The Biden administration is preparing to give a legislative impetus to domestic mining of key minerals for batteries as it aims to reduce foreign dependence on critical metals in the pursuit of clean energy.
U.S. President Joe Biden is expected to pass a defense law this week that will allow U.S. companies to access funding that can be used to improve productivity and security and upgrade existing operations, sources familiar with the plans said. Reuters.
However, it is not expected that the planned addition of base metals to batteries to the list of items in the Defense Manufacturing Act of 1950 will not facilitate the process of permitting the extraction of critical minerals in the United States, according to Bloomberg. reports.
Permits and other state and federal regulations, as well as building an internal supply chain of lithium and other minerals crucial to President Biden’s drive for cleaner energy and electrification of transport, will take years and even decades, analysts and industry officials say. The immediate supply chain for base metal batteries will not disappear in the short to and possibly in the medium term as demand for lithium, nickel, cobalt and other key metals grows and as well as prices.
Meanwhile, following the Russian invasion of Ukraine, the National Mining Association and the US Chamber of Commerce are urging the administration to be more supportive so that America can purchase most of its key minerals inside.
“We must ensure that we retain the materials”
“We must ensure that we provide the materials needed for a clean energy economy in a way that meets our stringent environmental, labor, and tribal standards and does not leave us dependent on unreliable and unstable foreign supply chains,” the source said. The administration’s plans were reported by Reuters.
In the global race to preserve critical minerals, the United States is now losing to China.
The United States imports more than half of its annual consumption of 31 of the 35 most important minerals, according to the Ministry of Energy said at the beginning of President Biden’s term. America has no domestic production of 14 of these critical minerals and is completely dependent on imports to meet its demand.
As of early 2021, the United States imported 80 percent of its rare earth elements (REEs) directly from China, and the rest indirectly came from China through other countries.
At the end of the 100-day review of key supply chains and key minerals, the White House and the administration decided in June 2021 set up a working group comprising federal agencies to “identify potential locations where important minerals could be sustainably and responsibly produced and recycled in the United States, adhering to the highest standards of environmental protection, labor, community engagement, and sustainability ».
The planned rapid incorporation of key minerals into items covered by the Defense Manufacturing Act may help U.S. domestic production in the future, but it may take years for America’s dependence on metals from China and Russia to diminish.
United States need to move faster in providing key minerals domestically and to allies such as Australia; otherwise America’s clean energy goals and supply chain in high technology and automobiles may depend on China.
“Action speaks louder than words about important minerals”
This week, a month after the Russian invasion of Ukraine shook energy and metals markets, U.S. companies reaffirmed their calls for America to move faster to acquire as many critical minerals as possible at home.
“The war in Ukraine and the sanctions against Russia have underscored America’s precarious growing dependence on important minerals and a shortage of homegrown supplies,” said Ruth Demeter, senior director of policy at the Global Energy Institute at the US Chamber of Commerce. wrote on Wednesday.
The U.S. is now counting on China, Russia and other countries for most of its critical mineral needs, Demeter says.
Earlier this year, the Biden administration canceled two leases, halting a project that would provide domestic sources of copper, nickel, cobalt and platinum, Demeter said.
“The White House is right to prioritize supply chain issues, but their clean energy goals further emphasize the importance of a comprehensive strategy for the safe and secure supply of critical minerals. Without increasing the development, production and recycling of critical minerals within the country, the administration is disrupting its own promises of clean energy, ”the US Chamber of Commerce said.
“But actions speak louder than words, and now the actions of the administration are not in line with their commitments,” Demeter wrote.
Rich Nolan, president and CEO of the National Mining Association, said last week that the U.S. has resources of nickel, cobalt, graphite, copper, lithium and rare earth elements.
“But the production of these resources remains a huge problem, which is only complicated by self-imposed barriers,” Nolan wrote in a statement. RealClearEnergy.
“Although the Biden administration has demonstrated important leadership in determining the scale of the material problem and demonstrated its readiness to address it, a comprehensive policy to address the problem has not yet been implemented,” he added.
While the construction of a mega-battery plant could take just two years, it may now take ten years to get permission to supply just one of the metals for that mega-plant, Nolan said.
“The rate at which we are creating demand for these minerals and metals is increasingly incompatible with our ability – and the ability of our allies – to deliver online to match it,” Nolan said.
Tsvetana Paraskova for Oilprice.com
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