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American Resources Policy Network
Promoting the development of American mineral resources.
  • Time to Address the “Gaping Hole” in America’s Efforts to Secure Critical Mineral Supply Chains

     “The historic shift to electric vehicles will give the U.S. a fresh chance to achieve energy independence, but it will require complex strategic moves that won’t pay off for years,” writes Joann Muller in a new piece for Axios.

    A look at the numbers reveals that despite a noticeable push towards strengthening U.S. supply chains (we’ve featured some recent developments here“there is still a gaping hole in America’s efforts” according to JB Straubel, a co-founder of Tesla who has moved on to head up Redwood Materials, a battery component company planning to invest more than $2 billion to start building battery components as early as this year.

    Muller cites Jigar Shah, head of the Department of Energy’s Loan Program’s office, who says that the U.S. currently only possesses about 5% of the manufacturing capacity required to hit President Joe Biden’s ambitious declared goal of 50% of all vehicles sold in the U.S. being electric by 2030.

    Simon Moores, CEO of Benchmark Mineral Intelligence and Morgan Bazilian, Director of the Payne Institute and Professor of Public Policy at Colorado School of Mines, dig deeper into the numbers in a recent piece on the Benchmark Mineral Intelligence Blog, pointing out that while in 2015, 40% of the cost of a lithium ion battery was raw materials, that percentage has shot up to 80% in 2022.  Their conclusion: “[I]f EVs mean lithium ion batteries, EVs must now mean critical minerals and mining.”  Industry leaders like Tesla’s Elon Musk are openly mulling throwing their hats into the mining ring – but, as Moores and Bazilian write: 

    “OEMs [original equipment manufacturers] are right to be fearful and hesitant to want to ‘become miners’.

    Echoes of an ill-fated venture by Henry Ford to build rubber plantations in Brazil in the 1920s after the industry ran out of rubber tyres loom large. One hundred years on the industry faces an eerily similar problem.

    The reality is that this global EV blueprint is yet to be built out to a scale needed to reach surging consumer demand and increasing aggressive OEM and government targets… We are nowhere close.”

    Moores and Bazilian see the recent invocation of the Defense Production Act Title III by the Biden Administration to strengthen battery supply chains as a “major step forward” and “a move that it hopes will drag the finance community in to 21st century mining.” But as they conclude, the proof is in the pudding, and it goes back to a truly comprehensive “all-of-the-above” approach across the entire value chain that ARPN and others have been calling for.  The Administration has been embracing partnership with allies, and expanding recycling and closed-loop solutions, but has been guarded at best when it comes to domestic mining. According to Moores and Bazilian, that must change:

    “Big talk on EVs must now mean equally as big statements on mining. After all, a Gigafactory without secure raw materials is as useful to an OEM as a grain silo.” 

    As ARPN has said many times, the first word in supply chain…. is supply.

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  • The DPA in the Context of Russia’s Invasion of Ukraine and Chinese Strategy – “Back to the Future”?

    Stressing that the “The United States depends on unreliable foreign sources for many of the strategic and critical materials necessary for the clean energy,” specifically for EV and large capacity batteries, U.S. President Joe Biden invoked the Defense Production Act (DPA) to accelerate buildout of domestic supply chains via Presidential Determination earlier this month.

    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.”

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  • ARPN’s 2021 Word of the Year: Supply Chain

    ARPN’s Year in Review —   a Last Look Back at the United States’ Critical Mineral Resource Challenge in 2021 Well, two words, for the sticklers.  Merriam Webster may have gone with “vaccine,” but for ARPN, there was really no doubt. As one article put it, “2021 is the year ‘supply chain’ went from jargon to [...]
  • Podcast: Battery Tech Supply Chain Expert Simon Moores Discusses Lithium Challenge

    American Jobs Plan, Green New Deal … irrespective of whether these plans will get implemented fully or in part, the renewable energy transition is already here, and it’s here to stay. The renewable energy sector has been transforming at neck-breaking speed, and with that, demand for the metals and minerals underpinning the green energy shift [...]
  • A Pivotal Moment to “Get Serious About Building the Domestic Mineral Supply Chain”

    Last month, U.S. President Joe Biden signed an executive order instructing his economic and national security teams to conduct a 100 day review of four key U.S. supply chains across federal agencies to assess the nation’s “resiliency and capacity of the American manufacturing supply chains and defense industrial base to support national security [and] emergency [...]
  • Event Alert: Benchmark Webinar on Lithium Ion Battery, EV and Energy Storage Supply Chain Issues

    Against the backdrop of a new presidential executive order declaring a critical minerals “national emergency” for the United States, Benchmark Mineral Intelligence will host its “Washington DC Summit 2020 – Online” on Tuesday, October 20th, at 1p.m. EST. This year’s virtual summit will bring together U.S. Government representatives and industry stakeholders to discuss materials challenges [...]
  • Europe Forges Ahead With Battery Gigafactory Buildout As U.S. Still Struggles to Get Off Starting Block

    The current coronavirus pandemic may have thrown a wrench into the gears of many industries, but — against the backdrop of skyrocketing materials supply needs in the context of the green energy transition — Europe continues to forge ahead with the buildout of its large-scale battery gigafactory capacity.  According to London-based Benchmark Mineral Intelligence, whose [...]
  • Independence Day 2020 – Critical Mineral Resource Policy in a Watershed Year

    It’s that time of the year again – Independence Day is upon us.  This year, things are different, though. If you’re like us, it kind of snuck up on you, and it took seeing the booths selling fireworks in the parking lots to realize it’s July already.  After all, we just came off the longest month of [...]
  • Experts to U.S. Senators: It’s “Not Too Late for the U.S.” to Secure Mineral Supply Chains Post-COVID, “But Action is Needed Now”

    In a timely hearing before the U.S. Senate Committee on Energy and Natural Resources, witnesses discussed the urgency of securing U.S. mineral supply chains in a post-COVID context.  Committee Chair Sen. Lisa Murkowski (R-Alaska), who has long been an advocate of comprehensive mineral resource policy reform set the stage arguing that “[t]he pandemic has brought [...]
  • Event Alert – This Week: EV Supply Chain Festival 2020

    “Cancelled.”  It’s a word we’ve become all to familiar with in recent week.  Sports.  Concerts.  Conferences.  As a consequence of the current Coronavirus pandemic, we’ve seen a slew of festival cancellations in recent weeks.  Thankfully, 21st Century technology (powered by critical metals and minerals) has made it possible to shift over to virtual get-togethers, and [...]

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