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

 Recent Developments

European Union signs minerals deals with Kazakhstan and Namibia: The European Union signed two Memorandums of Understanding (MOU), one with Kazakhstan and one with Namibia, to ensure the development of a secure and sustainable supply of raw materials and refined materials as part of its Action Plan on Critical Raw Materials. Both agreements will develop a roadmap for 2023-2024, with both parties agreeing to take action within six months of signing the MoU.

• The MOU signed with Namibia on November 8 is focused on securing a sustainable supply of raw materials, refined materials, and renewable hydrogen. Notably, the agreement seeks to support Namibia’s mining value chain by facilitating investment and funding opportunities. The agreement centers on six main pillars, including the integration, where feasible, of raw materials and renewable hydrogen value chains, the alignment of ESG standards, mobilization of funding for development of soft and hard infrastructure, capacity building, trainings, and skills development along raw materials and renewable hydrogen value chains, research and innovation cooperation, and regulatory alignment, standards, and certification.
• The MOU signed with Kazakhstan on November 7 is focused on securing a sustainable supply of raw and refined materials as well as developing renewable hydrogen and battery value chains. The agreement centers on three areas of collaboration.
  • First, closer economic and industrial integration across their raw materials, batteries, and renewable hydrogen value chains by identifying joint projects, aligning ESG standards, and modernizing their mining and refined processes and technologies by introducing new technologies and practices.
  • Second, increasing the resilience of their raw material, battery, and renewable hydrogen supply chains but enhancing transparency and information related to investments, operations, and exports.

Stakeholders and countries voice their concerns and actions on America’s Inflation Reduction Act: Numerous companies have submitted comments to the Internal Revenue Service’s notices related to provisions, including on battery components and critical minerals, in the Inflation Reduction Act. Additionally, numerous politicians and countries have voiced their concerns and actions to counter the Inflation Reduction Act.

• French Finance Minister Bruno Le Maire called on the European Union (EU) to stand firm against the bill, noting that “our industry is already suffering from a competitiveness deficit linked to the differences in energy prices between the United States and Europe” and that the EU needs a “coordinated, united and strong response by the European Union vis-à-vis our American allies.”
• South Korea, Japan, the European Union, and their automakers continued to voice their concern with the bill. Notably, the European Union wrote that “financial incentives deployed to meet the United States’ climate objectives unfairly tilt the playing field to the advantage of production and investment in the United States at the expense of the European Union and other trading partners of the United States, potentially resulting in a significant diversion of future investment and production, threatening jobs and economic growth in Europe and elsewhere.” The Korea International Trade Association wrote that without changes to the electric vehicle tax credit rules, “U.S. allies and partners will lose confidence in an administration which has highly valued multilateralism and partnership.” This sentiment was echoed by Japan, which warned that the current tax credit could deter further investment by Japanese companies. Additionally, U.S. automakers voiced their opinion on multiple notices.
• All of this being said, Reps. Emanuel Cleaver, II (D-MO) and Terri Sewell (D-AL) introduced the Affordable Electric Vehicles for America Act, which would delay the phase-in of the electric vehicle sourcing and manufacturing requirements necessary for credit eligibility from 2023 to 2026.

Countries voice their opinion on deep sea mining: The UN-affiliated International Seabed Authority (ISA) is attempting to pass regulations to allow for deep sea mining for critical minerals before Naura, a sponsor of a subsidiary of The Metals Company, begins deep sea mining in 2024. Notably, Naura triggered a provision in June 2021 in the Law of the Sea treaty that requires the ISA to complete regulations within two years. However, if the ISA does not pass new regulations by July 2023, it may be required to approve The Metals Company’s application under current environmental protection regulations.

• Last week, 9 of the 36 member states requested a precautionary moratorium on mining due to the lack of scientific data on the impacts of mining of deep-sea ecosystems and the environment. Despite the United States not being a member of the ISA because it has not ratified the Law of the Sea Treaty, it participates as an observer, and US delegate Gregory O’Brien said, “It is difficult to see how there would be measures in place to ensure effective protection for the marine environment from harmful effects” of mining by July 2023. However, a group of nations, including the United Kingdom and Norway, voiced their confidence that regulations could be finalized by the deadline, and China warned against focusing “single-handedly on only the protection of the environment.”
• On November 8 at COP27, French President Emmanuel Macron called for a total ban on deep sea mining in international waters. President Macron is the first head-of-state calling for the measure.
• Additionally, Fortescue Metals Executive Chairman Andrew Forrest said his charitable organization, Minderoo Foundation, will support a pause of deep sea mining until there is sufficient evidence regarding its environmental impact.

Saudi Arabia considering adding mining index: Saudi Arabia’s Mining Minister Bandar bin Ibrahim al-Khorayef said on November 3 that the kingdom is looking at adding a new metals and mining stock exchange index similar to Australia’s ASX 300 Metals & Mining sub-index that includes metal and mining firms. This is the country’s latest effort to diversify its economy away from a dependence on fossil fuels. Additionally, it would support the development of its untapped reserves of resources, including over $1.33 trillion in mineral resources, by garnering investment interest.

• This development follows the kingdom’s plan to award 5 mining exploration licenses and over details on 10 more over the next year.

Canada counters America’s Inflation Reduction Act with its 2022 Fall Economic Statement: Canada released its 2022 Fall Economic Statement on November 3, aimed at addressing global economic uncertainty. To address these concerns, the statement proposes multiple tax credits and actions, including a C$6.7 billion tax credit offered over five years, starting in 2023-24, centered on clean technologies, including zero-emissions vehicles and energy storage. The refundable tax credit is equal to 30 percent – including a 10 percent labor conditions provision – of the capital cost of investments in electricity generation systems, stationary electricity storage systems, low-carbon heat equipment, and industrial zero-emission vehicles and related infrastructure.

• For minerals specifically, the statement aims to build upon Canada’s first Critical Minerals Strategy by taking “the necessary steps to attract investment, stay competitive, and accelerate the net-zero transition for critical minerals projects. This means pursuing opportunities for Canada across the entire critical minerals value chain, including exploration, mining, processing, manufacturing, and recycling. The government will ensure that Canada’s tax and investment programs, skills training, and research and development ecosystem help to grow our economy and support our democratic allies with sustainably developed clean technologies and goods.”

Sen. Joe Manchin (D-WV) and President Joe Biden look at the Defense Authorization Act of 2023 to pass permitting reform: Sen. Joe Manchin (D-WV) noted that he was working on including the Energy Independence and Security Act of 2022 in the National Defense Authorization Act (NDAA) of 2023 at Stanford University’s Innovation Day & Global Energy Forum that took place on November 1-3. Additionally, White House Press Secretary Karine Jean-Pierre told reporters on November 10 that President Biden hopes Congress will advance the bill as part of the NDAA. The bill, which aims to overhaul permitting in the United States, could be included in the NDAA or Continuing Resolution needed to keep the government funded after December 6.

• However, with Republicans gaining ground in the House, members of the GOP dismissed his efforts. Specifically, Rep. Cathy McMorris Rodgers (D-WA) noted that if Republicans take control of the House, permitting would be a “top priority” and that Sen. Manchin’s bill does not “get us to where we need to be.” She also noted that permitting is the number one barrier for energy projects and that the GOP is likely to include measures to expedite critical minerals mining and processing projects on federal lands.

U.S. Republican Representatives are prioritizing critical minerals mining at COP27: Republican lawmakers are prioritizing discussions surrounding critical mineral development for use in nuclear energy and electricity transmission to batteries for electric vehicles during the second week of COP27. While no Republicans in the House of Representatives or Senate voted in favor of the Inflation Reduction Act, they are focused on ensuring the U.S. maintains and builds upon its nuclear power, where critical minerals are essential. Representative John Curtis (R-UT) said, “Often we’re willing to turn a blind eye to conditions of extraction overseas. We can do it cleaner, more responsibly, here in the United States.”

• 16 Democratic lawmakers are also urging President Biden to sign a non-binding MOU that sets a target for 30% of new vehicles to be zero-emission by 2030, scaling up to 100% by 2040, which they believe would set a global standard. The MOU has already been signed by 16 countries, as well as endorsed by over 60 state and local governments, manufactures, and financial institutions.

 Looking Ahead

• FTI Consulting is hosting What do the results of the U.S. midterm elections mean for policy towards Latin America? virtually on November 14 at 9:30am EST: FTI experts Matthew Dempsey, Blanca Perea Solano, Michael Cullen MBE, and Carl Meacham will be discussing the implications of the elections in Latin America, with a particular focus on the mining and renewable energy sectors.
• 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.
• Fastmarkets is hosting Addressing Risks in the European and U.S. Battery and EV Markets virtually on November 15: The event will cover expected supply and demand balances for different battery materials, the different global and regional realities as supply chains become more regional in nature, battery cost challenge and what that may mean for mass EV adoption, the apparent conflict between ESG and commercial priorities, and scenarios that can mitigate supply and price risk and unleash the full potential of the European and US markets.
• The Ministry of Mines & Geology, Republic of Guinea, and AME Trade Ltd. is hosting Symposium Mines Guinea in Palais du Peuple Conakry, Republic of Guinea, on November 15-17: The event will focus on optimizing the mining industry to catalyze the socio-economic development of Guinea.
• The Northern Miner is hosting Canadian Mining Symposium in London, United Kingdom, on November 28: This event will outline discover junior and mid-tier companies’ plans for future growth, as well as provide a broader understanding of some of the macro issues affecting the mining and metals markets.
• 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 virtually 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

• Mining Weekly: UK supporting the construction of large-scale lithium refinery 
• E&E News: Lawmakers call for innovation in nuclear waste management 
• Reuters: Bosch, IBM join forces to seek substitute critical minerals 
• Automotive World: US lithium mining: not if, but when 
• Reuters: Zimbabwe’s new mineral royalty policy comes into force 
• Australian Financial Review: Hundreds of thousands of WA jobs ‘dependent’ on China 
• S&P Global: New optimism for extracting minerals from coal waste as federal dollars flow in
• Reuters: China opposes Canada’s order on lithium mining investments 
• E&E News: Alarms over EV-mineral shortages grow louder 
• CNBC: Germany’s dependence on China is ‘overblown,’ but critical goods diversification needs to improve: EU Chamber of Commerce 
• E&E News: White House releases net-zero road map
• United States Institute of Peace: The Geopolitics of Deep-Sea Mining and Green Technologies
• Los Angeles Times: The world needs chromite and lithium. Afghanistan has them. What happens next? 
• Reuters: Australia asks miners to back referendum on Indigenous rights 

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