In a recent piece for Reuters, columnist Andy Home unpacks the U.S. Senate-passed bipartisan infrastructure package. While the bill has yet to make it through the U.S. House of Representatives and a likely conference committee, it is worth taking a look at what its passage could mean for the critical minerals sector.
According to Home, the $1 trillion package, as passed by the Senate, “is undoubtedly good news for industrial metals,” as more funding for highway and railway systems as well as power grid upgrades “will mean more demand for steel, copper, and aluminium [as they say in the UK].”
He adds that “when it comes to battery metals and critical minerals, the bipartisan bill is as much about boosting domestic supply as demand,” and its provisions mark a “broader investment drive across the full length of the metallic supply chain.”
Home highlights the following provisions:
- Building on the Department of Energy’s R&D efforts across the REE spectrum ranging form primary processing to recycling, the bill “hardens the commitment with a $140 million grant to build a facility ‘to demonstrate the commercial feasibility of a full-scale integrated rare earth element extraction and separation facility and refinery’” in the context of a public-private partnership.
- The bill also earmarks $100 million annually for through 2024 for critical mineral development, processing and recycling, with a minimum of 30% designated for recycling projects.
- U.S.-based projects will be prioritized and no project may export to a “foreign entity of concern.”
- While the bill only allocates $7.5 billion for EV battery charging, Home says “the direction of electric travel is clear,” with President Biden having signed his executive order stipulating that 50% of all domestic new vehicle sales by 2030 should be EV battery powered.
- To address rising demand for battery tech metals, the bill designates $3 billion for processing, and an additional $3billion for battery manufacturing projects.
- Grants in this context will be only be awarded to applicants demonstrating “U.S. ownership, North American intellectual property rights and a commitment not to ‘use battery material supplied by or originating from a foreign entity of concern.’”
- Acknowledging that Federal permitting process has served as “an impediment to mineral production and the mineral security of the United States,” the bill introduces performance metrics for approving critical mineral mines.
Home sees a challenge in fast-tracking Federal permitting in light of the “growing push-back against ‘dirty’ mining.” However, he sees an opportunity to bridge this “green-green divide” in new efforts by mining companies to re-think mine “waste,” — and essentially harness gateway/co-product metal relationships.
He points to Rio Tinto’s Scandium operations in Quebec, Canada, as an example:
“Companies such as Rio Tinto are now going back to re-examine what they’ve been throwing away. In the case of the company’s Canadian titanium business, they found scandium, designated a critical mineral by both the United States and Europe.
A relatively modest $6 million investment will produce three tonnes per year of scandium oxide – around 20% of the global market – without the need for any additional mining.”
As Home points out, the infrastructure bill embraces the “whole-concept” or “total mining” concept, instructing USGS to comprehensively survey national minerals resources, “using a whole ore body approach rather than a single commodity approach, to emphasize all of the recoverable critical minerals in a given surface or subsurface deposit”.
Home sees provisions calling for USGS to “map and collect data for areas containing mine waste to increase understanding of above-ground critical mineral resources in previously disturbed areas,” as the ones that can help reconcile the “green-green” issue, because “building new mines will remain a headache for critical minerals planners everywhere so going back to the stuff already mined makes a lot of sense.”
While changes to the bill must be reasonably expected in the coming weeks, the general thrust is clear, and it is encouraging to see that lawmakers are acknowledging and addressing the importance of critical minerals and the urgency of associated supply chain challenges.