American Resources Policy Network
Promoting the development of American mineral resources.
  • Would Incentivizing U.S. Nickel Imports From Indonesia be a Backdoor for U.S. Tax Subsidies for Chinese Nickel Companies?

    Trade policy in an integrated global economy can take some unexpected twists and turns.  Today’s post highlights returns to one development under discussion that could lead to a result diametrically opposed to the original intent, in this case, of the U.S. Congress and Biden Administration.

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

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

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

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

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

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

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

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

  • More Mines Needed to Provide Enough Copper, the “Metal of Electrification,” for Green Energy Shift

    Gathering for the Financial Times’s Mining Summit both in person and online last week, chief executives of global copper mining companies sounded the alarm on the insufficient number of copper mines currently under development to supply the surging material needs of the ever-accelerating green energy transition.

    Copper prices may have dropped, however demand for the metal, which is not only a key mainstay metal, but also an indispensable component in green energy technology, is expected to increase drastically to keep pace with the material requirements of the global push towards net zero carbon emissions.

    According to the Financial Times, its growing application in this field will result “in it being dubbed the ‘metal of electrification’, with forecasts that it will double to a 50mn tonne market by 2035 compared with 2021 levels, according to S&P Global, which predicts a ‘chronic gap’ between supply and demand.”

    While U.S. import reliance for copper hovered around 30 to 35 percent in the 2010s, that number has gone up to more than 40 percent in the 2020s, according to the USGS Mineral Commodity Summaries. 

    Miners are pointing out that a confluence of complex permitting timelines, rising inflation and the fact that the commodity is “harder to find in high quantities in the ground” may have led to a situation “where it’s likely there won’t be enough copper to meet decarbonization goals in the next few decades.”

    As the Wall Street Journal outlined earlier this month, these circumstances have prompted mining companies to target “a new but also old source – closed mines, also known as brownfield sites.” The Wall Street Journal points to Sweden-based miner Bluelake Mineral, seeking to reopen a mine site in northern Norway that closed 25 years ago, as well as to Rio Tinto’s Resolution Copper project near Superior, Arizona, which is considered one of the most significant undeveloped copper deposits in the world and would reuse the historic Magma Mine which started production in 1910 and operated until 1996. While the project has strong support from the surrounding community, and began the permitting process in 1997, it is still awaiting permits to begin operation.

    With Copper becoming increasingly critical in the context of decarbonization efforts – the material has not (yet) been added to the overall U.S. government’s critical minerals list, the Department of Energy recently designated the material a critical material as part of its 2023 Critical Materials Assessment – and with geopolitical volatility reaching heights not seen in decades with this month’s Hamas assault on Israel, securing key mineral supply chains becomes all the more pertinent, and U.S. stakeholders should look to embrace domestic opportunities to unleash our mineral potential where possible.

  • The Most Critical Non-Critical? A Look at Copper

    In a new piece for Metal Tech News, Shane Lasley zeroes in on the U.S. government’s failure – at least to date – to afford critical mineral status to copper, which is not only a key mainstay metal but an indispensable component in clean energy technology, and supply scenarios in the face of surging demand as the [...]
  • DoD Once More Invokes Defense Production Act Title III Authority for Projects to Strengthen Domestic Critical Mineral Supply Chains for Lithium, Nickel

    Against the backdrop of surging demand for critical minerals and increasing geopolitical tensions, the U.S. Department of Defense (DoD) is forging ahead with its efforts to strengthen the U.S. defense industrial base. The Department is stepping up its efforts to award funding for projects to encourage domestic development of the Battery Criticals (lithium, graphite, cobalt, [...]
  • Defense Production Act Key Vehicle to Reduce Supply Chain Vulnerabilities for Critical Minerals

    The global push towards net zero carbon emissions against the backdrop of rising geopolitical tensions and associated supply chain challenges has undoubtedly directed stakeholder attention to the need to reduce vulnerabilities associated with an over-reliance on metals and minerals from adversary nations, especially China. Of course, the challenges of detangling supply chains and decoupling from [...]
  • Washington Post Editorial Board Calls for All-Of-The-Above Approach to Mineral Resource Security

    In another indication that awareness of the acuteness of our nation’s critical mineral woes has gone mainstream in recent months, the Washington Post’s editorial board weighed in with some thoughts on how to curb the risks associated with U.S. over-reliance on Chinese minerals. In a new opinion piece published last week, editors argue that while the environmental [...]
  • WSJ News Explainer: Looming Copper Shortage Threatens Green Tech Transition

    While lithium remains the poster child of the green energy transition, stakeholders and media have started to pay closer attention to the other four “battery criticals” graphite, cobalt, nickel and manganese (for more ARPN coverage click on the respective metal) — and rightfully so. However, one of the key components of 21st century renewable energy technology, copper, often continues to fly under the radar [...]
  • Wonder Material Graphene — New Sourcing Partnership Could Further Goal of Decoupling From China

    Graphene has long been heralded as a wonder material – almost from the time Andre Geim and Konstantin Novoselov used scotch tape to peel individual layers of the material off a chunk of graphite in 2004.  What sounds like a 6th Grade science fair experiment won the physicists the Nobel Prize in 2010. In the dozen [...]
  • Securing the Supply Chain for Graphite — the “Unsung Player” in Battery Supply Chain –“Herculean Task,” But One That Must Be Prioritized In Push Toward Net Zero Carbon

    Even before the Biden Administration announced the “most aggressive” plan to curb tailpipe emissions to date with new vehicle pollution standards proposed by the Environmental Protection Agency (EPA) last month, automotive OEMs and Tier 1 suppliers were facing difficulties getting both the parts and raw materials needed for their electric vehicle (EV) components. The newly proposed rules [...]
  • As Biden Administration Doubles Down on EV Adoption Push, U.S. Must Double Down on Comprehensive “All-of-the-Above” Critical Minerals Strategy

    The Biden Administration has announced the “most aggressive” plan to curb tailpipe emissions to date, with new vehicle pollution standards proposed by the Environmental Protection Agency (EPA) and announced by the White House last week. If finalized, the proposed rules would require automakers to reduce carbon emissions by 56% in their 2032 models compared to 2026 models.  The expectation is [...]