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As the global push for net carbon zero accelerates in the wake of last year’s UN Global Climate Summit in Glasgow, another leading automaker draws attention to the critical raw materials challenge:

In a recent interview with German paper Die Zeit, Mercedes-Benz Group (previously Daimler AG) Chief Executive Ola Kaellenius warned that EV battery raw material scarcity could throw a serious wrench into the shift towards greater EV adoption, stating that “[t]he industrialization of mines and refinery capacities may not progress as quickly as demand increases.”

The luxury automaker plans to invest more than $47 billion on the development of electric vehicles over the next few years aiming to be ready for an all-electric vehicle market by 2030.

While Kaellenius added that “[s]hould that happen, it would only delay e-mobility, but not prevent it,” the statement should give pause to policy makers and stakeholders.  Delay due to raw material shortages could determine which companies and countries thrive in the net zero era, and which struggle to keep pace.

Kaellenius’s statement comes against the backdrop of ever-surging demand for electric vehicles, anecdotally evidenced by recent announcements by Ford that it had to to halt reservations for its forthcoming F-150 Lightning truck after hitting 200,000 pre-orders.

As Ultima Media auto analyst Daniel Harrison recently stated, “[t]here is a serious question as to whether supply can keep up with demand across the battery supply chain.”

Our friends at Benchmark Mineral Intelligence have called the issue “’the great raw material disconnect’ – high investments in cell factories, but missing investments in raw material extraction.” 

Followers of ARPN are aware of the mineral intensity of the electric vehicle revolution, and while the supply chain challenge has started to resonate with stakeholders in the U.S., a disconnect remains between acknowledging the issue and committing to a comprehensive “all-of-the-above” approach across the entire value chain, ranging from mining to processing and manufacturing.

As we previously outlined:

“For all of the verbal affirmations of an “all-of-the-above” approach to mineral resource policy on the part of the Biden Administration, the overall plan thus far appears more geared towards “rely[ing] on ally countries to supply the bulk of the metals needed to build electric vehicles and focus[ing] on processing them domestically into battery parts, [as] part of a strategy designed to placate environmentalists.”

The latest manifestation of this challenge became apparent at a November 2021 congressional hearing, during which U.S. Representative Scott Peters (D-Calif.) suggested that rather than onshoring minerals production, the U.S. should try ‘friend-shoring,’ adding that ‘it seems like we should be working with our allies to develop new mines and factories for clean energy technologies in more favorable locations.’

While the ‘friend-shoring’ concept is an important pillar of the ‘all-of-the-above’ concept and highly appealing especially to those policy makers with ‘not in my backyard (NIMBY)’ constituencies, it is insufficient to alleviate our overall problem.”

The challenge becomes even greater, when we realize that “NIMBYism Is Global” – as was the headline for a recent piece by Forbes senior contributor David Blackmon zeroing in on what he called the “grand ironies in the whole energy transition narrative: The same class of left-leaning activists who promote wind and solar and electric vehicles (EVs) as the solution also oppose the mining of the lithium and other critical minerals necessary to make them work.”

A clear example of this is the Serbian government cancelling Rio Tinto’s $2.4 billion lithium mining project in January over sustained NIMBY protests.

Meanwhile, as a Visual Capitalist graphic made perfectly clear – China is not waiting for the rest of the world to catch up and has not just jockeyed for pole position when it comes to mining critical minerals but has also cemented its lead in the processing segment.

While it may be true that the EV revolution may be inevitable, as Mercedes-Benz’s CEO maintains, lofty goals of net carbon neutrality will not be achievable if we don’t embrace a push to secure critical mineral supply chains from “soup to nuts” to borrow a term used by Energy Secretary Jennifer Granholm.

After all, as we’ve noted often at ARPN, the first word in supply chain is… supply.

Amidst the global push towards carbon neutrality, “Critical Minerals” has become a buzzword.  As the green energy transition has gone mainstream and electric vehicles and renewable energy sources dominate the news cycle, so has talk about growing demand for some of the specialized materials underpinning this shift — most notably the Rare Earths, and the battery tech metals Lithium, Cobalt, Graphite and Nickel.   A little lost in the media shuffle, though no less important, is Copper — perhaps the unsung hero of the green energy transition.

Less flashy and headline-grabbing than some of its tech metal peers, this mainstay mineral deserves far more credit and attention than it is currently getting.  Followers of ARPN will know that we have long touted the versatility, stemming from its traditional uses, new applications and Gateway Metal status.

Copper is also an irreplaceable component for advanced energy technology, ranging from EVs over wind turbines and solar panels to the electric grid.   The manufacturing process for EVs requires four times more Copper than gas powered vehicles, and the expansion of electricity networks will lead to more than doubled Copper demand for grid lines, according to the IEA.

A recent graphic by Visual Capitalist depicts the Copper intensity of the energy transition with a view towards solar and onshore and offshore wind energy technology:

Add in Copper’s Gateway Metal status — the processing of the metal yields access to a host of co-products essential to “manufacturing the advanced technologies that will power our economy for generations to come”  such as Cobalt, Tellurium, Molybdenum, Rhenium, Arsenic and REEs  — and a 2019 mining executive’s projection that “[t]he world will need the same amount of copper over the next 25 years that it has produced in the past 500 years if it is to meet global demand.

Recent developments in Washington, D.C. — movement on a bipartisan infrastructure package and announcements of new EV goals and fuel efficiency standards — will only add to the outlined Copper demand scenarios.

And the challenge is not just mining, but also processing, as Laura Skaer, a member of the board of directors of the Women’s Mining Coalition and former director of the American Exploration & Mining Association, outlined in a recent piece for Morning Consult:

“Last year, the United States imported 37 percent of the copper we used. China already refines 50 percent of the world’s copper and the United States only refines about 3 percent. National security experts have warned that relying on China for critical supply-chain materials like refined copper poses a serious threat to America’s national security interests.”

The United States Government failed in 2018 to include Copper in its official Critical Minerals list, a faux pas the Canadian government did not commit with the release of its own Critical Minerals list earlier this year, which included Copper along with fellow key Gateway Metals Nickel and Zinc in its list of 31.

Meanwhile, the Biden Administration’s 100-Day Supply Chain Review highlights Copper as an integral component of Lithium-ion battery technology, in the context of being what we have called a “gateway metal” to other critical materials, and for its “use across many end-use applications aside from lithium-ion cells, including building construction, electrical and electronic products, transportation equipment, consumer and general products, and industrial machinery and equipment.” 

Here’s hoping that the greater prominence given to Copper — both as a standalone material and Gateway Metal — by the White House 100-day report is an indication that a forthcoming updated U.S. Critical Minerals List will acknowledge the metal’s ever-growing importance.  Until then, Copper will remain one of the most “Critical Non-Criticals,” as we note in ARPN’s recent report, Critical Mass.

While specialty and tech metals like the Rare Earths and Lithium continue to dominate the news cycles, there is a mainstay metal that has – for good reason – been making headlines as well: Aluminum.  Bloomberg recently even argued that “Aluminum Is the Market to Watch Closely in 2019.”  Included in the 2018 list of 35 [...]

In 2007, a new mineral found in Serbia made headlines around the world. “Kryptonite Discovered in Mine” – wrote the BBC about the discovery of a material the chemical formula of which – sodium lithium boron silicate hydroxide – happened to match the one of the famed kryptonite stolen by Lex Luthor from a museum in the [...]

The BBC has dubbed Rhenium — another metal included in the Department of the Interior’s Final List of 35 Minerals Deemed Critical to U.S. National Security and the Economy — a “super element” with standout properties that can be likened to “alien technology.” Thus, it comes as no surprise that Shane Lasley, writing for North of 60 Mining [...]

With the long-awaited Defense Industrial Base report finally released, analysts have begun pouring over the 146-pages-long document. One of the first issue experts to offer commentary in a national publication was Jeff Green, president of Washington, D.C.-based government relations firm J.A. Green & Company, and member of the ARPN panel of experts. Writing for Defense [...]

A good year ago, a presidential Executive Order (E.O. 13806) mandated the completion of a study to assess the “Manufacturing Capacity, Defense Industrial Base, and Supply Chain Resiliency of the United States.” According to a well-informed administration source, this defense industrial base study is now nearing completion, reports Breaking Defense. However, as Sydney J. Friedberg [...]

Pop quiz: Which metal has “the highest melting point of all the elements on the periodic table, (…) is a vital ingredient to a wide-range of industrial and military applications,” has made the Department of Interior’s final list of 35 metals deemed critical to U.S. national security, “yet none of this durable metal is currently [...]

Escalating trade tensions have brought the issue of China’s near-total supply monopoly for Rare Earth Elements back to the front pages of American newspapers. If that isn’t reason enough for policy makers to use the momentum that has been building for the formulation of a comprehensive critical mineral strategy and an overhaul of policies standing [...]

In recent weeks, we have seen a flurry of articles and commentaries in national publications discussing reforms to address our ever-growing reliance on foreign mineral resources.  The two most recent examples are member of the ARPN expert panel Jeffery A. Green’s piece in Real Clear Defense entitled “Dangerous Dependence on China for Critical Minerals Runs [...]