Critical Minerals: What’s On & What’s Next

 Recent Developments

Canada is restricting foreign state-owned investments in critical minerals: Canada’s Industry Minister, Francois-Philippe Champange, and Natural Resources Minister, Jonathan Wilkinson, announced the federal government will begin restricting the ability of foreign state-owned companies to buy or invest in Canada’s critical minerals sector. Canada will consider the extent to which a foreign government might have control over Canadian assets, the amount of competition in the sector, and whether the deal might endanger Canadian security. This plan comes as tensions between China and Canada are growing.

• Notably, Canada’s government ordered Sinomine (Hong Kong) Rare Metals Resources Co., Limited to divest itself of its investment in Power Metals Corp, Chengze Lithium International Limited to divest itself of its investment in Lithium Chile Inc, and Zangge Mining Investment Co., Ltd. to divest itself of its investment in Ultra Lithium Inc. based upon “acts and evidence and on the advice of critical minerals subject matter experts, Canada’s security and intelligence community, and other government partners.”
• Canadian Natural Resource Minister, Jonathan Wilkinson, will work on expediting approvals for critical mineral mining projects. He also emphasized in remarks to the Canadian Club of Toronto the mining industry is a sector where Ottawa and the provinces must find ways to work more collaboratively and efficiently to increase production.

U.S. and UAE sign MOU to invest $100 billion in clean energy: The U.S.-UAE Partnership for Accelerating Clean Energy (PACE) will invest $100 billion to deploy 100 gigawatts of clean energy by 2035. The agreement will prioritize promoting advanced nuclear technology, facilitating investment in critical minerals mining, deploying carbon capture, and increasing production of clean fuels for aviation and shipping. The partnership will also promote investment in clean energy in emerging economies.

• The UAE and U.S. will provide technical, project management, combined with funding assistant for commercially and environmentally sustainable energy projects in the private and public sector.

Saudi Arabia shows efforts to diversify resource production into mining: According to a statement by Mining Minister Bandar Al-Khorayef on November 2, Saudi Arabia plans to award 15 mining exploration licenses to international investors. The first tranche of five licenses in Bir Umq, Jabal Idsas, Umm Hadid, Jabal Sahabiyah, and Ar Ridaniyah will be awarded in 2023 with copper, zinc, lead, and iron deposits, while details for ten more licenses will be released in 2023.

• As part of Crown Prince Mohammed bin Salman’s Vision 2030, the country plans to diversify from fossil fuels and into a leading industrial and mining powerhouse. This will include attracting over $32 billion in investment to its mining and mineral sector, which has an estimated $133 trillion worth of unused mineral resources, including zinc, iron, aluminum, phosphate, gold, copper, and uranium.
• To date, over 145 licenses have been issued, and the country has seen a 27 percent year-on-year growth in its mining revenue, according to the minister.
• Additionally, the kingdom plans to expand beyond exploration and extraction to processing and manufacturing to become a leading green metal refining and processing hub, according to Mining Minister Bandar Al-Khorayef.

The European Union warns about a potential trade war over electric vehicle tax credits in the United States’ Inflation Reduction Act: U.S. Trade Representative Katherine Tai traveled to the European Union (EU) to defuse tensions regarding electric vehicle tax credits for American mined and assembled vehicles in the Inflation Reduction Act (IRA). French President Emmanuel Macron and German Chancellor Olaf Scholz agreed that the EU should retaliate with a “Buy European Act” if the legislation is enacted. Additionally, the South Korean, Czech, and Chinese government have expressed similar concerns about the legislation.

• EU members claim that new EV tax credits would discriminate against all 27 nations in the EU and break the World Trade Organization rules. In an effort to address concerns, a joint task force between the European Commission and the U.S. was set up and intends to convene soon.
• Czech Trade Minister, Jozef Sikela, believes the EU should receive similar treatment to Canada and Mexico, stating, “We are expecting a derogation (in the U.S. Inflation Reduction Act) for EU member states – ideally we would like to have the same as Canada and Mexico, but we have to be realistic and see what we can negotiate.”
• Sweden plans to voice its concerns regarding the IRA’s EV tax credits at the bilateral meeting on November 7. Notably, Sweden will be the next president of the Council of the EU in January.

Deep sea mining faces support and opposition prior to the International Seabed Authority conference: The International Seabed Authority (ISA), an intergovernmental body created under the 1982 UN Convention on the Law of the Sea and its 1994 Agreement on Implementation, will meet from October 31 through November 11 to discuss deep sea mining among other topics. The organization is the global authority for deep ocean waters outside of a country’s jurisdiction and to-date, has issued 31 exploration licenses, but many parties are worried deep sea mining could negatively impact the environment without regulations in place. Notably, interest in deep sea mining has grown significantly and ISA now meets three times a year to discuss it and plans to release a key decision as soon as July 2023 on deep sea mining.

• Additionally, Japan intends to mine rare earths from the seabed near the Ogasawara islands, 6,000 meters below the water’s surface to counter China’s control of the industry, according to unidentified officials. The government will start technological development in the next fiscal year to establish extraction methods and aims to conduct exploratory extraction within five years.
• However, while Japan looks to deep sea mining, Germany’s ISA delegation said, “The German Government here wants to underline its view that the current knowledge and available science is insufficient to approve deep seabed mining until further notice,” describing its call for a “precautionary” pause. The delegation also stated Germany would not sponsor any deep sea mining plans “until the deep-sea ecosystems and the impacts of deep-sea mining have been sufficiently researched.”

Australian Minister discusses ending reliance on Chinese minerals: Australia’s Resources Minister Madeleine King told Bloomberg News in an interview that it is a “pipe dream” for Western nations to end their reliance on Chinese critical minerals. She believes China’s foresight in developing the industry has placed it in a pivotal role to remain dominant in the industry; however, the U.S. and Australia will continue to work together to increase critical mineral production and lower their dependence on China because she believes no “country wants to have global supply chains dependent on kind of a single point of failure.”

• Additionally, when asked about Minister King’s comments, Chinese Foreign Ministry Spokesperson Zhao Lijian responded with, “countries with critical mineral resources need to play a positive role in keeping relevant industrial and supply chains safe, secure and stable” and “China will remain an integral part of the international industrial division of labor” during a press conference on November 1.

Mexican President announced the United States and Mexico’s plan to create a clean-energy hub on the border: On October 31, Mexican President Andres Manuel Lopez Obrador announced the U.S. and Mexico are working together on the “Sonora Plan” to turn the border into a clean-energy hub. These plans include building five large solar plants, remodeling car factories to accommodate EV production, as well as producing batteries and semiconductors in the state of Sonora.

• Additionally, President Lopez Obrador said he is examining a lithium mining concession given to Chinese company Ganfeng Lithium Co. before Mexico nationalized its metal resources, saying the law could be retroactively applied to the company.

Indonesia is considering forming an OPEC-style group for critical minerals: Indonesia is looking at the mechanisms used to create OPEC to employ a similar governance structure to the supply of metals central to the energy transition, according to Bahlil Lahadalia, Indonesia’s Minister of Investment. Currently, Indonesia is the world’s largest nickel producer, generating approximately 38 percent of the world’s refined supply. Indonesia is expected to be the biggest source of growth for these metals in the coming years. However, many of the country’s resources are currently Chinese-owned and carbon-intensive, with China doubling its investment in the first half of 2022 to a total of $3.6 billion.

Newly-elected Brazilian President promises to implement greener mining practices: Brazil’s President Luiz Inácio Lula da Silva released a proposal for investments in strategic natural resources, sustainable mining for the energy transition, zero deforestation, and zero carbon emissions while also promising to end illegal mining in the Amazon. However, the proposal does not set a target date for any of these actions. This follows a September proposal to increase royalties known as a “special stake” on minerals of exceptionally high value to benefit the country.

European Union agrees to ban new non-electric cars starting in 2035: On October 27, the Council and the European Parliament reached an agreement to effectively ban all new nonelectric cars. The agreement, which still needs to be approved but is expected to without significant changes, would require a 55 percent CO2 emissions reduction target for new cars and 50 percent for new vans by 2030 compared to 2021 levels. Additionally, it would require a 100 percent CO2 emissions reduction target for cars and vans by 2035.

• The agreement is the first deal part of the “Fit for 55” package aimed at making progress towards climate neutrality and the green transition.

 Looking Ahead

• Benchmark Mineral Intelligence is hosting Benchmark Week 2022 in Los Angeles, California, on November 14-18: This event will focus on EV outlooks, lithium-ion gigafactories, and critical minerals including lithium, cobalt, nickel, graphite, and manganese.
• Beacon Events is hosting Mines and Money London in London, United Kingdom, on November 29 – December 1: The event will look at the energy transition, ESG, sustainability, and the circular economy.
• The American Exploration & Mining Association is hosting its 128th Annual Meeting: Secure Supply Chains Start with Us in Sparks, Nevada, on December 4-9: The event is the second largest and longest-running annual mining convention in the U.S. and will feature over 100 speakers and 250 exhibitors.
• Deutsche Bank Securities is hosting the 7th Annual Lithium and Battery Supply Chain Conference in New York City, New York, on December 7: The event will include presentations and one-on-one/group meetings with senior executives from the leading lithium producers, battery manufacturers, diversified lithium recycling, consultants, and rare earth producing companies.
• Saudi Arabia’s Ministry of Industry and Mineral Resources is hosting the 2023 Future Minerals Forum in Riyadh, Saudi Arabia, on January 10-12: The event will focus on the global outlook and future of mining, regionally and worldwide, the sector’s critical role in the energy transition, contributions of mining to the development of societies, as well as mining opportunities in the Kingdom and the wider region that stretches from Africa to Western and Central Asia.
• Beacon Events is hosting Mines and Money Online Connect on January 24-26: The event will focus on bringing together miners, investors, financiers, and industry professionals to network, hear market analysis, compare investment opportunities, share knowledge, discuss, debate, and conduct business virtually.
• Australia’s Mining Monthly and Mining Magazine are hosting the Future of Mining Sydney in Sydney, Australia, on February 20-23: The event will deliver an in-depth and engaging agenda focused on accelerating towards the zero entry, zero harm, and zero emission mine.

 In Case you Missed It

• World Economic Forum: Why Innovation in the mining sector is critical for the energy transition
• E&E News: Lack of graphite could gum up American EV market
• Modern Ghana: Ban small scale mining until galamsey solution is found— Religious Bodies urge Akufo-Addo
• Americas Quarterly: For Latin America, Will Booming Lithium Bring Competition—or Collaboration?
• Australian Financial Review: Former NZ prime minister Clark sounds alarm on green metals rush
• E&E News: Despite rhetoric, GOP-led states start to embrace EVs
• Australian Financial Review: Feds wave through rare earth sales to China
• Axios Pro: “Lithium, nickel … cobalt do not just magically appear”
• Voice of Nigeria: President Buhari Gives Reason For Prioritising Mining Sector
• The Business Times: South Korea launches government-backed battery alliance to source key metals
• Utility Dive: How the US plans to transform its lithium supply chain
• POLITICO: Republicans plan an energy agenda designed to keep Democrats on their heels
• GreenBiz: Made in America: A lithium supply chain for EV batteries
• The Diplomat: Minerals and China’s Military Assistance in the DR Congo
• IHS Markit: A reckoning for EV battery raw materials
• Bloomberg: The Lithium Market Is Hotter Than Ever and Traders Are Moving In
• E&E News: Calif. regulators back zero-emission delivery trucks
• South China Morning Post: If China can’t get American tech, maybe US allies will be more open to supplying chips
• 12 News: Sen. Kelly asks feds to halt Salton Sea project funding until California gives up more Colorado River water

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