

The Biden Administration last month announced several “major investments in domestic production of key critical minerals and materials, ensuring these resources benefit the community, and creating good-paying, union jobs in sustainable production,” following in the wake of the Administration’s 100-day supply chain report.

Meanwhile, with the stakes raised significantly in light of the war on Ukraine, U.S. Senators Lisa Murkowski (R-AK), Joe Manchin (D-WV), James Risch (R-ID), and Bill Cassidy (R-LA), sent a letter to President Biden last week urging the him to take congressional and Administration efforts to bolster mineral supply chains one step further and to “invoke the Defense Production Act (DPA) to accelerate domestic production of lithium-ion battery materials, in particular graphite, manganese, cobalt, nickel, and lithium.”

While President Joe Biden missed an opportunity to convey the urgency of the critical minerals supply challenge with the American people during his first State of the Union Address early this month, new reports that “US regulators are warming to approving new domestic sources of electric vehicle battery metals, as Washington bids to avoid a reliance on strategic minerals imports similar to that on crude oil,” are encouraging.

Mining Weekly cites U.S. Secretary of Energy Jennifer Granholm and other officials speaking at an energy conference earlier this week as stating that “the need to domestically produce more metals is rising as EV’s go mainstream, but that new mines must not harm the environment.”

The good news is that the mining industry is ready to meet this challenge. Having recognized “[its] responsibility and trying to meet the increased expectations of consumers, society and governments” to contribute towards the push towards a greener energy future, the industry  has increasingly been harnessing advances in materials science and technology to help develop domestic critical minerals supplies while maintaining and advancing responsible mining practices.

ARPN has highlighted industry initiatives on numerous occasions, and will continue to do so.

In the nickel realm, Tesla’s recent deal with Talon Metals Corp comes to mind, in which Elon Musk chose the company’s Tamarack mining project site in Minnesota, “due to plans to make the electric vehicle battery metal in a way it considers more environmentally friendly.”

Followers of ARPN may recall that this is the mine site for which the U.S. Department of Energy recently announced a $2.2. million award to fund to a Rio Tinto-led project with joint-venture partner Talon Metals Corp. 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.

As Senators Murkowski, Manchin, Risch, and Cassidy argued in their letter to President Biden:

“Allowing our foreign mineral dependence to persist is a growing threat to U.S. national security, and we need to take every step to address it. The 100-day report acknowledges the ‘powerful tool’ the DPA has been to expand production of supplies needed to combat COVID-19, as well as the potential the DPA could have to ‘support investment in other critical sectors and enable industry and government to collaborate more effectively.’  The time is now to grow, support, and encourage investment in the domestic production of graphite, manganese, cobalt, lithium, nickel, and other critical minerals to ensure we support our national security, and to fulfill our need for lithium-ion batteries – both for consumers and for the Department of Defense.”

The post Russia’s War on Ukraine Hits Critical Mineral Supply Chains: A Look at Nickel appeared first on American Resources Policy Network.

Against growing tensions, we recently highlighted mounting geopolitical pressures on critical mineral resource supply, but Russian President Vladimir Putin’s decision to launch a full-scale invasion of Ukraine on February 24, 2022, has raised the stakes, and infused a new level of urgency into the push to secure supply chains for mineral resources and other critical goods.

The invasion of Ukraine has serious implications for European energy supply. While some nations may attempt to fill a supply gap through inner European imports, Norway, Europe’s second largest oil supplier, is already operating at maximum capacity and won’t be able to replace any missing supplies from Russia.  Even before Russia launched its attack on February 24, Germany decided to halt the Nord Stream 2 gas pipeline certification process.

In a region that has already shut down old coal-fired power plants and partially phased out nuclear energy, the geopolitical challenges of mineral resource supply, the scope of which reaches far beyond natural gas (even if that is at the center of the current tensions), are becoming increasingly clear and pressing.

However, the ramifications of Russia’s actions stretch beyond well beyond natural gas, and well beyond Europe.

Russia is a global supplier of rare earth minerals and heavy metals including titanium, a key metal for the aerospace sector.   With Ukraine supplying more than 90% of U.S. semiconductor-grade neon, and about 35% of palladium, a material used in catalytic converters as well as semiconductors, being sourced from Russia, the current eruption of war in Ukraine could send the global chip industry, which is already seeing its supply chains severely strained, into turmoil.

The Russian invasion of Ukraine and its ramifications is hardly the only geopolitical challenge placing a strain on critical mineral supply chains.

As we pointed out earlier, a wave of resource nationalism is sweeping Central and South America, which is home to several key metals and minerals underpinning 21st century technology, and specifically the green energy transition.

Furthermore, the fact that China, a key player in the resource war theater which has long understood the strategic importance of critical minerals and dominates the supply chains for many metals and minerals, has entered into a “no limits” strategic partnership with Russia places an additional strain on U.S. (and broader Western) mineral resource security. Already, according to Oilprice.com writer Tsvetana Paraskova, “while the U.S. is working in working groups, China and Russia are moving in African countries rich in mineral resources to gain access to their reserves in legislations with low environmental standards, cheap labor, and few regulations.” Closer relations between the two global powers may intensify their activities in Africa, further complicating the resource challenge for the West.

Meanwhile, material pressures on critical mineral supply will continue to soar against the backdrop of the global push towards net zero carbon, which will require massive amounts of the metals and minerals underpinning the technology supporting the shift to renewables.

The stakes were already high before the Russian invasion of Ukraine, but they just got higher.

Against this backdrop, it is encouraging that the Biden Administration reaffirmed its commitment to securing U.S. critical mineral supply chains last week.

During a virtual event held on Tuesday, February 22, 2022 with Administration and state partners, industry executives, community representatives and California Governor Gavin Newsom, the Biden Administration and participating stakeholders announced several “major investments in domestic production of key critical minerals and materials, ensuring these resources benefit the community, and creating good-paying, union jobs in sustainable production.” 

These investments include:

-       A $35 million award by the Department of Defense’s Industrial Base Analysis and Sustainment program to MP Materials to “separate and process heavy rare earth elements at its facility in Mountain Pass, California, establishing a full end-to-end domestic permanent magnet supply chain.” To complement this award, MP Materials plans to invest an additional $700 million into the project.

-       Plans by Berkshire Hathaway Energy Renewables (BHE Renewables) to break ground on a demonstration facility in California “to test the commercial viability of their sustainable lithium extraction process from geothermal brine.” 

-       A pilot program by Redwood Materials in partnership with automakers Ford and Volvo for “collection and recycling of end-of-life lithium-ion batteries at its Nevada based facilities to extract lithium, cobalt, nickel, and graphite.” 

-       A $140 million DOE demonstration project, funded by the Bipartisan Infrastructure Law (BIL) to “recover rare earth elements and critical minerals from coal ash and other mine waste.”

-       A $3 billion investment, also funded by this year’s congressional infrastructure package, into “refining battery materials such as lithium, cobalt, nickel, and graphite, and battery recycling facilities.”

In conjunction with the event, the Department of Interior released its updated Federal list of critical minerals, which includes 15 more minerals than the first critical minerals list released in 2018, including nickel and zinc (see our coverage on the draft updated list here). Subsequently, the Administration “will direct agencies to prioritize the production and processing of minerals necessary to produce key products like batteries, semiconductors, and permanent magnets, consistent with our strong environmental, social and labor principles.” 

The Department of Interior (DOI) also announced the establishment of an Interagency Working Group (IWG) to lead an Administration effort on legislative and regulatory reform of mine permitting and oversight and submit recommendations to this effect by November of this year. The IWG has released a “list of Biden-Harris Administration fundamental principles for mining reform to promote responsible mining under strong social, environmental, and labor standards,” (which we will review in a separate post).

[See the Administration’s Fact Sheet for the Supply Chain Strategy Announcements here]

With the release of its 100-Day Supply Chain Report last summer, the Biden Administration had initially embraced the “all-of-the-above” approach to critical mineral resource security we and many others had called for.

This approach was set to encompass both investing in “sustainable production, refining, and recycling capacity domestically,” AND working to “diversify supply chains away from adversarial nations and sources with unacceptable environmental and labor standards” by cooperating closely with allies and partners.

However, since then, the overall plan to date appeared more geared towards “rely[ing] on ally countries to supply the bulk of the metals needed to build electric vehicles and focus[ing] on processing them domestically into battery parts, [as] part of a strategy designed to placate environmentalists.”

Last week’s announcements are encouraging, as they point to a broader realization that while “friend-shoring” and recycling are important components of a comprehensive critical mineral resource policy, as ARPN has long argued, a true “all-of-the-above” approach for a competitive United States of America warrants a stronger emphasis on domestic sourcing and production as part of the overall strategy.

The events unfolding in Ukraine underscore the urgency to act swiftly and comprehensively to secure our critical minerals supply chains.  The mining industry, as we have outlined on several occasions, is ready to meet the challenge and is leveraging the materials science revolution to sustainable develop and process the materials underpinning 21^st century technology.

President Biden’s State of the Union Address should reflect these new realities, and policy makers and other stakeholders must take comprehensive action to ensure that supply chain security can move from rhetoric to reality.

The post The Stakes Just Got Higher – The State of U.S. Critical Mineral Resource Security appeared first on American Resources Policy Network.

Using this what Ken Moritsugu writing for Military.com called “thinly veiled reference to the U.S. and its allies,” both leaders declared that relations between China and Russia “are developing in a progressive way with a spirit of friendship and strategic partnership,”  and “have indeed become unprecedented,” setting “an example of dignified relations that support mutual development,” as Mr. Putin phrased it.

According to the official Chinese Xinhua News Agency, Mr. Xi was quoted as saying that China and Russia are committed to “deepening back-to-back strategic cooperation,” representing a “strategic decision that has far reaching influence on China, Russia and the world” as the two nations confronted what Mr. Xi called “regional security threats” and “international strategic stability.”

While ties between the two countries are not new and Russia has long been a key supplier of oil, gas and coal for China, this very public declaration of a strategic deepening of relations between Moscow and Beijing should give pause to U.S. stakeholders, particularly from a critical minerals perspective.

Only a few days ago, the USGS released its latest Mineral Commodity Summaries report, once more underscoring U.S. overreliance on foreign, and especially Chinese critical minerals.   As we pointed out,

“ (…) against all pledges in recent years for the United States to reduce import reliance on supplies from China, the 2022 Mineral Commodity Summaries lists China 25 times as one of the major import sources of metals and minerals for which our net import reliance is 50% or greater, which is up by one.

Of course, the sourcing of critical minerals is only one segment of the supply chain, and, as a recent look at the complete clean energy supply chain by Visual Capitalist has revealed, China has not only established itself as a global lead supplier of critical minerals. The country has also established dominance in the processing segment.” (Take a look at our latest post on the issue here.)

While Russia may not appear quite as often on USGS’s chart depicting U.S. net import reliance, it is an import source for some key materials underpinning 21^st century technology, including Scandium, for which the U.S. is 100% import dependent.

The declaration of the “no limits” partnership between China and Russia comes at a time when geopolitical pressures on mineral resource policy, are on the rise.

[See our latest on the rise of resource nationalism in Central and South America here.]

Against the backdrop of the accelerating global green energy transition, the urgency of securing critical mineral resource supply chains should take center stage for U.S. policy makers, and for some time it seemed like it would.

This summer’s 100 Day Supply Chain report and subsequent policy statements pointed towards the adoption of an “all of the above” approach to mineral resource policy on the part of the Biden Administration.   However, as we previously pointed out,

“since then, the overall approach to date has appeared more geared towards “rely[ing] on ally countries to supply the bulk of the metals needed to build electric vehicles and focus[ing] on processing them domestically into battery parts, [as] part of a strategy designed to placate environmentalists.”

The Administration’s recent cancellation of a promising mining project in Minnesota, seems to all but confirm fears by observers that the Biden-Harris White House would turn to embrace an “activist-driven U.S. anti-mining policy,” as Duggan Flanakin, director of policy research at the Committee for a Constructive Tomorrow, phrased it in a recent piece that does not mince words for RealClearEnergy.

Efforts to “friend-shore” and deepen critical minerals cooperation with allies like Canada and Australia are welcome, but they are not sufficient to meet our massively increased (and ever-growing critical mineral needs).

The challenge only gets more pressing, as we previously outlined, “when we realize that “NIMBYism Is Global” – as was the headline for a recent piece by Forbes senior contributor David Blackmon zeroing in on what he called the ‘grand ironies in the whole energy transition narrative: The same class of left-leaning activists who promote wind and solar and electric vehicles (EVs) as the solution also oppose the mining of the lithium and other critical minerals necessary to make them work.’”

A look to our friends in Europe, where the Serbian government canceled Rio Tinto’s $2.4 billion lithium mining project in January over sustained NIMBY protests, suffices to confirm this.

The stakes are too high, and with geopolitical tensions rising, the time to embrace a comprehensive “all of the above” here in the U.S. – from “soup to nuts” or from mine to manufacturing is now.

The post Another Look at Geopolitical Pressures on Mineral Resource Policy: China’s and Russia’s “No Limits” Partnership Spells More Trouble appeared first on American Resources Policy Network.

Quite obviously, much of the media attention is focused around President Vladimir Putin’s declaration that Russia has approved a vaccine for the coronavirus (after less than two months of testing) — but developments in the critical minerals realm also warrant attention:

A top Russian government official has told Reuters that Russia plans an investment of $1.5 billion in rare earth minerals in its quest to become the biggest REE producer after China by 2030.

The move comes at a time when other countries, including the United States, are trying to curb their over-reliance on foreign critical minerals against the backdrop of growing tensions with China, which has long held the pole position in the race to control the global REE supply chain.

According to Reuters, Russia is looking to attract investors for eleven projects designed to increase the country’s share of global REE output to 10% by 2030, allowing for Russia to “become almost self-sufficient in rare earth elements by 2025 and start exports in 2026.”

While it appeared that U.S. efforts to promote domestic critical mineral resource development were finally gaining traction in the wake of the coronavirus pandemic having laid bare our mineral resource supply chain challenges and over-reliance on foreign (and especially Chinese) supplies, policy may once more become the victim of politics in this watershed election year. 

Reform-minded lawmakers have put forth several legislative initiatives, and have even formed a bipartisan “Critical Materials Caucus.”  However, while critical minerals provisions were added to the latest round of COVID relief stimulus packages, chances of their passage have been dwindling as partisan tensions continue to flare.
As attempts to keep the momentum for resource-related policy reform appear to have come to an impasse in Congress, researchers are forging ahead to provide innovative solutions that not only transform the way we use certain metals and minerals, but have the potential to help alleviate our over-reliance issues. 

The Department of Energy has stepped up its efforts to promote collaboration between its research hubs and the private sector to look for ways to diversify mineral resource supply, develop substitutes and drive recycling of critical minerals and rare earth elements. Some recent initiatives include “using a high-speed shredder that turns old computer hard drives into scrap containing significant amounts of REE content,” and “recovering nickel, cobalt and manganese from disassembled electric vehicle battery packs.”

Meanwhile, in the private sector, a rare earths pilot plant processing facility situated in Wheat Ridge, Colorado, which will focus on group separation on REEs in to heavy, middle, and light rare earths, has received the required permits and officially opened. According to media reports, “USA Rare Earth’s pilot plant is the second link in a 100% US-based rare earth oxide supply chain, drawing on feedstock from its Round Top deposit.”

Even before the coronavirus pandemic hit,  the U.S. had begun to enter into cooperative agreements with allied nations to ensure future supplies of critical materials, specifically with Canada and Australia. 

Against the backdrop of the upcoming 2020 elections, finding policy consensus may be more than an uphill battle.  However, for the sake of our national security and economic wellbeing, lawmakers would be well-advised to reach out across the political aisle to foster a policy environment that promotes an all-of-the-above approach on critical minerals and harnesses the United States’ vast domestic mineral potential.   

The post Russia Pushes for Global Rare Earth Market Share as U.S. Struggles to Move Forward With Critical Minerals Initiatives appeared first on American Resources Policy Network.