supply chain

In a recent op-ed, National Mining Association president and CEO Rich Nolan argues that while the United States still has a shot at winning the EV revolution, it is currently not only not in the lead, but is rather “being lapped.”

In the lead – not surprisingly to any of ARPN’s followers — is China, which jockeyed for pole position in the EV race a long time ago and has since attained a startling level of “control of the EV supply chain, particularly the production and processing of minerals that make lithium-ion batteries possible.”

The Biden Administration’s ambitious goals to electrify the U.S. vehicle fleet are well known – and consistent with recent global pledges to reduce vehicle CO2 emissions.   However, as Nolan points out, there is an “alarming disconnect between the mineral demand that U.S. energy policy is driving and the policies needed to meet it,” adding that “fully electrifying the U.S. car fleet would require increases of 127 percent, 245 percent, and 114 percent of total respective global nickel, lithium, and cobalt production from 2019.”

Failing to establish a comprehensive and robust domestic supply chain for the materials underpinning the sought-after shift to net carbon zero, writes Nolan, risks three troubling developments:

1. The U.S. might trade “the geopolitics of the oil barrel — and reliance on OPEC — for the geopolitics of the battery and a supply chain controlled by China.” With import dependence for metals and minerals already at “alarming levels(…) [a]llowing China to potentially weaponize our mineral insecurity is a mistake we must avoid.”
2.  U.S. and global climate efforts could be derailed: “Battery material shortfalls by 2030 could mean sharply rising battery prices and curtailed EV deployment that makes the impact of today’s semiconductor shortage and its effect on the auto market seem tame. By 2030, as many as 35 million EVs that otherwise would be on the world’s roads won’t exist due to a lack of the materials needed to produce them.”
3. Not all nations would be equally hit by this production shortfall “[b]ecause China holds such a dominant position in the supply chain.” As such, “Chinese automakers will gain access to materials that U.S. manufacturers won’t. The competitiveness of the U.S. auto industry and the millions of jobs it supports hang in the balance.”

The challenge is clear, and awareness of the issue has been growing.  However, charting a path to success is complicated by a persisting “Not-in-my-Backyard (NIMBY)” sentiment and the notion that we can recycle, substitute, and “friend-shore” our way out of the problem, as we pointed out in a recent post.

Ultimately, the only viable solution is a comprehensive “all-of-the-above” approach that acknowledges that the above-referenced approaches are all parts of the solution — but they must be complemented by support for a strong and sustainable domestic mining and processing infrastructure.  The sooner stakeholders come to terms with this reality, the more likely we are to succeed.

As Nolan concludes:

“The U.S. can win the EV revolution, produce the emissions-free vehicles essential to climate action, and ensure the auto jobs of tomorrow are American jobs, but we must make mining policy the foundation of this effort. There’s not a moment to lose.”

 

This week we continue our coverage of the just-released draft revised Critical Minerals List, for which the US Geological Survey (USGS) began soliciting public comment last week — this time via Andy Home’s latest.  In a new column for Reuters, Home zeroes in on the “only two new additions” to the draft list. (As ARPN outlined last week, the bulk of the expansion of the list from 35 to 50 minerals and metals is owed to the fact that the Rare Earths and Platinum Group Metals will now be listed individually).

Arguing that the additions of Nickel and Zinc “reflect… an evolution of the methodology used to determine whether a mineral is critical to the well-being of the U.S. economy,” Home provides a window into the drafters’ reasoning for including them.

For Nickel, he writes that while a “relatively benign supply profile kept nickel off” in the past, there are two reasons for including it on the updated List.

Pointing to the only domestic operating Nickel mine in the U.S. and a single producer of Nickel sulphate (which only produces Nickel as a co-product), Home says “the USGS has expanded its criticality criteria to look beyond trade dependency to domestic supply, particularly what it calls ‘single points of failure.’”

The second reason, according to Home, is “nickel’s changing usage profile from alloy in stainless steel production to chemical component in electric vehicle batteries.”  The rapid uptake of EVs as a key to the net-zero carbon transition has propelled Nickel onto the Critical List.

While for Zinc, the U.S. domestic supply chain is “less fragile,” according to Home, “the country’s refined zinc import dependency is relatively high,” and “[g]lobal supply trends make this problematic.”

Homes closes by noting that neither of “…these industrial metals feature on the European Union’s critical minerals list. In part that’s a reflection of Europe’s domestic production base both at the mining and smelting level.  But in part it may be because the USGS is ahead of its European peers in analysing global supply patterns and the resulting potential threats to critical minerals availability.

Nickel and zinc may not spring to mind when most people think of critical minerals, but as far as the United States is concerned, they both are.”

In the wake of several eye-openers regarding our nation’s critical mineral supply chain woes — the coronavirus pandemic, increasing trade tensions with adversary nations like China, and reports underscoring the mineral intensity of our green energy future — the bipartisan infrastructure package passed by the U.S. Senate before the August recess contained a series of [...]

As we outlined in our last post, the Biden Administration’s strategy to secure critical mineral supply chains, as outlined in its just-released 100 Day Supply Chain Report, embraces an “all of the above approach.” While strengthening sustainable mining and processing domestically, the Administration will also rely on partnerships with our closest allies — and of [...]

Last week, the Biden Administration released the findings of its 100-day supply chain review initiated by Executive Order 14017 – “America’s Supply Chains.” From a Critical Minerals perspective, there is a lot to unpack in the 250-page report, and we’ll be digging into the various chapters and issues over the next few days and weeks. [...]

In a recent piece for RealClearDefense Jeffery A. Green, president and founder of J.A. Green & Company, and member of the ARPN panel of experts, outlines a set of four main lines of efforts policy makers should focus on as they develop policy recommendations based on a recent executive order and House task force set [...]

In a new piece for Forbes, Jude Clemente, principal at JTC Energy Research Associates, LLC, outlines the size and scope of the ambitious climate goal of electrification to fight climate change, and discusses the underlying challenges associated with the shift. Clemente argues that the likely surge in electricity demand as the world seeks to decarbonize [...]

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 [...]

According to NASA, the Hubble Telescope earlier this month collected imagery of an asteroid “so rich in metals that its worth puts our global economy to shame.” Already discovered in 1852, the celestial body is located in the Solar System’s main asteroid belt, roughly 370 million km from Earth. The object, which has been called [...]

Beijing’s threat to withhold potentially life-saving medical supplies and medications in the middle of a global pandemic, during which China has “taken control of [respective] supply chains around the world as part of its quest for global domination,” were a wake up call, write U.S. Sen. Ted Cruz (R-TX) and Gov. Mike Dunleavy (R-AK) in [...]