inside sources print logo
Get up to date Delaware Valley news in your inbox

Forget ‘Made in China.’ America’s Tech Challenge Is ‘Mined in China’

The United States is falling way behind in the global minerals race and the big loser could be the green energy sector, which is heavily reliant on minerals to power energy sources like wind and solar.

The U.S. Geological Survey’s annual Mineral Commodity Summaries report warns America is entirely reliant on foreign sources for more than half the critical minerals needed for its modern economy. That includes both green energy technologies of the near future, plus the batteries required to power laptops, cell phones, and other everyday items integral to everyday life.

And while the U.S. has agreements with friendly nations for these imports, China remains America’s top supplier — the nation that just sent a spy balloon through the skies over some of the nation’s top security areas.

“We have never been more dependent on China and others for the minerals that are absolutely essential to modern life,” said Katie Sweeney, executive vice president and chief operating officer of the National Mining Association. “The U.S. is stumbling when it comes to our supply chains. With each new announcement of a blocked mine or a foreign sourcing agreement with countries that have questionable labor practices, we are locking in our position of competitive weakness.”

Last year, the U.S. was 100 percent reliant on net imports for 51 nonfuel mineral commodities according to the Geological Survey. The report estimated the value of domestic metal mine production in 2022 was $34.7 billion, which was 6 percent lower than the revised value from 2021. The country’s capacity utilization for the metals mining industry dropped two percentage points from 2021 to 63 percent capacity last year.

The issue is not that the U.S. does not have the capability or resources to produce many of these minerals. The problem, according to mining advocates, is mine permitting takes an average of seven to 10 years.

“It takes forever to get a new permit. How crazy is that?” Energy Secretary Jennifer Granholm said last March at the CERAWeek energy conference. Her comments that she would streamline permitting for sources of minerals needed for electric vehicles “elicit[ed] loud applause,” Reuters reported at the time.

But while comments from Granholm and Jigar Shah, head of the Department of Energy’s Loan Program Office sounded encouraging, the Biden administration remains reluctant to approve new mining projects. Just this month, the U.S. Environmental Protection Agency denied permits for Pebble Mine in Alaska – a significant source of copper and gold – to protect salmon habitat.

The project would have mined up to 73 million tons of minerals per year, and Pebble Limited Partnership John Shively said the EPA’s action was “unlawful” and promised litigation over the denial.

Ian Lange, a faculty fellow at the Payne Institute for Public Policy at the Colorado School of Mines, bluntly assessed domestic production of minerals as “crappy.” Despite widespread acknowledgment among advocates of green energy that the U.S. cannot reach aggressive climate goals without critical minerals, Lange said many are more comfortable with outsourcing mining so they don’t have to see it happening – an advanced NIMBY-ism.

“The people who are supportive of clean energy but don’t want mining in the U.S. call it ‘friend-shoring’ where it’s sourced out to countries like Canada and Australia that do have environmental safeguards and labor standards,” he said.

The average time for permits in both of those countries is two to three years, according to the National Mining Association. But regardless of the good relationship the U.S. enjoys with those countries, China far surpasses them in production.

China is the largest processor of copper, nickel, cobalt, lithium, and rare earth minerals – all needed to power rechargeable batteries and other components of green technology, the association said. China is also planning 107 lithium-ion battery mega factories compared to nine in the U.S.; according to the mining association, that is the equivalent of China building one factory per week while the U.S. builds one every four months.

Increasing domestic production would meet two goals for the disparate groups that support mining and oppose it on environmental grounds: increasing economic development here at home.

“Both parties are interested in the same story of economic growth in the U.S.,” Lange said. “Low-income populations would a chance to expand [opportunities] because that’s where mineral deposits tend to be. But we’re missing out on the jobs and economic development that might come from developing a mine and supporting infrastructure.”

North Carolina has significant lithium deposits, and Idaho features large deposits of copper. In Minnesota, Twin Metals, which could produce approximately 30 million pounds of cobalt, and PolyMet, which could yield as much as 170 million pounds of nickel, are both stalled in the permitting process, the mining association said. And neither Resolution Copper in Arizona – a potential source of 25 percent of U.S. copper – nor Lithium Americas Thacker Pass in Nevada – the largest lithium deposit in the country – show signs of progress.

And then there’s the story from Maine, where the world’s richest hard rock lithium deposit was recently discovered, but state law forbids the mining procedures needed to extract it. Thanks to anti-mining laws, the $1.5 billion find may have to remain in the ground, and not in U.S. manufactured technology.

“We have tons of these minerals,” Lange said. “We have more than we’ll ever need but nobody likes a mine in their backyard.”

Please follow DVJournal on social media: Twitter@DVJournal or Facebook.com/DelawareValleyJournal

ERVIN: Absence of Secure Mineral Supply Chain Poses Threat to U.S. Manufacturers

Now is the time to ask: How important is the mining of minerals and metals in the United States to the advancement of clean energy technologies? As demand for clean energy metals soars, and as global supply chain challenges only grow more pronounced, the answer is exceedingly clear. Building a domestic mineral supply chain is foundational to the energy transition and electric vehicle revolution.

Geopolitical considerations are an important dimension of the need for U.S. mobilization in the minerals and metals space. U.S. mineral import reliance is at alarming levels and China is now the dominant producer of half of the more than 30 minerals the U.S. government has deemed critical to our economic and national security. Overreliance on a geopolitical rival for fuel or critical materials is not a place we want to be—just ask the E.U. as it deals with Russian dominance of the European gas market. But even putting aside grave geopolitical considerations, soaring commodity prices, and the threat they pose to clean energy deployment are reasons enough for the U.S. to fully engage in mineral supply chains.

Consider what is happening with the metals used for lithium-ion batteries, the enabling technology for EVs. Lithium prices jumped a staggering 437 percent in 2021 and they continue to rise this year. New battery manufacturing capacity is coming online far faster than miners can open new mines and bring production to market. The result is a tear in the lithium market that is showing no signs of slowing down.

What’s happening with lithium – while extreme – is precisely what could happen with so many other metals essential to the energy transition. From copper and nickel to rare earth minerals there’s well-founded concern the world is financing far greater demand for these minerals and metals than their supply. New mining projects are not coming online at nearly the volume or speed needed to keep up with the accelerating pivot to green energy.

The International Energy Agency (IEA) predicted in a landmark study last year that demand for some key metals, like lithium, could grow 40-fold by 2040. The mining industry is woefully ill-suited to keep up with that kind of demand. Mining projects are notoriously complex and time-intensive. While a new battery mega factory that can crank out batteries for millions of new EVs can be built and begin operation in just two years, the mines needed to supply it take far, far longer. In fact, from inception to completion, major new mining projects in the U.S. take 17 years on average to bring to market.

The machines of the green revolution have an acute materials problem and as we’ve seen, supply challenges can upend economies. This past year car dealerships were left empty when chip shortages deeply constrained new car production. The same kind of scenario could be coming for solar panels, wind turbines, and EVs as the materials needed for their production simply don’t materialize at scale.

The American manufacturing renaissance the Biden administration envisions led by the auto sector is being built upon a supply chain that for all intents and purposes doesn’t exist. That Made-in-America parade isn’t going to march unless there’s a swift and decisive commitment to mined-in-America.

Counting on global materials production to meet demand is a recipe for failure. As the IEA implored, mineral-producing nations must lean into the challenge. And despite our growing import reliance, the U.S. is rich in mineral resources. From lithium to nickel, copper, rare earths, and even cobalt, the U.S. has vast reserves. What we need is the policy commitment to ensure we can produce them and do so quickly. The U.S. has world-leading mining environmental and labor standards, what we must do is ensure we use those standards to encourage responsible production, not block it.

The world cannot afford for the U.S. to only be a materials consumer during the energy transition. We must also become a leading producer. Instead of depending on, or hoping for, imports from foreign-trade adversaries like China, we must help produce the materials that are the building blocks for the emissions-free technologies needed to win the climate fight. American manufacturing policy and energy policy should rest on the shoulders of American mining policy.

Follow us on social media: Twitter: @DV_Journal or Facebook.com/DelawareValleyJournal