As geopolitical and trade tensions continue to flare across the globe, a bipartisan group of U.S. senators is sounding the alarm on supply chain challenges for nickel, one of the key battery criticals.

In a letter to Biden administration officials, the senators, led by U.S. Sens. Kevin Cramer (R-ND) and Tina Smith (D-MN), express their concerns regarding media reports of a potential “limited free trade” agreement between the United States and Indonesia on critical minerals.

The Biden administration is looking to expand the number of countries to qualify for the tax credits afforded under the recently enacted Inflation Reduction Act (IRA), but senators argue the Administration is forging ahead with negotiations with Indonesia — a country that is not only known for questionable human rights, labor and environmental standards, but has also restricted trade in critical minerals and floated the idea cartelization ideas for nickel producing countries – without having developed a comprehensive accounting of domestic sourcing options, and the opportunities from countries with which the U.S. already has trade agreements.

“(…) pursuing additional critical mineral ‘free trade agreements’ without the involvement of Congress, before the development of domestic mineral resources, and without achieving meaningful and enforceable standards for labor and environmental protections would undermine the intent of Congress and undermine the jobs and futures of our workers,” the senators write.

A key battery critical, nickel is also an essential building block for the production of high-temperature aerospace alloys and stainless steel.  A “relatively benign supply profile” kept nickel off the U.S. Government’s first List of Critical Minerals in 2018. However, the metal’s increased usage in EV batteries, and the USGS’s expanded criticality criteria to include materials with only a single domestic producer along their raw materials supply chains – identified as having a single point of failure – led to nickel’s incorporation into the 2021 update to the U.S. Government Critical Minerals List.   In 2022, nickel was also named in the Defense Production Act Presidential Determination as one of five battery materials “essential to the national defense.” 

As the largest nickel producer with the largest known reserves of the material, Indonesia is considered the “nickel capital of the world.”  Followers of ARPN may recall last year’s reports of the country’s government studying the “possibility to form a (…) governance structure [similar to OPEC]” for nickel-producing countries.

And while the United States’ only primary nickel mine in operation, the Eagle Mine in Michigan, is nearing the end of its life cycle, other domestic opportunities are readily available, as acknowledged by the U.S. Department of Defense, which recently awarded funding  under Defense Production Act Title III authority) to Talon Nickel (USA), LLC to increase the domestic production of nickel.

The $20.6 million agreement uses funds appropriated by the Additional Ukraine Supplemental Appropriations Act, to advance nickel exploration and mineral resource definition of the Tamarack Intrusive Complex (TIC).   The project is not only considered promising due to its available nickel resources, but also in light of its harnessing of new technologies to minimize its carbon footprint, which is why the U.S. Department of Energy previously issued a $2.2. million award to fund to a joint venture between Talon Metals Corp. and Rio Tinto at the Tamarack Nickel Project site 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 federal grants follow Talon’s $114 million 2022 grant from the Department of Energy to build a processing plant in North Dakota – making the company one of the first recipients of Infrastructure, Investment and Jobs Act renewable energy funds.

All of which is proof that Critical Mineral resource development can begin at home, where political risk is low and environmental, labor and mine safety standards are high.  As the senators argue:

“(…) given the extraordinary taxpayer resources at play, we strongly believe that eligibility for the critical minerals credit must prioritize domestic producers and existing free trade agreement partners. If expansion is deemed necessary, it should be directed toward countries with strong labor, human rights and environmental standards.”