-->
American Resources Policy Network
Promoting the development of American mineral resources.
  • Latest Tesla Deals with Chinese Suppliers Underscore Critical Mineral Supply Chain Challenges

    As pressures continue to mount, U.S. stakeholders are beginning to realize the urgency of building supply chains “that are safer, more secure and not beholden to a country that has multiple human rights violations, predatory lending practices, and vast national security complications.”  For now, however, too often, automakers still have to turn to Chinese suppliers to meet their material needs.

    Underscoring the extent of China’s chokehold on critical mineral supply chains, especially for the “battery criticals” lithium, cobalt, nickel, graphite, and manganese, Tesla Inc. signed two new long-term contracts with two of its existing Chinese battery materials suppliers, according to Bloomberg.

    The company signed pricing agreements with Zheijang Huayou Co. and CNGR Advanced Material Co. for supplies, specifically ternary precursors used for energy storage, until the mid-2020s.

    As followers of ARPN know, China dominates not only the resource development segment of the EV battery supply chain, but also the processing segment for the battery criticals.  As Manhattan Institute senior Fellow Mark Mills told the Daily Caller News Foundation: “If you want to build EVs, one needs access to the entire suite of specialty chemicals, and the vast majority of those are produced in China – the issue is not the mining per se, but the refining wherein China utterly dominates most relevant chemicals. Or else one could wait 5 to 10 years – if you’re lucky – for non-Chinese refineries to be built.”

    Amidst the global push towards net zero carbon emissions, demand for EVs will continue to soar, in the U.S. fueled in part by the adoption of an ambitious climate agenda by the Biden Administration, further driving up demand for critical minerals.

    The question becomes whether the net zero transition deepens dependency on Chinese and foreign-sourced Critical Minerals – or galvanizes a push to provide new sources of supply in the U.S..

    Thankfully, positive policy developments that could help reduce our over-reliance on China are underway.

    U.S. President Joe Biden in March of this year invoked the Defense Production Act to encourage domestic production of the metals and minerals deemed critical for electric vehicle and large capacity batteries, including nickel, and the Administration has acknowledged 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 development followed the adoption of a broader “all-of-the-above” approach to supply chain security on the part of the Biden Administration in 2021, and may be strengthened with the adoption of provisions contained in the Inflation Reduction Act just passed by the U.S. Senate.

    The package would require that by 2024, 40% of the minerals used in EV batteries would have to be extracted, processed or recycled in the U.S. or by a free trade partner — a requirement that increases to 80% by 2027 – and 100% for battery components by 2029. According to John Adams, U.S. Army brigadier general (ret.), the sourcing requirements for the battery criticals could be key to addressing “emerging energy security vulnerabilities before they are intractable crises.” 

    On the supply side, the mining industry is ready to meet this challenge and has increasingly been harnessing advances in materials science and technology to help develop domestic critical minerals supplies while maintaining and advancing responsible mining practices.   A case in point we recently highlighted was  Tesla’s  deal with Talon Metals Corp, developing a new nickel project in Minnesota, which Elon Musk singled out“due to plans to make the electric vehicle battery metal in a way it considers more environmentally friendly.”

    As we outlined, 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 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.

    These are positive developments, but more must be done. Until then, there will be more announcements of automakers signing deals with Chinese companies — certainly not an ideal scenario at a time when tensions between the U.S. and China are mounting over Taiwan.

    Share
  • A Look Beyond the United States — Realizing the Extent of Resource Dependencies, Countries Take Steps to Bolster Domestic Supply Chains

    Against the backdrop of mounting geopolitical and ongoing supply chain challenges, countries are left grappling with the the mineral intensity of the sought-after global transition towards a net zero carbon emissions future.

    In their quest to untangle complex critical mineral supply chains and reduce over-reliance on adversary nations, the extent of which was first brought to light in the coronavirus pandemic, nations are not only forming partnerships like the recently-announced Minerals Security Partnership (MSP), which Reuters’s Andy Home likens to the formation of a metallic NATO, they are also taking their own steps to secure supply chains for domestic manufacturers.

    In the following, we’re taking a look at resource related activities in countries beyond ARPN’s usual purview (which of course is focused on the United States but sometimes includes our close allies Canada and Australia):

    • Earlier in July, the United Kingdom released its first ever Critical Minerals Strategy, setting out, in the words of Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng, the UK’s “plan to secure our supply chains, by boosting domestic capability in a way that generates new jobs and wealth, attracting investment and playing a leading role in solving global challenges with our international partners.”

      The announcement comes only days after the launch of a Critical Minerals Intelligence Centre (CMIC), which seeks to “boost the country’s resilience and growth by providing up-to-date data and analysis on the supply of critical minerals,” and “develop evidence-based policies aimed at developing more robust critical mineral supply chains to the UK.”

    • Germany, too, is taking steps to decouple from adversaries and bolster its domestic supply chains emphasizing domestic production, processing and recycling over imports.  Upon taking office, the new Federal Government  set itself the ambitious goal of presenting a comprehensive National Security Strategy within its first year. The process was kicked off in March of 2022, a few weeks after the Russian invasion of Ukraine, which served as an eye opener for Germans and Europeans in terms of their dependence on Russian energy supplies, particularly oil and gas. Consequently, Foreign Minister Annalena Baerbock has made clear that Germany must ensure that it cannot again fall victim to blackmail as it did over its dependence on Russian energy, and is looking for ways to reduce the country’s economic dependence on China, which is particularly high when it comes to supplies of Rare Earths.

      In the same vein, the German Federal Institute for Geosciences and Natural Resources (BGR), in partnership with the German Resource Research Institute (GERRI) has released a research paper calling for a “rethink” for German resource policy. Outlining that German resource policy rests on three pillars — imports, domestic development and processing, and recycling — the authors of the report call for strengthening the second and third pillar over the first one going forward.

    • But it’s not just Western nations feeling the heat — South Korea, too, is starting to feel vulnerable over critical minerals.  The Korean National Assembly Research Service has said that “securing metal resources will be a key to energy security, and stressed the importance of plans to stockpile metal resources and diversify suppliers.”

      A founding member of the Mineral Security Partnership (MSP) led by the United States, South Korea is planning to “draw up related measures such as measures to stockpile more mineral resources,” after having neglected its resource policy over the past decade, according to researchers.

    These are only a few examples of mineral resource policy developments beyond ARPN’s usual purview, but they all make one thing abundantly clear:  With geopolitical tensions rising, countries are realizing that critical mineral resource supply chains are vulnerable to manipulation or weaponization, and are taking steps to shore up their domestic development and processing capabilities.  All-of-the-Above increasingly appears to be the order of the day.  Friend-shoring is an important pillar of any resource strategy, but must be embedded into a comprehensive approach from mine to manufacturing and across all segments of the value chain.

    Share
  • It’s Not Just Critical Mineral Development and Processing — China Also Has Leg Up When it Comes to Recycling

    Followers of ARPN are well aware that China has long dominated the global mineral resource wars on the development and processing fronts, and the United States in recent months has taken a series of unprecedented steps in an effort to decouple U.S. critical mineral supply chains from China. A recent paper published by the American [...]
  • Critical Minerals Go Mainstream: ABC News Clip on Critical Minerals in the Climate Fight

    For years, ARPN and others in the mineral resource policy realm have lamented a lack of public focus on the importance of securing critical mineral supply chains.  Fast forward to a global pandemic prompting lockdowns, resulting supply chain shocks, Russia’s war on Ukraine and rising resource nationalism in the Southern Hemisphere, and the issue has gone [...]
  • The Newest Frontier in the Global Resource Wars: Virtual Weaponized NIMBYism

    Geopolitical tensions, Russia’s war on Ukraine, rising resource nationalism in the Southern hemisphere – against the backdrop of ever-increasing stakes it appears that a new theater in the global resource wars has opened up: Cyber warfare, and more specifically, according to Defense One, “weaponized NIMBYism.” The U.S. Department of Defense has announced that it is investigating a recently-unearthed disinformation [...]
  • Independence Day 2022 – Are We Getting Closer to Critical Mineral Resource Independence? — As Stakes Rise, National Defense Stockpile Could Receive Boost Via NDAA

    It’s that time of the year again.   We’re gearing up to celebrate the men and women who have fought for, and continue to safeguard our freedoms.  It may not feel like it when the cost for the average July 4th cookout has drastically increased, but we have much to be thankful for, particularly at a time when geopolitical [...]
  • New Law Underscores Real-Life Challenges of Untangling Complex Supply Chains

    As U.S. policy makers and other stakeholders scramble to secure supply chains to meet rising demand for battery criticals against the backdrop of a pandemic, geopolitical tensions and war, as well as rising resource nationalism in the Southern hemisphere, a newly enacted law threatens to make President Biden’s already ambitious push to require that 50 percent of [...]
  • Geopolitics and Resource Realignment – China’s Alumina Exports on the Rise as Russia Seeks to Plug Shortfall

    On the heels of the coronavirus pandemic having exposed the West’s overreliance on Chinese supplies of mineral resource supplies, Russia’s war on Ukraine has 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, [...]
  • Beyond the Rare Earths and Battery Criticals – U.S. Armed Services Committee Seeks to Address Supply Chain Challenges for Antimony

    Underscoring the growing awareness that our nation’s overreliance on foreign supplies of critical minerals underpinning 21st century technology stretches beyond the much-discussed Rare Earths and battery criticals lithium, cobalt, nickel, graphite, and manganese, the U.S. House Committee on Armed Services has released draft legislation to address China’s stranglehold on the supply chain for antimony. Used [...]
  • Let’s Onshore Semiconductor Fabrication – But Not Without Strengthening Supply Chains at the Source… After All, “Supply Chain” begins with “Supply”

    Your mind may not immediately jump to semiconductors when you think about national security, but “a steady source of uninterrupted, trusted chips is necessary for the security of the nation – supporting the readiness of the U.S. military and protecting critical infrastructure like the electric grid,” writes Zachary A. Collier, Ph.D., an assistant professor of management at Radford University and a visiting scholar [...]

Archives