The Biden administration is preparing to provide legislative impetus to domestic mining of key battery minerals as it seeks to reduce foreign reliance on critical metals in the clean energy quest.
US President Joe Biden is expected to invoke a defense bill this week to give American companies access to finance that can be used to increase productivity and security and modernize existing operations, sources with knowledge of the plans said Reuters.
Still, the proposed addition of key battery metals to the list of articles in the Defense Production Act of 1950 is not expected to ease the permitting process for mining critical minerals in the United States, Bloomberg reports.
Permitting and other state and federal regulations, as well as establishing a domestic supply chain for lithium and other minerals critical 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 crisis in the supply chain for key battery metals will not go away in the short and possibly medium term as demand for lithium, nickel, cobalt and other key metals surges so are the prices.
Meanwhile, following the Russian invasion of Ukraine, the National Mining Association and the US Chamber of Commerce are calling for more support from the government to ensure America has the ability to source more of its key minerals domestically.
“We need to make sure we secure the materials”
“We must ensure that we secure the materials necessary for the clean energy economy in a way that meets our strict environmental, labor and tribal standards and does not make us dependent on unreliable and unsustainable foreign supply chains,” a source with knowledge of the Government plans to Reuters.
In the global race to secure critical minerals, the United States is currently losing to China.
The US imports more than half of its annual consumption of 31 of the 35 critical minerals, according to the Department of Energy called at the beginning of President Biden’s term. America has no domestic production for 14 of these critical minerals and is entirely dependent on imports to meet its needs.
As of early 2021, the US imported 80 percent of its rare earth elements (REEs) directly from China, with the remaining shares being sourced indirectly from China through other countries, the DOE said.
At the end of a 100-day review of critical supply chains and critical minerals, the White House and administration decided in June 2021 Establish a task force composed of federal agencies “to identify potential sites where critical minerals could be sustainably and responsibly produced and processed in the United States while maintaining the highest environmental, labor, community engagement, and sustainability standards.” .
The planned imminent addition of key minerals to items covered by the Defense Production Act could help US domestic production, but it could be years before America’s reliance on metals from China and Russia shrinks.
The United States must move faster in securing important minerals domestically and from allies like Australia; otherwise, America’s clean energy goals and its high-tech and automotive supply chains may depend on China.
“At Critical Minerals, actions speak louder than words”
This week, a month after Russia’s invasion of Ukraine rocked energy and metals markets, US companies reiterated calls for America to move faster to source as many critical minerals domestically as possible.
“The war in Ukraine and the sanctions imposed on Russia have once again underscored the precarious nature of America’s growing reliance on critical minerals — and lack of domestic supplies –” said 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 mineral needs, Demeter says.
Earlier this year, the Biden administration canceled two leases and halted 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 its clean energy goals underscore the importance of a comprehensive strategy for secure and reliable supplies of critical minerals. Without increased domestic development, production and processing of critical minerals, the government is impeding its own clean energy promises,” the US Chamber of Commerce said.
“However, actions speak louder than words, and at the moment the administration’s actions fall short of its commitments,” Demeter wrote.
Rich Nolan, President and CEO of the National Mining Association, said last week that the US has nickel, cobalt, graphite, copper, lithium and rare earth resources.
“But producing these resources remains an enormous challenge that is only compounded by self-imposed barriers,” Nolan wrote in a post in RealClearEnergy.
“While the Biden administration has shown important leadership in identifying the magnitude of the materials challenge and signaled a readiness to address it, comprehensive policies to address the issue have yet to materialize,” he added.
While a battery mega-factory could take as little as two years to build, it could currently take a decade just to get permits for a mine to supply just one of the metals for that mega-factory, Nolan said.
“The speed at which we create demand for these minerals and metals is increasingly at odds with our ability — and that of our allies — to match supply online,” Nolan noted.
By Tsvetana Paraskova for Oilprice.com
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