The parades, barbecues, pool parties and fireworks to mark this year’s Independence Day are over.  There’s much to be thankful for, especially at a time when the impact of Russia’s war on Ukraine, now in its second year, reverberates around the globe and geopolitical tensions continue to mount.

ARPN has always used the occasion of Independence Day to remind ourselves that “while we cherish the freedom we are blessed with in so many ways, we must not become complacent, as there are areas where we’re increasingly becoming less independent” — with our reliance on foreign mineral resources being a case in point.

Thankfully, stakeholders are increasingly aware of the urgency to strengthen critical mineral supply chains, and, on the heels of a global pandemic, ongoing war between Russia and Ukraine, and growing resource nationalism, a flurry of activity has dominated the critical minerals space, ranging from domestic efforts over bilateral trade agreements to multilateral alliances.

For the U.S., a notable example of domestic efforts is the series of DPA Presidential Determinations involving specific Critical Minerals, beginning with President Trump’s July 2019 designation of the Rare Earth permanent magnet supply chain being designated as “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 – the “defense criticals” and designated airbreathing engines, advanced avionics navigation and guidance systems, and hypersonic systems and their “constituent materials” as priority DPA materials.

(for more on the Defense Criticals, read our post here.)

Followers of ARPN are further aware of policy initiatives like the United States’ Inflation Reduction Act (IRA) or the European Union’s Critical Raw Materials Act (CRMA), which are currently being followed by bilateral trade agreements, as well as U.S.-EU discussions to launch a “critical mineral club.”

While the United States and our partners have taken several important steps to decouple critical mineral supply chains from China, Beijing, having systematically built out its dominance across the entire value chain from mining over processing to manufacturing, still has a chokehold on many key critical minerals, and particularly the EV battery supply chain.

And for all of the recent U.S. policy efforts, the latest USGS Mineral Commodity Summaries report confirmed that our critical mineral dependencies still persist.

There is momentum to change this, however, as we have previously argued:

“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.”

As followers of ARPN well know, the stakes are too high to let the momentum for comprehensive reform fizzle.

With a new “Great Game” afoot in the global mineral resource realm (see our most recent post on the issue here), the U.S. must double down on its push to secure critical mineral supply chains from “soup to nuts” to borrow a term used by U.S. Energy Secretary Jennifer Granholm.

With the West’s resource dependence running deep, and Beijing’s determination to continue its global quest for resource dominance unbroken, the critical mineral arms race will continue to heat up.   Stakeholders here and elsewhere must gear up for the long haul.

As ARPN stated in a previous post, Rome wasn’t built in a day.

Neither was the United States of America.

But built it was, challenges were overcome — and we are celebrating the men and women who have fought for and continue to safeguard our freedoms this week.

Here’s hoping that one day we will be able to say the same for the critical mineral supply chains that anchor the technology economies of the 21st Century.

The post Independence Day 2023 — As We Celebrate Our Freedoms, (Resource) Dependency Still Looms Large appeared first on American Resources Policy Network.

This week, the Indian Ministry of Mines released a comprehensive Critical Minerals List, consisting of 30 metals and minerals deemed critical for India’s ambition for cleaner technologies in electronics, telecommunications, transport and defense, according to the government.

The list comprises the group of 17 rare earth elements (REEs) and six platinum group metals (PGMs) as complexes. It also encompasses four of what ARPN has dubbed the “battery criticals” lithium, cobalt, graphite and nickel (India’s list does not include manganese which rounds out the five battery criticals), as well as antimony, beryllium, bismuth, gallium, germanium, hafnium, indium, molybdenum, niobium, phosphorous, potash, rhenium, silicon, strontium, tantalum, tellurium, tin, titanium, tungsten, vanadium, zirconium, selenium, and cadmium.

Lastly, the list also includes copper, a mainstay metal and key component of the green energy transition which the United States has thus far failed to add to its own list of critical minerals in spite of numerous pushes for its addition.

According to Indian web news hub Rediff.com, the government plans to encourage public and private investment in exploration, mining and processing to secure the country’s critical mineral supply chains, and will seek to “facilitate the adoption of advanced technologies and international collaborations to enhance efficiency and environmental sustainability in the extraction and processing of critical minerals.”

One of the first such international collaborations was just made official during a state visit of India’s Prime Minister Narenda Modi to Washington, D.C. last week, where Modi and U.S. President Joe Biden announced the country’s joining of the Minerals Security Partnership alongside several bilateral and defense deals.

The MSP is a partnership between the United States, Canada, the United Kingdom, France, Germany, Japan, South Korea and several other countries convened in June 2022 as an initiative to bolster supply chains while aiming “to ensure that critical minerals are produced, processed, and recycled in a manner that supports countries in realizing the full economic development potential of their mineral resources.”

As the rest of the world aims to decouple its critical mineral supply chains from China, which has long dominated most of the critical minerals sector across all links of the supply chain, India is looking to harness its geopolitical wealth to become a “global hub for critical mineral production and reinforce its position as a major player in the global economy.”

In keeping with that objective, India’s recent moves have global implications.

At the beginning of this year, a New York Times piece called on G20 leaders gathering in Davos, Switzerland, to “pivot to the new reality provoked by the Covid-19 pandemic, the war in Ukraine, the growth of extreme inequalities and aggressive Russian and Chinese autocracies.” 

In the critical mineral realm, these recent events served as a catalyst for a new “Great Game,” which the geopolitics of mineral resource supply had triggered and which gained momentum with the adoption of the Paris agreement in 2015.

India’s recent critical mineral moves are highly relevant in the context of this new “Great Game,” particularly as relations between India and China are strained by an ongoing border conflict and growing regional rivalry, both of which are shaping South Asia’s security landscape and strategic environment.

With India having overtaken China as the world’s most populous country and set to become the third-largest economy in the coming years, India’s recent moves could be seen as a direct challenge by Beijing.

As Frédéric Grere and Manisha Reuter outline for the European Council on Foreign Relations, “New Delhi still exerts a dominant role in South Asia and, specifically, the Indian Ocean, but as China consolidates its position in the region, its attitude towards India has become more assertive. India remains resolute about preventing Chinese hegemony in Asia, repeatedly stressing that a multipolar world starts with a multipolar Asia, and seeking partnerships with a variety of countries, including the US and the EU. Beijing is concerned about India’s growing military ties with the US and tends to consider India’s intentions through the lens of its own rivalry with the US.”

The new Great Game may have just gotten Greater.

The post India Ups the Ante in New “Great Game,” Releases Critical Minerals List and Joins MSP appeared first on American Resources Policy Network.

2022 surely was as fast-paced a year as they come.

Didn’t we just throw overboard our New Year’s Resolutions?  We blinked, and it’s time for another review of what has happened in the past twelve months.

So with no further ado, here is ARPN’s annual attempt to take stock of what has happened on the critical mineral resources front in 2022 — to assess where we are, and, filled with hope for a New Year, where we are headed. 

Early 2022 —

As Covid Pressures Fade, Geopolitical and National Security Concerns Mount, While the Global Push Towards Net Zero Carbon Emissions Intensifies

Coming off two years of a global pandemic affecting virtually every aspect of our lives, the world was ready to take a collective deep breath.

The severity of the coronavirus strains had lessened, vaccines, therapeutics and treatment methods for Covid-19 became more readily available, many restrictions had been loosened or dropped, and global supply chains appeared to slowly recover and reorganize from the strain of lockdowns.

In the U.S. domestic critical minerals realm, against the backdrop of the accelerating global green energy transition, it appeared that stakeholders had learned their pandemic-induced lesson as the 2021 Biden Administration’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 to strengthen North American supply chains and decouple from adversaries, and especially China.   (see our 2021 Year in Review post for more)

However, any sense of collective relief was short-lived.

Only weeks into 2022, geopolitical tensions were rising fast with China and Russia declaring a “no limits” partnership in the face of what both nations perceived as “interference in the internal affairs” of other states by “some forces representing a minority on the world stage” which “continue to advocate unilateral approaches to resolving international problems and resort to military policy.”  

Resource nationalism began rearing its head in the Southern Hemisphere, which, often overlooked in the policy discourse, is no less crucial in the global race for critical mineral resources and has emerged as a major source of renewable energy metals and minerals.  Argentina, Bolivia, and Chile, which form the so-called Lithium Triangle — home to more than half of the world’s known lithium reserves — were central to this new development, but other countries in the region, like Mexico, are also in the critical minerals business.  Specific developments varied from country to country (for more on the issue click here), but in each case, the trend toward resource nationalism was unmistakable.

Against the backdrop of a global lithium market expected to grow by 500% in the next 35 years, developers in Argentina, Bolivia, Chile and possibly Peru were even reportedly evaluating the possibility of creating an OPEC-like lithium cartel.  While observers contended that it was “important not to confuse this resource nationalism with predictions of a highly ideological leftward turn,” the underlying implications for U.S. critical mineral resource supply chains as U.S. demand for lithium and other green energy critical materials continues to grow are not to be dismissed.

Meanwhile, countries around the globe forged ahead with their pursuit of net zero carbon emissions, with up to 20 countries to date having have announced phase-out bans on internal combustion engine car sales over the next 10 to 30 years.

But the watershed moment for 2022 was undoubtedly Russian President Vladimir Putin’s decision to launch a full-scale invasion of Ukraine on February 24.  While the ongoing war has serious implications for European energy supply, the ramifications of Russia’s actions stretch well beyond oil and natural gas, and well beyond Europe.

Russia’s war on Ukraine set off a potential realignment of critical mineral resource supply chains that warrants attention.  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 began turning to China to plug shortfalls.

As ARPN cautioned earlier this year:

“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.”

By mid-March of 2022, a confluence of factors — pandemic-induced supply chain shocks, increasing resource nationalism in various parts of the world, and Russia’s invasion of Ukraine — had completely altered the Post-Cold War geopolitical landscape and mineral resource security calculus.

Critical Mineral Security = National Security. President Joe Biden Invokes Defense Production Act 

Responding to the resulting growing pressures on critical mineral supply chains and skyrocketing demand scenarios, 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 via Presidential Determination No. 2022-1.

The Presidential Determination instructs the Secretary of Defense to “create, maintain, protect, expand, or restore sustainable and responsible domestic production capabilities of such strategic and critical materials by supporting feasibility studies for mature mining, beneficiation, and value-added processing projects; by-product and co-product production at existing mining, mine waste reclamation, and other industrial facilities; mining, beneficiation, and value-added processing modernization to increase productivity, environmental sustainability, and workforce safety; and any other such activities authorized under section 303(a)(1) of the Act.”

Observers and stakeholders hoped that the presidential determination would “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 set the stage for subsequent additional steps to support domestic mining and processing projects.

Mid 2022 –

A New Great Game?

Post-Cold War Realignment Spurs Domestic and Global Efforts to Strengthen Critical Mineral Supply Chains

Over the course of the following weeks and months, awareness of the importance of securing critical mineral supply chains and decoupling from adversaries, i.e. China, against the backdrop of an increasingly volatile geopolitical landscape and mounting environmental pressures continued to grow, not just domestically, but also amongst the United States’ key allies.

In the eyes of Globe and Mail (Canada) columnist Robert Muggah, the geopolitics of mineral resource supply had triggered a new “Great Game” -   a term coined by British writer Rudyard Kipling to describe the “fierce competition between Victorian Britain and Tsarist Russia, both of which sought to control South Asia and Africa” which “went on to shape geopolitics for much of the rest of the 19th and 20th centuries.”

Said new Great Game, according to Muggah, foreshadowed by the 2010 rare earths dispute between China and Japan, gained momentum with the adoption of the Paris Agreement in 2015 which committed countries to significantly reduce greenhouse gases and transition to renewables, and prompted Western nations to rethink and reorganize their supply chains.

As 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 suggest:

“Where 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.”

In July, the United States and allied countries announced the formation of a new cooperative initiative to bolster critical mineral supplies. The Minerals Security Partnership (MSP) comprises the United States, Canada, Australia, Finland, France, Germany, Japan, the Republic of Korea, Sweden, the United Kingdom and the European Commission, and seeks to “ensure that critical minerals are produced, processed, and recycled in a manner that supports the ability of countries to realize the full economic development benefit of their geological endowments.”

Observers like Reuter’s Andy Home posited that the formation of the MSP might signify a post-Cold War “tectonic realignment with far-reaching implications” as it — against the backdrop of Russia’s war on Ukraine and mounting tension with China — is “defined as much as anything by who is not on the invite list — China and Russia.” Arguing that a “previously highly globalized minerals supply network looks set to split into politically polarized spheres of influence” he suggested that a “metallic NATO [was] starting to take shape, though no-one [was] calling it that just yet.”

U.S. Congress “Net-Zeroes” in on Critical Mineral Supply Chains, Passes Inflation Reduction Act

In August of 2022, the U.S. Congress passed and President Joe Biden signed the Inflation Reduction Act, which includes combined investments of $369 billion aimed at reducing carbon emissions by roughly 40% by the end of this decade.

A swath of significant clean energy tax credits aims at increasing domestic energy production while at the same time accelerating energy innovation abroad.

The package further includes funding for tax credits and rebates for consumers buying electric vehicles, installing solar panels or making other energy-efficiency upgrades to their homes, including, a credit of $4,000 for lower-and middle-income individuals purchasing used EVs, and up to $7,500 tax credits for EVs.  These represent a renewal of the existing $7,500 electric vehicle Federal tax credit starting in January of 2023, and carrying it through until the end of 2032. The former 200,000-vehicle cap is removed and all manufacturers will have access to the credits if they comply with the other requirements in the package.

However – and of considerable interest for followers of ARPN — a new requirement is that 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.”

Experts like John Adams, U.S. Army brigadier general (ret.), believed the sourcing requirements for the battery materials contained in the package would become key to addressing “emerging energy security vulnerabilities before they are intractable crises,” while others have cautioned that because the auto industry was so heavily reliant on battery materials and components from China that the requirement would represent an almost insurmountable challenge in light of lagging timelines for mine permitting.  These concerns notwithstanding, the provisions have sent a strong signal to investors that the United States is serious about “building the secure responsible industrial base our economy and national security needs,” kicking off a flurry of activity in the industry.

Fall/Winter 2022 –

Regulatory Changes Prompt Rethink As China Tightens Reins on Supply Chains 

Energy Provisions in Inflation Reduction Act Spur Efforts to Build Out U.S. Battery Supply Chain, as States Step Up Their Own Efforts

In October of 2022, As part of the implementation of the 2021 infrastructure law, the U.S. Department of Energy announced the first round of funding under the Act for projects aimed at “supercharging” U.S. manufacturing of batteries for electric vehicles and electric grid.

Awardees — a total of 20 companies — will receive a combined $2.8 billion “to build and expand commercial scale facilities in 12 states to extract and process lithium, graphite and other battery materials, manufacture components, and demonstrate new approaches, including manufacturing components from recycled materials.”

Meanwhile, adapting to “recent regulatory changes and intensifying competition over key battery raw materials,” automakers, miners and suppliers have begun to rethink and reorganize their critical mineral supply chains.  ARPN featured several examples (see here and here) of new offtake agreements  and contracts between battery makers and mining companies – and even states and cities are getting in on the action, entering into partnerships with and offering incentive packages to mining companies to cultivate a “vertically integrate supply chain that will help companies increase efficiencies by reducing the reliance on imported materials,” as Georgia Governor Bryan P. Kempdescribed the rationale for a new battery plant construction partnership in Georgia.

Tying into the overall push towards net zero carbon emissions, these agreements increasingly leverage advances in materials science and technology as the mining industry has made strides towards balancing modern mining practices and environmental protections in the quest to sustainably green our future.

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

Xi’s China – Beijing’s Tightening of Reins Underscores Urgency of Decoupling Critical Mineral Supply Chains from China

Also in October, China’s Communist Party confirmed President Xi Jinping for another term in office.  In what effectively amounted to a “coronation,” as the Wall Street Journal editorial board phrased it, the CCP’s move has effectively “confirm[ed] China’s combination of aggressive nationalism and Communist ideology that is the single biggest threat to world freedom.”  Xi has since reaffirmed the need to increase China’s self-sufficiency in technology and supply chains, and China’s commitment to attaining control over Taiwan — a key point of contention in the country’s relations with the United States, which have already starkly deteriorated in recent years.  According to the Wall Street Journal, the “coronation” “all but guarantees an era of confrontation between China and the U.S.”

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

Since then, with a newly emboldened Xi at the helm, the Chinese government has been actively tightening the reins on its critical mineral supply chains. Most recently, according to news reports, the Chinese Ministry of Industry and Information Technology announced plans to increase its supervision of China’s lithium battery supply chain, which, according to the ministry, is “severely unbalanced.”

Efforts to decouple supply chains from China may become “all the more pressing in light of current fears that (…) China may retaliate after the U.S. Department of Commerce announced sweeping limitations to semiconductor and chip-making equipment sales to Chinese customers this fall.” 

2022 Reality Check

– The Real World Challenges of “Decoupling” -

Against the backdrop of a growing realization that “China has big footed a lot of the technology and supply chains that could end up making us vulnerable if we don’t develop our own supply chains,” as U.S. Secretary of Energy Jennifer Granholm phrased it earlier this summer, the push to decouple critical mineral supply chains from China has been one of the emerging key trend lines of 2022.

However, in spite of having made it de facto policy, it appears that Biden Administration officials are becoming increasingly wary of the term “decoupling” – as evidenced most recently by U.S. Secretary of Commerce stating explicitly that the United States is “not seeking a decoupling from China” in a policy speech on U.S. Competition with China.  This development may be rooted in the fact that, in light of the complexity of critical mineral supply chains, the process of “decoupling” is fraught with more significant real world challenges than some would have thought.

Earlier this summer, a RealClearInvestigations exposé discussed the alleged China connections of a domestic lithium extraction project in Nevada, where, as RealClear’s Steve Miller writes “a Chinese-dominated mining company has procured millions of dollars in American subsidies to extract lithium in the United States – but, given a dearth of U.S. processing capacity, the mineral is likely to be sent to China with no guarantee that the end product would return as batteries to power President Biden’s envisioned green economy.

The Nevada project is still in the permitting process, but similar scenarios have already unfolded elsewhere, such as in the case of rare earths magnets used in engine parts for F-35 fighter jets, where the U.S. Department of Defense has resorted to granting a waiver for sourcing requirements because at the current time acquisition of parts without Chinese components is not possible.  While the U.S.’s national security imperatives may make a rare earth waiver unavoidable, it should serve to turbo-charge domestic rare earth supply chain development to break the U.S. Armed Services’ Chinese rare earth dependency once and for all.

Of course, experts have long warned that decoupling supply chains for lithium, for example represents a formidable challenge.

As Simon Moores, chief executive of Benchmark Mineral Intelligence argued in the wake of the passage of the Inflation Reduction Act, “[c]onsidering it takes seven years to build a mine and refining plant but only 24 months to build a battery plant, the best part of this decade is needed to establish an entirely new industry in the United States.”

Meanwhile, the not-in-my-backyard (NIMBY) challenge, becoming increasingly prominent in 2021, continues to represent a significant hurdle for shoring up domestic supply chain security, particularly as it now appears that its newest manifestation, “virtual weaponized NIMBYism” in the form of concerted cyber warfare campaigns in which networks of inauthentic accounts across social media platforms, websites and forums pose as local residents opposed to certain mining or processing projects.

(see our post on virtual weaponized NIMBYism here) 

Interestingly, and underscoring that the critical minerals challenge has gone mainstream it was CNN’s Fareed Zakaria, who put his finger on the crux of the issue stakeholders are currently grappling with in a TV segment this summer. He said:

“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.”

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 arena – Zakaria closed his segment as follows:

“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.” 

2022 – Metals in Focus

Government Critical Minerals List, Rare Earths and the Battery Criticals 

While USGS released its second government critical minerals list in February of 2022 (an update to the 2018 list of 35) featuring 50 metals and minerals deemed critical to United States national security and economic wellbeing, this year’s media coverage might have you believe that all that matters when it comes to securing critical mineral supply chains, is the rare earths and the battery criticals (Lithium, Cobalt, Graphite, Nickel, and Manganese).

And even here, initially, lithium appeared to steal the spotlight – after all, much of the green energy transition is fueled by Lithium-Ion technology.

In recent months, this has shifted.

Cobalt

With the U.S. Department of Labor including lithium-ion batteries into its “list of Goods Produced by Child Labor or Forced Labor” – a list of 158 goods from 77 countries assumed to be produced in violation of international standards regarding child or forced labor, tracking the cobalt supply chain is becoming increasingly important and the added scrutiny of labor practices for cobalt adds increased urgency for U.S. policy and other stakeholders to build out a North American supply chain.

Nickel

With Indonesia’s investment minister hinting at the possibility of Jakarta pursuing the creation of an OPEC-like cartelfor nickel (and other key battery materials), the spotlight is falling on nickel.

the looming specter of battery material cartelization – first introduced earlier this year by South American Lithium producers — should be reason enough for U.S. stakeholders to kick the buildout of domestic battery supply chains into high gear wherever possible.

As recent U.S. developments suggest, efforts are already underway.

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.  As ARPN has noted, the 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.

Graphite

Graphite has also entered the chat.  As the key raw material in the battery anode, graphite is the largest component of lithium-ion batteries by weight. In light of “phenomenal demand growth from the EV battery sector and delays to new capacity as well as rising power costs,” the graphite supply chain represents a significant and growing challenge for automakers looking to reduce the carbon footprint of the materials they use for their EVs.

Currently, according to the USGS, the United States is 100% import dependent for its graphite needs, but as ARPN recently pointed out,

“that’s not for lack of known graphite resources.  As USGS noted in February 2022 in its updated U.S. Mineral Deposit Database, Graphite One’s Graphite Creek deposit near Nome, Alaska is America’s largest graphite deposit.  If U.S. Government efforts to develop an American-based EV and lithium-ion battery supply chain have any hope of succeeding, looking for ways to help projects like Graphite Creek down the path to production will be, in a word…. Critical.”

Until then, China’s battery anode dominance could be the West’s Achilles heel in the green energy transition – in defense planners parlance, a potential “single point of failure”:  irrespective of whether we succeed in developing multiple minerals and metals for the battery cathode, if we are unable to meet anode material needs – and we cannot do so sustainably and ESG-friendly without natural graphite — we will not be able to build a rechargeable battery independent of China.

New Focus: The Super-Criticals 

Altogether, a new set of critical minerals appears emerge as a key priority for stakeholders.

What ARPN has dubbed the “super-criticals” – the five battery materials, plus a sub-set of five rare earths required for permanent magnets (neodymium, praseodymium, dysprosium, terbium and samarium) altogether comprise a group of 10 criticals within the 50 critical minerals on the official U.S. government list, and many of the efforts to build out a secure North American critical minerals supply chain are focused on this group of materials.  By June, courtesy of another DPA Presidential Determination, platinum and palladium pushed the super-critical list to 12.

All-of-the-Above and Supply Chains in 2022

At the end of 2021, ARPN suggested that if the term “supply chain” could “move from jargon to meme in 2021,” maybe 2022 could be the year that strengthening supply chains could “move from rhetoric to reality” – and in some ways it was.

As outlined above, much progress was made, including important groundwork to build out a secure North American critical minerals supply chain.  However, much more remains to be done, and to overcome the many challenges, new alliances will need to be forged.

As Shane Lasley argues in Critical Minerals Alliances 2022, a magazine covering 29 metals and minerals (when counting rare earths as 14)  deemed critical to North American supply chains as well as related policy issues:

 “The 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.”

And so the stage is set for 2023, as decisions to come will determine national fortunes and human progress in decades ahead.

The post 2022 – ARPN’s YEAR IN REVIEW appeared first on American Resources Policy Network.

In a letter to the Departments of the Interior (DOI) and Agriculture (USDA), Alaska Senators Lisa Murkowski and Dan Sullivan were joined by Idaho Senators James E. Risch and Mike Crapo, as well as North Dakota Senator Kevin Cramer, in calling out the agencies for their failure to meet a statutory deadline to produce a report outlining options to improve the federal mineral permitting process within a year of enactment of the Infrastructure Investment and Jobs Act signed into law on November 15, 2021.

Specifically, the Senators point to Section 40206 of the Act, laying out nine specific ways to improve permitting and state that “the nine improvement priorities and the report are the basis of a new performance metric […] to meet the permitting and review process improvements it requires and will serve as the basis of new annual reporting to Congress to accompany the President’s budget.”

They lament that “DOI and USDA have outwardly paid little attention to [these serious and substantial requirements that represent a first step to address serious deficiencies in the federal permitting process] and internally appear to have devoted critical resources to discretionary projects that trace back to Executive Orders, rather than legally binding federal statutes,” and ask several specific questions.

See the full letter here.

The Senators’ letter touches on an important issue.  As ARPN previously outlined:

“While it is certainly encouraging that these developments are not only underway but are also increasingly making headlines and garnering the attention of the American people, it is important to ensure that legislative efforts to strengthen our nation’s critical mineral supply chains are not only enacted, but actually implemented, and that timelines set forth in enacted legislation are in fact met.” 

Earlier in May, 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, raised similar concerns in a series of joint letters to key members of the Biden Administration.

Federal mine permitting reform is an importance piece of the “all-of-the-above” puzzle.  With geopolitical stakes continuing to mount and the midterm elections slowly fading into the background, here’s hoping that U.S. stakeholders are ready to not only talk the talk on strengthening U.S. critical mineral supply chains, but also walk the walk.

The post As Stakes Mount, U.S. Senators Lament Agencies’ Failure to Meet Timelines for Permitting Report Required by Federal Law appeared first on American Resources Policy Network.

As the Wall Street Journal reports, Norwegian battery maker Freyr and energy conglomerate Koch Industries Inc., are accelerating plans to build a multibillion dollar battery plant in Coweta County, Georgia, with Freyr’s CEO Tom Einar Jensen citing the IRA as the reason for speeding up the partnership’s timeline.

Unlike many other projects, which are heavily focused on the EV battery value chain, the Koch Industries/Freyr partnership will supply lithium-Ion batteries primarily for the energy storage market.

According to the Wall Street Journal, “the first phase of the project in Coweta County, Ga., will bring online 34 gigawatt-hours of annual cell production at a projected cost of $1.7 billion. (…)  A second phase to expand the Georgia plant could increase the cell capacity further and add production of complete energy-storage units or battery inputs such as cathodes or anodes. The total investment is expected to reach $2.6 billion by 2029.”

The project, which is expected to create more than 720 jobs, is another case in point for states taking on a more active role in securing critical mineral supply chains.

According to Jensen, the partners decided to locate the project in Coweta County “in part because of an undisclosed financial package the county offered together with the state of Georgia.”  As outlined in the press release issued by Governor Bryan P. Kemp’s office on the project, the state is looking to cultivate a “vertically integrated supply chain that will help companies increase efficiencies by reducing the reliance on imported materials.”

Earlier this fall, the State of Michigan approved a “more than $200 million grant for Our Next Energy Inc.’s (ONE) planned EV battery factory in Van Buren Township, Michigan.  The company, an EV battery startup spearheaded by a former leader of Apple Inc.’s secretive car project, plans to invest $1.6 billion into the project, which is slated to be fully operational by the end of 2027 and have the capacity make battery cells for about 200,000 EVs annually.”

Also in October, the State of Louisiana entered into a partnership with Ucore with a significant incentive package to establish a rare earth separation facility in the state.  The package includes $9.6M in tax incentives and payroll rebates over the first ten years of operation.

Even some cities are getting into the act.  In June, the city of Stillwater, Oklahoma approved a $7 million incentive package for USA Rare Earth’s vertically-integrated rare earth metallization and permanent magnet manufacturing plant, a $100 million investment.  The company recently announced it will partner with Oklahoma State University on materials science initiatives.

States like Oklahoma, Texas and Kansas have also attracted EV battery makers as automakers scramble to lock down supplies and policy stakeholders work to create frameworks conducive to attracting investment into these critical industries.

In the coming weeks and months, ARPN will continue to feature more examples of state level public-private cooperation or formalized public private partnerships (PPPs) to sustainably strengthen domestic critical mineral supply chains.

The post Energy Provisions in Inflation Reduction Act Spur Efforts to Build Out U.S. Battery Supply Chain, as States Step Up Their Own Efforts appeared first on American Resources Policy Network.

While for some time, much of the “battery critical” focus was primarily on lithium, this has shifted. See our recent pieces on graphite and cobalt here and here, respectively. Now, 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 metals) the spotlight is falling on nickel.

As the largest nickel producer with the largest known reserves of the material, Indonesia is considered the “nickel capital of the world.”

As the Financial Times reports, the country’s investment minister Bahlil Lahdalia declared in an interview that the Indonesian government is studying “the possibility to form a (…)  governance structure [similar to OPEC] with regards to the minerals we have, including nickel, cobalt and manganese” adding that he saw “the merit of creating OPEC to manage the governance of oil trade to ensure predictability for potential investors and consumers.”

Observers were quick to point out that “any attempt to form a cartel to control global prices for nickel would be far from straightforward.”

Writes Tsvetana Paraskova for Oilprice.com:

“Unlike the oil resources of OPEC’s producers, the mining operations in Indonesia and other major nickel producers are controlled by various private companies or Chinese entities. Moreover, the biggest producers and holders of nickel deposits are a diverse group of countries with very different political and market conditions and unlikely to have common ground and interests in forming a cartel.”

However, the looming specter of battery material cartelization – first introduced earlier this year by South American Lithium producers — should be reason enough for U.S. stakeholders to kick the buildout of domestic battery supply chains into high gear wherever possible.

As recent U.S. developments suggest, efforts are already underway.

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.  As ARPN has noted, the 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.

With talk of nickel cartels and resource nationalism on the rise, the establishment of a secure U.S. nickel supply chain can’t come soon enough.

The post Specter of Cartelization in “Battery Criticals” Segment Should Kick Efforts to Bolster Domestic Supply Chains into High Gear — A Look at Nickel appeared first on American Resources Policy Network.

While stakeholders have taken some important steps to decouple from China in the wake of critical mineral supply chain wake-up calls against the backdrop of the coronavirus pandemic and rising geopolitical tensions, we are still — and likely will be for a while — at the mercy of China when it comes to securing our EV battery supply chains, which are at the core of the green energy transition.

As Benchmark outlines,

“While most of the world’s lithium, nickel, cobalt, and manganese for batteries is mined outside of China, the majority of all critical minerals for the battery supply chain are further refined and processed in China.

With the exception of mining, China controls at least half of the supply from every step needed to make a lithium ion battery.”

As if “at least half” wasn’t scary enough, let’s take a look at graphite — a key ingredient for the anode side of Lithium-ion batteries:  According to Benchmark Mineral Intelligence, China mines 64% of natural flake graphite, and it has a “monopoly on converting [it] into the spherical graphite needed for anodes.” 

It gets worse from there. Says Benchmark Mineral Intelligence:

“In 2022, Benchmark forecasts 70% of all batteries will be made in China. This is supported by strong control of the midstream, with a near monopoly over anode production and over three-quarters of cathode production.”

Right now, according to the U.S. Geological Survey, the U.S. is 100% import-dependent for graphite.  But that’s not for lack of known graphite resources.  As USGS noted in February 2022 in its updated U.S. Mineral Deposit Database, Graphite One’s Graphite Creek deposit near Nome, Alaska is America’s largest graphite deposit.  If U.S. Government efforts to develop an American-based EV and lithium-ion battery supply chain have any hope of succeeding, looking for ways to help projects like Graphite Creek down the path to production will be, in a word…. Critical.

Until then, China’s battery anode dominance could be the West’s Achilles heel in the green energy transition – in defense planners parlance, a potential “single point of failure”:  irrespective of whether we succeed in developing multiple minerals and metals for the battery cathode, if we can’t meet anode material needs – and we cannot without natural graphite — we can’t build a rechargeable battery independent of China.  Scary thought, indeed.

The sourcing provisions in the energy passages of the recently passed Inflation Reduction Act, coupled with the recently announced grants to “supercharge” U.S. EV battery and electric grid supply chains are important steps towards mitigating that potential single point of failure.  However, considering the long timelines for permitting for mining and processing projects, decoupling and building out a battery supply chain independent of China will warrant a concerted effort by stakeholders and policy makers to decouple from China.

Are we scared enough to take on the challenge?

The post A Frightening Graphic Just in Time for Halloween: Is the Anode Our Achilles Heel When it Comes to Building out a Battery Supply Chain Independent of China? appeared first on American Resources Policy Network.

In what effectively amounted to a “coronation,” as the Wall Street Journal editorial board phrased it, the CCP’s move has effectively “confirm[ed] China’s combination of aggressive nationalism and Communist ideology that is the single biggest threat to world freedom.” 

Mr. Xi’s confirmation to another term was hardly a surprise, but in his landmark speech addressing the CCP Congress, he emphasized the the need to increase China’s self-sufficiency in technology and supply chains, and reaffirmed China’s commitment to attaining control over Taiwan — a key point of contention in the country’s relations with the United States, which have already starkly deteriorated in recent years.  According to the Wall Street Journal, the “coronation” “all but guarantees an era of confrontation between China and the U.S.”

Aware that “China has big footed a lot of the technology and supply chains that could end up making us vulnerable if we don’t develop our own supply chains,” as U.S. Secretary of Energy Jennifer Granholm phrased it earlier this summer, the United States and its partners have stepped up efforts to decouple from China.

These may become all the more pressing in light of current fears, as Damon Kitney reports for The Australian, that China may seek to retaliate after the U.S. Department of Commerce announced sweeping limitations to semiconductor and chip-making equipment sales to Chinese customers this fall.

Speaking to a private forum in Melbourne, earlier this month, Australia’s former Ambassador to the U.S. and federal Treasurer Joe Hockey told attendees:

“In terms of critical minerals, my concern is – and there has started to be a few reports in the US suggesting this – is that after the midterm elections, and with a re-empowered (Chinese President) Xi Jinping, as of next year China will start to turn down the tap on the supply of critical minerals to the US and other places.”

Followers of ARPN have long known that China is no stranger to playing politics with its near-total rare earths supply monopoly, and just last year, we saw the country threatening to limit rare earth shipments to U.S. defense contractors over U.S. arms sales to Taiwan.

Thankfully, U.S. domestic efforts to bolster supply chains can be complemented with leveraging close cooperation with allied nations including Canada and Australia.

Australia is ready to step up its rare earths game and challenge China in this segment.  As Phil Mercer writes for BBC News, Sydney, “Australia, a superpower exporter of iron ore and coal with rich mining traditions believes it is well-placed to join the race to exploit minerals that provide critical parts for electric vehicles and wind turbines.” He cites John Coyne of the Australian Strategic Policy Institute, who — while warning that China will not easily surrender its dominance of the sector — says:

“Australia has the world’s sixth-largest reserves of rare earth minerals. However, they remain largely untapped with only two mines producing them.  There is significant potential in the establishment of multi-ore mineral-processing hubs in Australia. After all, there is no point in creating supply chain resilience for [rare earth] ores if miners must still send them to China for processing.”

Mercer points to the U.S. Defense Department’s deal with Australian miner Lynas Rare Earths, which has been contracted to construct a REE processing facility in the U.S..

In the same vein,  the Canadian government has inked an agreement with Rio Tinto to jointly invest $737 million to modernize the company’s Sorel-Tracy, Quebec metals processing plant, with  Rio Tinto’ chief executive Jakob Stausholm warning of the “excesses of globalization” in critical mineral supply chains. The move is said to strengthen “North America’s first production capacity for titanium metal, a lightweight but strong material important to aerospace and defense groups such as Boeing and Lockheed Martin.” 

Stateside, the U.S. Department of Energy has just announced the first round of funding under the 2021 bipartisan infrastructure act for projects aimed at “supercharging” U.S. manufacturing of batteries for electric vehicles and electric grid — another important step in the decoupling from adversaries like China.

With a newly-emboldened Mr. Xi reportedly seeing the possibility of a showdown with the West as “increasingly likely”in the context of his goal to “restore China to what he believes is its rightful place as a global player and a peer of the U.S,” as the Wall Street Journal writes, these efforts could not be more urgent.

The post President Xi Jinping’s “Coronation” Adds Fuel to the Fire to Decouple Critical Mineral Supply Chains from China appeared first on American Resources Policy Network.

The mass-adoption of green technologies, as followers of ARPN well know, requires drastically increased amounts of critical minerals, including the Rare Earths and mainstays such as copper, as well as, perhaps most notably, the so-called “battery criticals” lithium, cobalt, graphite, nickel and manganese — key  inputs for EV battery technology, which is at the heart of the green energy transition.

Randall writes that the U.S. has passed a “critical EV tipping point: 5% of new car sales powered only by batteries,”and argues that “[i]f the U.S follows the trend established by 18 countries that preceded it, a quarter of new car sales could be electric by the end of 2025.”

These emerging trend lines, along with the realization that supply chains for many metals and minerals leave us at the mercy of adversary nations like China who control much of the material supplies and processing capabilities, have prompted the Biden Administration and members of Congress to finally give the critical mineral supply chain conundrum ARPN and others have long warned of the attention it deserves.

Thus, in recent years, stakeholders began taking steps to strengthen domestic supply chains for critical minerals, with the supply chain chaos resulting from coronavirus pandemic and rising geopolitical tensions kicking these efforts into high gear in 2022.

Much of these efforts have focused on the rare earths and battery criticals, such as the March 2022 Presidential Determination to invoke the Defense Production Act for these materials, which grants the  federal government the authority to direct taxpayer funds to private companies for the extraction of said minerals.

However, untangling the supply chains is proving more difficult than some would have thought — and new sourcing requirements for the battery criticals contained in the energy provisions of the the recently passed Inflation Reduction Act may have added another layer of complications to an already challenging situation.

Earlier this summer, a RealClearInvestigations exposé discussed the alleged China connections of a domestic lithium extraction project in Nevada, where, as RealClear’s Steve Miller writes “a Chinese-dominated mining company has procured millions of dollars in American subsidies to extract lithium in the United States – but, given a dearth of U.S. processing capacity, the mineral is likely to be sent to China with no guarantee that the end product would return as batteries to power President Biden’s envisioned green economy.”   U.S. Senator Tom Cotton recently called for additional information from the Department of Energy regarding the alleged China connection of the project, which we  discussed here.

The Nevada project is is still in the permitting process, but similar scenarios have already unfolded elsewhere, such as in the case of rare earths magnets used in engine parts for F-35 fighter jets, where the U.S. Department of Defense has resorted to granting a waiver for sourcing requirements because at the current time acquisition of parts without Chinese components is not possible.  While the U.S.’s national security imperatives may make a rare earth waiver unavoidable, it should serve to turbo-charge domestic rare earth supply chain development to break the U.S. Armed Services’ Chinese rare earth dependency once and for all.

In the same vein, as Miller writes discussing the above-referenced project in Nevada, “critics say the scenario would increase U.S. energy dependence on a hostile power – one accused of using forced labor in the manufacture of both lithium batteries and solar panels – and undercuts the Biden administration’s emphasis on domestic sourcing of green energy,” experts have long warned that decoupling supply chains for lithium, for example represents a formidable challenge.

As Simon Moores, chief executive of Benchmark Mineral Intelligence argued in the wake of the passage of the Inflation Reduction Act, “[c]onsidering it takes seven years to build a mine and refining plant but only 24 months to build a battery plant, the best part of this decade is needed to establish an entirely new industry in the United States.”

Both assertions are accurate — yet, as we previously outlined:

“Senator Cotton’s point [regarding the Nevada project] that questions of foreign control deserve to be fully investigated before the U.S. Government confers funding seems unarguable. Government programs intended to alleviate worrisome foreign resource dependencies should not unwittingly strengthen those dependencies at the expense of the American taxpayer – and American national security.”

As clean energy adoption reaches a “tipping point,” this is all the more reason for stakeholders to place an even stronger emphasis on formulating and implementing a comprehensive “all-of-the-above” strategy for domestic critical mineral resource supply chain security — today.

The post As Clean Energy Adoption Reaches “Tipping Point,” the Challenge of Untangling Critical Mineral Supply Chains Looms Larger than Ever appeared first on American Resources Policy Network.

With skyrocketing demand, the mineral intensity of the green energy transition and supply chain challenges associated with our over-reliance on adversary nations, most notably China, has finally resonated with stakeholders. The passage of the Bipartisan Infrastructure Law in the summer of 2021 represented an important step towards decoupling U.S. critical mineral supply chains from adversary nations.  Others have since followed.

Today marks another key step: As part of the implementation of the 2021 infrastructure law, the U.S. Department of Energy announced the first round of funding under the Act for projects aimed at “supercharging”  U.S. manufacturing of batteries for electric vehicles and electric grid.

Awardees — a total of 20 companies — will receive a combined $2.8 billion “to build and expand commercial scale facilities in 12 states to extract and process lithium, graphite and other battery materials, manufacture components, and demonstrate new approaches, including manufacturing components from recycled materials.”

According to the Department of Energy announcement, recipients will match the federal funds to leverage a total of more than $9 billion “to boost American production of clean energy technology, create good-paying jobs, and support President Biden’s national goals for electric vehicles to make up half of all new vehicle sales by 2030 and to transition to a net-zero emissions economy by 2050.”

The supported projects span the entire value chain, with funding going towards:

• Developing enough battery-grade lithium to supply approximately 2 million EVs annually
• Developing enough battery-grade graphite to supply approximately 1.2 million EVs annually
• Producing enough battery-grade nickel to supply approximately 400,000 EVs annually
• Installing the first large-scale, commercial lithium electrolyte salt (LiPF6) production facility in the United States
• Developing an electrode binder facility capable of supplying 45% of the anticipated domestic demand for binders for EV batteries in 2030
• Creating the first commercial scale domestic silicon oxide production facilities to supply anode materials for an estimated 600,000 EV batteries annually
• Installing the first lithium iron phosphate cathode facility in the United States

The map provides a snapshot of anticipated project locations:

More details and individual project information can be accessed here.

According to DoE, the department “anticipates moving quickly on additional funding opportunities to continue to fill gaps in and strengthen the domestic battery supply chain,” and ARPN will continue to keep tabs on these efforts.

The post U.S. Department of Energy Announces Federal Grants to “Supercharge” U.S. EV Battery and Electric Grid Supply Chains appeared first on American Resources Policy Network.