BIDEN ADMINISTRATION PLANS TO SOURCE MINERALS FROM ALLY NATIONS AND FOCUS ON PROCESSING

According to a report from Reuters, the Biden administration will continue to rely on ally countries to supply the minerals needed for electric vehicles and clean energy technology while focusing on increased domestic processing. Two administration officials with direct knowledge told Reuters the move is part of a strategy designed to placate environmentalists.

 

The U.S. Geological Survey reported earlier this year that the United States is 100 percent import reliant 17 minerals and more than 50 percent reliant on 46 minerals. The Biden administration’s infrastructure plans gave the U.S. mining industry hope that the administration would rely primarily on domestically sourced metals, as his campaign had signaled last autumn, to help fulfill his ambitions for a less carbon-intensive economy. This report could dash those hopes.

 

Rather than focus on permitting more U.S. mines, Biden's team is more focused on creating jobs that process minerals domestically into electric vehicle (EV) battery parts, according to the people.

 

Such a plan would help cut U.S. reliance on industry leader China for EV materials while also enticing unions with manufacturing work and, in theory, reduce pandemic-fueled unemployment.

 

The U.S. Commerce Department is organizing a June conference to attract more EV manufacturing to the country. Biden's proposed $1.7 trillion infrastructure plan earmarks $174 billion to boost the domestic EV market with tax credits and grants for battery manufacturers, among other incentives. The department declined to comment.

 

It takes an average of 16 years from a mine to move from discovery into production in the United States. There was hope that the Biden administration would look to measure to speed the permitting process.

 

“It’s not that hard to dig a hole. What’s hard is getting that stuff out and getting it to processing facilities. That’s what the U.S. government is focused on,” said one of the sources.

 

The approach would see the United States rely on Canada, Australia and Brazil - among others - to produce most of the critical raw materials needed, while it competes for higher-value jobs turning those minerals into computer chips and batteries, according to the two sources.

 

Securing the full supply chain from metals to batteries does not require the United States to be the primary producer of the raw materials, said one of the sources.

 

A full strategy will be finalized after a year-long supply chain review involving national security and economic development officials.

 

Ali Zaidi, deputy White House national climate advisor, said the administration was focused on a strategy that “leverages our domestic resources in a way that's responsible,” noting that included recycling in the supply chain.

 

While U.S. projects from small and large miners alike will feel the impact, the pain from any blocked projects will fall disproportionately on smaller, U.S.-focused companies. Many large miners also have global projects that could benefit from the administration’s plan.