energy insights

Biden Expresses Concern over Chinese Metals Monopoly

A week prior to giving his state of the union address, President Biden was lamenting our nation’s dependence on China for critical supplies of lithium and other materials used in electric vehicles (EV) and other high-tech products.

“We can't build a future that's made in America if we ourselves are dependent on China for the materials that power the products of today and tomorrow,” Biden said.

There is growing concern over the fragile circumstances surrounding a U.S. supply chain that depends on China, especially given new geopolitical concerns caused by Russia’s recent invasion of Ukraine.

Domestic lithium production essential to America’s energy future

With a word, Chinese President Xi Jinping could reduce or stop shipments of refined lithium and other elements necessary to manufacture lithium-ion batteries, effectively crippling the U.S. EV industry. That puts the U.S. in a precarious position given a recent U.N. report on climate change urging a rapid cut to carbon emissions to avoid irreversible damage to the earth’s ecosystems.

The U.S. Department of Defense has been told to reduce its dependence on China for lithium and other critical minerals. That has sparked renewed optimism from some U.S. miners hoping to move major projects forward.

But not so fast, the government says. On one hand, the nation is approaching a potential crisis in its dependence on Chinese lithium battery components. On the other hand, environmental concerns have slowed progress on proposed U.S. lithium mines, such as Thacker Pass and Rhyolite Ridge. Among the most high-profile lithium projects, these two western Nevada mines have seen opposition from environmental groups, tribes, ranchers and nearby communities.

According to Reuters, several companies are working to open U.S. mines and are seeking supply contracts with the Pentagon, but because the projects are still seeking regulatory approvals, the military is forced to pivot toward foreign suppliers. Congress has deemed supplies from allies acceptable if no domestic supply exists. However, to solely look to allies versus investing in domestic resources is a huge oversight.

Environmental issues are also an important concern

Biden has expressed support for overhauling mining regulations but has kept a focus on environmental concerns as well. He says he would only support new U.S. mines if the industry can avoid the historical injustices that many mining operations have left behind.

“Environmental protections are paramount,” Biden said at a recent event. “We have to ensure that these resources actually benefit folks in the communities where they live, not just shareholders.”

According to Reuters, the White House plans to form a committee to draft an overhaul proposal for the 1872 Mining Law, which has governed mining across much of the United States since the 19th century.

Mining industry wants quicker production

But the industry says the country can’t wait. The National Mining Association, a trade group for U.S. miners, said Biden should move faster to permit domestic mines to ensure long-term supplies.

“There are ample domestic resources and extremely promising projects that are currently in the permitting process awaiting approvals from the administration," said NMA President Rich Nolan.

These projects would begin the urgent task of increasing domestic supplies, said Nolan, who warned that permitting could be further delayed by Biden's attempt to change U.S. mining laws.

Nolan may be right. With the increased instability the world has witnessed in the last few weeks, the future of American mobility could be hanging in the balance.

Direct lithium extraction offers opportunities

If the Biden administration is simply trying to keep new conventional mines from opening in the U.S. over environmental concerns, then the Department of Defense needs to look at other alternatives to source critical mineral stockpiles. Supporting domestic battery manufacturing as well as working with U.S. exploration companies that have proven track records to find additional domestic resources would be a great place to start.

The Department of Energy has awarded various grants toward the development of rapid extraction processes for removing strategic metals like lithium from geothermal and oilfield brines. Given the advancement of these technologies, the administration needs to look into the rapid adoption of direct lithium extraction projects within the U.S. to bring newly evolving projects, like Galvanic’s Smackover prospect, online as quickly as possible.