The Biden Administration is preparing to give legislative impetus to domestic mining of key battery minerals as it aims to reduce foreign reliance on critical metals in the push for clean energy.
U.S. President Joe Biden is expected to invoke this week a defense law to allow access to funding for American companies, which can be used to boost productivity and safety and upgrade existing operations, sources with knowledge of the plans told Reuters.
Still, the planned addition of key battery metals to the list of items in the 1950 Defense Production Act is not expected to ease the permitting process for mining of critical minerals in the United States, Bloomberg reports.
Permitting and other state and federal regulations, as well as building a domestic supply chain of lithium and other minerals crucial to President Biden’s push for greener energy sources and electrification of transportation would take years, and even a decade, analysts and industry officials say. The immediate supply chain crunch for the major battery metals is not going away in the short and possibly medium-term as demand for lithium, nickel, cobalt, and other key metals are soaring and so are prices.
Meanwhile, after the Russian invasion of Ukraine, the National Mining Association and the U.S. Chamber of Commerce are calling for more support from the Administration to make sure America has the opportunity to procure domestically a larger portion of the key minerals.
“We Must Ensure That We Secure The Materials”
“We must ensure that we secure the materials necessary for the clean energy economy in a way that holds to our strong environmental, labor, Tribal engagement standards and does not leave us reliant on unreliable and unsustainable foreign supply chains,’’ a source with knowledge of the Administration’s plans told Reuters.
In the global race to secure critical minerals, the United States is currently losing to China.
The U.S. imports more than half of its annual consumption of 31 of the 35 critical minerals, the Department of Energy said at the start of President Biden’s term in office. America does not have domestic production for 14 of those critical minerals and is completely dependent on imports to supply its demand.
As of early 2021, the U.S. imported 80 percent of its rare earth elements (REEs) directly from China, with the remaining portions indirectly sourced from China through other countries, DOE said.
At the end of a 100-day review of critical supply chains and critical minerals, the White House and the Administration decided in June 2021 to establish a working group comprised of federal agencies “to identify potential sites where critical minerals could be sustainably and responsibly produced and processed in the United States while adhering to the highest environmental, labor, community engagement, and sustainability standards.”
The planned imminent inclusion of key minerals in the items covered by the Defense Production Act could help U.S. domestic production down the road, but it could take years to see America’s dependence on metals from China and Russia shrink.
The United States needs to move faster in securing key minerals domestically and from allies such as Australia; otherwise, America’s clean energy goals and hi-tech and automotive supply chains could depend on China.
“On Critical Minerals, Actions Speak Louder than Words”
This week, a month after Russia’s invasion of Ukraine rattled energy and metals markets, the U.S. businesses reaffirmed their calls that America moves faster to procure as many critical minerals at home as possible.
“The war in Ukraine and sanctions imposed against Russia have once again underscored the precarious nature of America’s growing dependence on critical minerals—and lack of homegrown supply,” Ruth Demeter, Senior Director of Policy, Global Energy Institute at the US Chamber of Commerce, wrote on Wednesday.
Currently, the U.S. relies on China, Russia, and other countries for most of its critical minerals needs, Demeter says.
Earlier this year, the Biden Administration canceled two leases, halting a project that would have provided a domestic source of copper, nickel, cobalt, and platinum, Demeter noted.
“The White House is right to prioritize supply chain issues, but their clean energy goals further highlight the importance of a comprehensive strategy for a secure and reliable supply of critical minerals. Without increased development, production and processing of critical minerals domestically, the Administration is impeding its own clean energy promises,” the US Chamber of Commerce said.
“However, actions speak louder than words, and right now the Administration’s actions do not match its commitments,” Demeter wrote.
Rich Nolan, president, and CEO of the National Mining Association, said last week that the U.S. has nickel, cobalt, graphite, copper, lithium, and rare earths resources.
“But producing these resources remains an enormous challenge made only more difficult by self-imposed barriers,” Nolan wrote in a post in RealClearEnergy.
“While the Biden administration has shown important leadership in identifying the scale of the materials challenge and signaled willingness to address it, comprehensive policy to attack the problem has yet to materialize,” he added.
While a battery megafactory could take as little as two years to build, it could take a decade right now just to obtain the permits for a mine to supply just one of the metals for said megafactory, Nolan said.
“The speed at which we are creating demand for these minerals and metals is only growing increasingly out-of-sync with our ability – and that of our allies – to bring supply online to match it,” Nolan noted.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
