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.

The post Critical Minerals Challenge Could Delay E-Mobility, Automaker Says appeared first on American Resources Policy Network.

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.

The post The Mineral Intensity of a Carbon-Neutral Future – A Look at Copper appeared first on American Resources Policy Network.

Bloomberg recently even argued that “Aluminum Is the Market to Watch Closely in 2019.” 

Included in the 2018 list of 35 minerals deemed critical to the United States national security and economy, aluminum is the No. 1 material by annual DoD usage, and “a shortage of aluminum metal was cited in a nonclassified defense study as having ‘already caused some kind of significant weapon system production delay for DoD.’” 

The U.S. is home to significant bauxite deposits, from which aluminum is sourced, but we import a significant percentage of the aluminum consumed domestically.  Unlike with other metals and minerals, however, this represents a marked decrease in geopolitical risk, as most of our aluminum imports are sourced from one of our closest trading partners, Canada, which accounted for 56% of total aluminum imports from 2013-2016.

While viewed in isolation and from the upstream end of the supply chain at the minesite, the U.S. is increasingly import-dependent for the aluminum it needs, but viewed in the context of an integrated North American supply chain between the United States and Canada, our neighbor to the North is helping the U.S. close a significant domestic production shortfall.

Thus, many were startled by the Administration’s decision earlier last year to impose trade tariffs on Canadian-made aluminum and steel under Section 232 of the 1962 Trade Expansion Act.

Followers of ARPN may recall that the USMCA, the new U.S.-Mexico-Canada trade deal to replace NAFTA struck in November 2018, had opened a window to drop these tariffs on steel and aluminum imports from Canada and Mexico, which stand in the way of a fully integrated North American defense supply chain and, particularly with regards to Canada, “ignore nearly 80 years of deep defense cooperation with our northern neighbor.”

Unfortunately, the provision remained intact in the November agreement, prompting more than 45 groups representing a wide range of business sectors to renew their call for an end on the Section 232 tariffs in 2019.  In a coalition letter sent to U.S. Secretary of Commerce Wilbur Ross and U.S. Trade Representative Robert Lighthizer last week, the signatories argue that

“for many farmers, ranchers and manufacturers, the damage from the reciprocal trade actions in the steel dispute far outweighs any benefit that may accrue to them from the USMCA. The continued application of metal tariffs means ongoing economic hardship for U.S. companies that depend on imported steel and aluminum, but that are not exempted from these tariffs. Producers of agricultural and manufactured products that are highly dependent on the Canadian and Mexican markets are also suffering serious financial losses.”  

Meanwhile, on Capitol Hill, a bipartisan group of lawmakers are preparing draft legislation to strip the Administration of the tool it used to impose the above-referenced tariffs, which it is considering to use to implement further duties on car and car part imports.  

According to Politico, the Bicameral Congressional Trade Authority Act, the draft bill’s working title, would strip the president of the unilateral power to “make a final determination on whether to levy import restrictions if a Commerce Department analysis determines that foreign imports are undermining U.S. economic interests in a way that poses a threat to national security,” by requiring congressional approval of any such tariffs proposed under Section 232.  If passed, the legislation would also require a retroactive vote to approve any tariffs imposed under Section 232 within the last four years — including the ones on aluminum and steel the USMCA negotiators failed to strike. 

With the tariffs removed, the November USMCA agreement could well become a “springboard to take the strategic North American alliance to a new level.”  

Here’s hoping Washington will not fail America.  

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Dr. Chris Stanley, a mineralogist at London’s Natural History Museum, whose help researchers enlisted when they found themselves unable to match their discovery with anything scientifically-known, told the BBC he was “shocked to discover this formula was already referenced in the literature – albeit literary fiction,” and said:

“The new mineral does not contain fluorine (which it does in the film) and is white rather than green but, in all other respects, the chemistry matches that for the rock containing kryptonite.”

As Jadarite has nothing to do with the real element Krypton, an colorless, odorless, tasteless noble gas often used in fluorescent lamps, the mineral could not be called “kryptonite.” Instead, Jadarite, which contains Boron and Lithium, both of which are known to followers of ARPN for a number of applications, received its official name thanks to the geographic location of its discovery, the  Jadar Valley.

The reason why most people will not have heard of the mineral is that Serbia is the only place in the world where Jadarite has been found – and to date, it has not been commercially developed.

Courtesy of the ongoing materials science revolution, which yields research breakthroughs on a daily basis, this may soon change, however. As Mining Review Africa reports, researchers at Rio Tinto’s Technical Development Centre in Bundoora outside of Melbourne, Australia, are working to develop a new chemical procedure to process the material.  A pilot processing plant has been housed within a large shipping container, to allow it to be deployed to the mine site in Serbia.

Against the backdrop of the current EV battery technology fueling demand for Lithium, these efforts, if successful, could help alleviate mineral supply concerns in the long run.

While recent stories about an oversupply have caused Lithium prices to slide, analysts believe that the fundamentals for Lithium are strong and long-term demand will shore up again. As Benchmark Mineral Intelligence’s Andrew Miller recently told Reuters:

“The demand for lithium isn’t really in question, it’s just a matter of when that demand really kicks in. (…) You just have to look at the number of battery factories that are being built around lithium-ion technology.” 

As for Borates, while arguably considered the less “sexy” component in the Jadarite mix, fundamentals may be changing here, too.  As Chris Cann recently noted for Mining Journal, while the borates space has “historically, closely tracked global GDP numbers as the ability of the world’s population to buy more household products has driven the use of boric acid, (…), Borates are now linked to two areas of potentially strong growth.” 

The two areas he references are the traditional application in agriculture/household, as well as the lesser-known use of Borates in electronics, “where Boron-laden permanent magnets are widely consumed, including as the most commonly used magnets for hybrid and electric vehicles.” 

The bottom line is this – with advances in materials science disrupting and fundamentally altering the supply and demand picture for metals and minerals on a regular basis, the time to devise a comprehensive mineral resource strategy that accounts for these fast-paced changes has come.  Our nation’s competitiveness and national security depends on it.

The post Jadarite and the Materials Science Revolution – “Kryptonite” to Alleviate Mineral Supply Concerns? appeared first on American Resources Policy Network.

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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 News, Green argues that the report – which outlines nearly 300 supply chain vulnerabilities and sounds the alarm on China represents a significant and growing risk to the supply of materials deemed strategic and critical to U.S. national security – provides “a significant step forward for the U.S. military.”

His rationale for this assessment is that the report “goes further than the Department of Defense has traditionally wanted to venture.”

Says Green:

“The report clearly identifies five macro factors that have weakened the defense industrial base, including the ‘Industrial Policies of Competitor Nations.’ Though U.S. manufacturing has declined for a variety of reasons, the report notes that China, in particular, has used illegal means to dominate critical global markets. These means include espionage, evasion of export controls, market access restrictions, subsidies, and dumping, among others.”

He adds:

“Fortunately, the report goes beyond problem identification to provide a Blueprint for Action. Though many of these are locked away in a classified annex to the report, the White House has provided some clues as to how it wishes to proceed.”

Green offers some commentary on some of the report’s suggested fixes, which, among others, include the creation of a “national industrial policy to support national security efforts,” an area in which he says the “Department of Defense has been deficient for decades.” Other suggestions include the encouraged “use of direct funding to target and support critical sectors of the supply chain,” as well as educational efforts and outreach to global allies.

The bottom line, according to Green, is:

“The Department of Defense and the White House have started an important conversation by doing the research to bring these problems to the foreground, and it will be up to Congress next year to provide the resources and legislation necessary to cure them.”

The post ARPN Expert Panel Member: Defense Industrial Base Report “A Significant Step Forward for the U.S. Military” appeared first on American Resources Policy Network.

However, as Sydney J. Friedberg Jr. writes for the publication:

  “(…) the Executive Order 13806 study may come as a surprise: Instead of a sweeping agenda to restore America’s high-tech lead for future decades, the study will recommend near-term fixes to more mundane problems that could lose the US a war if one broke out tomorrow. From aging facilities to imported supplies, the defense industrial base is full of potential chokepoints in the supply chain.”

One of the “chokepoints” to which Friedberg refers is the fact that “the US depends on imports for critical materials ranging from from beryllium to titanium sponge — many of which we buy from Russia, China, or the Central Asian ‘Stans.’”

To underscore the urgency of the situation and the U.S. military’s very “real and present needs,” Friedberg invokes an image that may be familiar to ARPN followers. He writes:

“Think of it in terms of the old nursery rhyme:

For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the message was lost.
For want of a message the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.

The E.O. 13806 industrial base study isn’t building any silver bullets for the US military (…) it’s about building nails.” 

Our very own Dan McGroarty recently invoked the same image in a piece for Investors Business Daily, though his reference took us back to the 13th Century proverb “For want of a nail… the kingdom was lost” – as a cautionary tale that our often unnecessary over-reliance on foreign mineral resources may become our Achilles heel.

Currently, the report is nearly completed but won’t be released for a while, and any specific policy recommendations will almost certainly be subject to lively debate.

As the administration source told Breaking Defense, “(j)ust doing that analysis was a worthy endeavor, (…) [n]ow the policy question is, how many of those gaps that were identified does it make economic and strategic sense to plug? We’re going to have an interesting debate.”

Jeffery Green, president and founder of Washington, DC-based J.A. Green & Company and member of the ARPN panel of experts, however, is optimistic. As he recently wrote on Twitter:

“The coming Industrial Base E.O. study could revolutionize the approach to supply-chain security and #strategicmaterials. Stay tuned..”

The post Soon To-Be-Released Defense Industrial Base Study May “Revolutionize Approach to Supply-Chain Security and  Strategic Materials” appeared first on American Resources Policy Network.

In the seventh installment of “Critical Minerals” Alaska, a feature series for North of 60 Mining News that “investigates Alaska’s potential as a domestic source of minerals deemed critical to the United States,” Shane Lasley zeroes in on the metal described above: Tungsten.

Once more, a familiar scenario unfolds here as is the case for so many of the metals and minerals deemed critical from a U.S. perspective – China dominates both production and global supply of the material. Writes Lasley:

“In 2017, the Middle Kingdom produced an estimated 79,000 metric tons of tungsten, roughly 82 percent of the global total for the year. Vietnam, the world’s second largest tungsten supplier, produced 7,200 metric tons last year. Russia, Austria and the United Kingdom round out the world’s top tungsten sources.

In recent years, however, China has put limitations on tungsten mining and exports of this durable metal, causing concerns about global supply.

(…)

While China touts stronger environmental safeguards as one of the primary reasons for restricting the mining of tungsten, as well as a host of other critical metals, many analysts believes the government’s motives have more to do with consolidating mining to the country’s largest producers and bolstering prices.

Whatever the motivations, China’s production and export restrictions have resulted in sharp increases in the price of ferro-tungsten, an iron (25 percent) and tungsten (75 percent) alloy traded on world markets.”

To followers of ARPN, who are no strangers to China’s propensity to play politics with its supply advantages — or, as in the case of Rare Earths, near-total supply monopolies — this should come as no surprise, and should be a consideration for policy makers in the current escalation of trade tensions between both countries.

An opportunity to at least alleviate domestic supply concerns for Tungsten may be found in Alaska, writes Lasley:

“Though none of this tough metal is currently mined in the United States, Alaska is a past producer of the tungsten minerals, wolframite and scheelite, and areas across the state show promise for future production of these and other critical minerals.” 

Among them, the Lost River skarn on the Seward Peninsula about 80 miles northwest of Nome likely holds the most promise, according to Lasley:

“With tungsten, fluorite, tin and beryllium all on USGS’s recent list of minerals critical to the United States, the Lost River deposit may well be worth the work to further define a critical metals deposit on U.S. soil.”

To read Lasley’s full piece, click here.
For other installments of his series, click here.

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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 the way of responsible domestic resource development, a little-noticed Nasdaq piece should provide some additional impetus:

“China ministry warns about reliance on imports of strategic minerals” – such is the headline of said piece which, citing a transcript of a press briefing posted on the Chinese Ministry of Natural Resources, reports that China remains “heavily reliant on imports of oil, battery metals and other minerals, while the growth in domestic reserves has slowed.” 

The report pegged the level of import reliance at 72 percent for nickel, 73 percent for iron ore and copper, 75 percent for lithium, 79 percent for gold and 90 percent for cobalt.

China, the story says, is “worried” about its supply of these key materials as “[w]ith the rebound in international mineral prices, China’s mineral import costs have risen sharply,” leading ministry officials to call for more “international mining cooperation,” which, according to Nasdaq is “a reference to Chinese involvement in overseas mining projects.”

The bottom line is, if China — which has long been thinking strategically about critical minerals, and acting accordingly all over the globe — is worried about securing a steady supply of critical mineral resources, we should be, too.  Opportunity is knocking with several key provisions in the House-passed National Defense Authorization Act (NDAA), as well as the groundwork laid with the DOI critical minerals list. The stakes are too high to squander it.

The post Chinese Worries over Critical Mineral Supply Should Provide Impetus for U.S. Policy Reforms appeared first on American Resources Policy Network.

Both pieces draw attention to China’s mineral resource dominance and point to current efforts to curb China’s leverage.

Writes Perry:

“Imagine a scenario where the U.S. is entirely dependent on a single nation for oil. You can’t. It’s inconceivable. We would never let one nation — much less a sometimes adversarial rival — dominate our supply of a critical resource. Or would we?

Astoundingly, we have. We are completely import-dependent for 21 mineral commodities, and imports account for more than half of our consumption for 50 critical minerals. Who’s our largest supplier? China.”

Citing USGS numbers highlighting our dependence on materials sourced from China, Green agrees:

“We have gifted China robust trade leverage should they chose to use it. In 2010, during a geopolitical spat over disputed waters, China cut its exports of rare earth elements to Japan. China could easily cripple American supply chains and significantly limit our ability to produce advanced radar and weapon systems by limiting or disrupting the supply of any one of these minerals. Allowing a non-allied foreign nation to control such a broad swathe of critical minerals is a significant security threat to the U.S. and its warfighters.”

The growing awareness of these issues in the mainstream media thanks to experts like Green and others spreading the word is a welcome development. However, whether we succeed in reducing Chinese leverage over our domestic industrial production and national security will depend in large part on how policy makers respond.

Both authors cite recent legislative language pending in Congress that would go far in streamlining our outdated and duplicative permitting framework for mining projects that has so far hampered responsible domestic resource development.

But while the U.S. House of Representatives has passed said provisions, the U.S. Senate has already failed to include them in its version of the National Defense Authorization Act (NDAA), once more underscoring that while awareness is growing, meaningful change will still face an uphill battle.

In Perry’s words:

“The opportunity to put a halt to our deepening reliance on imports for dozens of critically important minerals is within reach. Let’s ensure we have the robust domestic supply chain to guarantee our military has the supply of materials it needs when it needs them.”

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