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

 Recent Developments

President Emmanuel Macron criticizes U.S. Inflation Reduction Act during state visit: President Emmanuel Macron is in Washington D.C. this week for a state visit where he met with President Joe Biden to discuss topics including the Inflation Reduction Act and the war in Ukraine. On November 30, President Macron told members of Congress and business leaders that subsidies in the Inflation Reduction Act were “super aggressive” for France’s businesses. During a joint press conference, President Biden stated that there are “obviously going to be glitches.” He continued by saying that “there’s tweaks that we can make,” and the legislation “never intended to exclude folks who were cooperating with us.”

• French Finance Minister Bruno Le Maire has also commented on the impacts of the U.S.’s new landscape of green energy subsidies, stating that they would have “negative side effects… [on the] European economy.”
• Members of the U.S. Congress have unfavorably responded to President Macron’s requests to reduce back U.S. green-energy subsidies within the Inflation Reduction Act. Key Democratic lawmakers, including Ron Wyden (D-OR), Sen. Debbie Stabenow (D-MI), and Rep. Dani Kildee (D-MI-05), have explicitly noted that they have no interest in amending the text of the bill.

Permitting reform remains uncertain in the United States in 2022: Now that midterm elections are over in the United States, with one exception, all eyes in Washington have turned towards passing the National Defense Authorization Act of 2023 (NDAA) and a spending bill to keep the government funded past December 16. However, while these bills are a priority for the federal government, the inclusion of Sen. Joe Manchin’s (D-WV) permitting reform bill, the Energy Independence and Security Act of 2022, in the NDAA remains uncertain. House lawmakers are aiming to have the NDAA ready for a vote next week.

• Even within the Democratic party, there are disagreements on permitting reform. Notably, Rep. Raúl Grijalva (D-AZ-03), who chairs the House Natural Resources, sent a letter to Speaker Pelosi and Majority Leader Hoyer on November 21 asking them “to exclude harmful permitting provisions from must-pass legislation this year.” Additionally, the House Sustainable Energy and Environment coalition led by Reps. Gerry Connolly (D-VA-11), Doris Matsui (D-CA-06), and Paul Tonko (D-NY-20) published a policy brief that identified two primary pillars to permitting reform: “electricity grid reform, particularly around transmission, and community engagement.”
• Mike Rogers (R-AL-03), who is the ranking member on the House Armed Services Committee, said that including Sen. Manchin’s permitting reform in the NDAA was “Not an option” on November 17. Additionally, Sen. James Inhofe (R-OK), who is the ranking member on the Senate Armed Services Committee, said he opposed including the permitting reform bill in the NDAA because it “is the most important bill we pass every year and I take that very seriously,” and that he “will not support it in the NDAA.”
• However, with Republicans gaining control of the House, an energy and environment package including permitting reform will emerge from the Republican-controlled House in January, according to House Republican leaders. Notably, Rep. Bruce Westerman (R-AR-04), who could become chair of the House Natural Resources Committee, noted that “We need to step up our mining activities if we’re going to have an electrified economy,” and emphasized it is about “making environmental laws work so we can protect the environment and have a strong and vibrant economy at the same time.”

Report shows Western nations could end Chinese battery reliance by 2030: A new Goldman Sachs report prepared for clients projects that the U.S. and Europe could decrease reliance on China for EV batteries by 2030 with an investment of more than $160 billion, including $78.2 billion in batteries, $60.4 billion in components, $13.5 billion in mining lithium, nickel, and cobalt, and $12.1 billion in refining minerals. Currently, China produces 75% of the world’s batteries due to market dominance in the production of battery materials and components. Analysts believe “self-sufficiency” in the battery supply chain is possible in the next three to five years, largely in part to the Inflation Reduction Act’s subsidies which are expected to create an influx of investments from U.S. and South Korean companies.

• S. and European protectionist policies, combined with new battery chemistries requiring fewer critical minerals to produce, would work in tandem to decrease China’s dominance. Additionally, the report forecasted that the U.S. market share in the South Korean battery industry would rise to 55% in 2025, compared to 11% in 2021.

Global Battery Alliance calls for a “battery passport” to document battery components’ origins: With increasing governmental regulations and looming critical mineral shortages, Global Battery Alliance, a public-private partnership formed from the World Economic Forum in 2017, is advocating for the development of a “battery passport” to document the origin of battery components for car makers. The group argues legislation, including the Inflation Reduction Act in the U.S. regulating percentages of battery materials originating in North America and regulations surrounding battery sustainability and safety, necessitates the battery passport to ensure compliance. While some car makers have expressed concern about releasing confidential information and technical competitive advantages, several car companies will begin piloting the passport in the near future.

• Notably, U.S. Representative Paul Tonko (D-NY) wrote a letter to the U.S. Department of Treasury advocating for the creation of a “digital battery identifier,” modeled after the European Union’s battery passport, to ensure compliance with the IRA Clean Vehicle Tax Credit through tracking battery chemistry and performance data, material provenance, manufacturing history, and sustainability reports. The IRA requires 40% of the value of the critical minerals contained in the vehicle’s battery must be extracted or processed in a country in which the United States has a free trade agreement or be recycled in North America, with a 10% incremental increase reaching an 80% requirement in 2027. Representative Tonko argues this is an opportunity to “foster a transparent, sustainable, and just battery supply chain.”

Australia discusses tighter critical mineral supply chains and its future Critical Minerals Strategy: Critical minerals took center stage at the Australian Critical Minerals Summit in Sydney on November 25. The following are key developments surrounding the conference.

• Treasurer Jim Chalmers discussed foreign investment in Australia’s critical minerals industry, noting that “foreign investment is a good thing when it’s in our national interest.” He continued by saying, “but as investment interest grows, and as the sources of that investment interest grow, we’ll need to be more assertive about encouraging investment that clearly aligns with our national interest in the longer term.” However, he did not announce any new restrictions on foreign investments.
• Resources Minister Madeleine King also used the conference to stress the need for supply chain diversification, saying, “Australia can have a big global impact but we need to work with like-minded economies across the region. Partnerships that increase investment in critical minerals projects will bring clean energy products to market faster.” Additionally, she outlined Australia’s efforts to develop the critical minerals industry, including the development of a new Critical Minerals Strategy, which would aim to “Create economic opportunity – including for regional Australian communities; Develop new sovereign capabilities and industries – including growing our downstream processing and manufacturing capacity; Build reliable, competitive and diverse supply chains – including through international partnerships and investment; Support clean energy technologies and Ensure high environmental, social and governance credentials, including genuine partnership with First Nations Australians.” The new strategy will be developed in consultation with stakeholders to ensure the industry’s view on challenges and solutions informs Australia’s policies.
• The Queensland Government also released a consultation paper on its Queensland Resources Industry Development Plan that is open until February 24, 2023. The consultation aims to look “at changing the way exploration is run for critical minerals, including speeding up approvals,” including by “speeding up the whole tender process, which currently can take up to five-and-a-half months from seeking to awarding tenders” and “timing land releases with the industry’s typical peaks and troughs of activity during the year, so that when the government awards tenders, companies can get on the ground straight away.”

Organizations submit over 300 comments on the European Union’s Critical Raw Materials Act: 310 unique pieces of feedback were submitted during the public consultation period from September 30 to November 25 for the European Commission’s request for feedback on the Critical Raw Materials Act, which aims to increase energy independence through developing its supplies of minerals like lithium. According to European Union (EU) statistics, the top three categories of respondents were business associations (25.32%), companies (21.43%), and EU citizens (17.53%), with the majority submitted from Belgium (23%), Germany (13%), and Spain (12%).

• Notably, The Korea Business Association Europe (KBA Europe), which represents over 380 South Korean companies in Europe, submitted a comment stating that “the CRMA needs to support the principles of free trade — EU’s fundamental trade rules — and be consistent with international standards and obligations.” This comment mirrors concerns surrounding the United States’ Inflation Reduction Act, which includes incentives for domestic manufacturing and electric vehicle supply chains, which South Korea, Japan, and the EU have voiced concerns about.

United Kingdom and South Africa partnering to promote mineral development for future clean energy technologies: The United Kingdom (UK) and the Republic of South Africa agreed to collaborate on promoting responsible exploration, development, production, and processing of minerals in South Africa to develop minerals for clean energy technologies. The countries will create an open and regular dialogue between South Africa’s Department of Mineral Resources and Energy and the UK’s Department for Business, Energy, and Industrial Strategy. While the focus centers on supporting investments into the minerals mining sector, the collaboration will also foster partnerships on various clean energy technologies, including battery storage, fuel cell technology, energy efficiency, and renewable energy technologies.

• Currently, South Africa produces significant portions of the global supply of several minerals, including 60% of manganese, 75% of platinum, and 40% of palladium, with additional untapped reserve potential in vanadium, nickel, cobalt, and other rare earth elements.

South Korea and Kazakhstan sign agreement to explore and research lithium mines in Kazakhstan: On November 22, the Korea Institute of Geoscience and Mineral Resources and the Committee of Geology of the Ministry of Ecology, Geology, and Natural Resources of Kazakhstan signed an agreement to conduct joint exploration and research at two lithium sites in Kazakhstan, as well as share mining data and expand cooperation in developing of various other minerals. Currently, the South Korean supply chain relies heavily on China for lithium battery components, providing 51% of the raw lithium and 92% of the lithium-based material and component procurement for the country. With Kazakhstan’s extensive mineral reserves, Kazakhstan contacted South Korea in October, promising more efficient mineral development, which resulted in this partnership.

Ghana to require miners to sell a portion of refined gold to its central bank: To address Ghana’s decreasing foreign current reserves coupled with demand for US dollars by oil importers, the Minister for Lands and Natural Resources, Samuel A. Jinapor, issued a directive requiring all large-scale mining companies to sell 20% of their refined gold stock at their refineries to the Bank of Ghana starting in 2023, according to a November 25 Facebook post by Vice-President Mahamudu Bawumia. Additionally, while “Community Mining Schemes” and “Small Scale Gold Miners” will also have to sell gold to the bank starting in 2023, the statement did not detail what percentage of their reserves would be affected.

• A few companies in the country said they had not received a formal directive regarding the plan, and the Bank of Ghana communications officer Sam Opoku said he could neither confirm nor deny whether the order was being considered.

Australia ratified Australia-India Economic Cooperation and Trade Agreement to boost trade and reduce critical mineral reliance on China: The Australia-India Economic Cooperation and Trade Agreement, signed in April and ratified on November 22, will eliminate tariffs on more than 90% of Australian products exported to India. This agreement solidifies Australia’s cooperation with the Quadrilateral Security Dialogue and creates the opportunity for India to reduce its reliance on Chinese monopolies for critical minerals and rare earth elements. Over the next five years, trade between India and Australia is projected to reach $50 billion while allowing Australia to build its critical mineral exports. In the same week, Australia’s parliament passed a similar trade agreement, the Australia-United Kingdom Free Trade Agreement, with the UK.

• To further Australia-India cooperation, over 40 mining equipment, technology, and services companies (METS) attended the International Mining and Machinery Exhibition in Kolkata, India, from November 16 to 19 to build upon existing business endeavors to further commercial success in India’s mining sector. Australian METS are aiming to collaborate on mineral and mining development in India as the Indian government begins program liberalization to open opportunities for sustainable development in the industry. Australian METS emphasized the Australia-India Economic Cooperation and Trade Agreement will further business opportunities.
• Notably, the Indian government has contracted a consultancy to determine critical mineral assets in Australia. These results will inform India’s critical mineral development with Australian companies. Additionally, in the coming months, India plans to examine lithium opportunities in Argentina.

China to increase supervision of its lithium battery supply chain: China will increase supervision of its lithium supply chain to address lithium shortages that are hurting the profits of electric vehicle manufacture, according to the Ministry of Industry and Information Technology on November 18. The ministry aims to reduce lithium hoarding, price gouging, and unfair competition in its supply chain, which follows a comment by Zhu Huarong, chairman of state-owned automaker Chongqing Changan Automobile Co who said that the government should crack down on hoarding battery materials to lower costs and improve production and profit.

 Looking Ahead

• The American Exploration & Mining Association (AMEA) is hosting the 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.
• IQ International is hosting the 10^th Annual Asia-Pacific Deep Sea Mining Summit 2022 in Marina Bay Sands, Singapore, on December 12-13: The event will bring together a large array of solution providers, upcoming deep sea miners, members of the scientific community, and those within allied industries wanting to learn more about the opportunities within this emerging marketplace.
• Mining Conference is hosting the Mining World Congress 2022 in London, England, on December 15-16: The event will cover the future of mining, critical mineral, and geopolitics, ESG challenges in mining, and new mining projects.
• 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.
• Mexico Business Events is hosting Mexico Mining Forum 2023 in Mexico City, Mexico, on February 1-3: The event will provide in-depth information about the Mexican mining industry, government priorities, and sustainable mining management.
• Hyve are hosting Mining Indaba in Cape Town, South Africa, on February 6-9: The event joins investors, financiers, operators, suppliers, and mining & exploration companies for four days of unrivaled deal-making opportunities, industry-leading discussions, and business-changing connections.
• Beacon Events is hosting Mines and Money Miami in Miami, Florida, on February 23-24: The event will look at key global trends, collaboration strategies, and the pathway toward the energy transition.
• Expogroup is hosting Minexpo Africa 2023 in Dar es Salaam, Tanzania, on February 23-25: The event will showcase the region’s latest technology in the mining & processing of minerals, earthmoving, safety equipment, and much more.
• The Society for Mining, Metallurgy, and Exploration (SME) is hosting MINEXCHANGE 2023 SME Annual Conference & Expo in Denver, Colorado, on February 26-March 1: The event will focus on new safety strategies, exiting advances in AI, and important initiatives for a sustainable future.

 In Case you Missed It

• Reuters: Australian battery metal players key to South Korea’s EV ambition
• The Hill: United Airlines invests in battery manufacturer to boost ground operations electrification
• POLITICO: The raw truth of Europe’s raw materials
• Bloomberg: Tesla’s Lithium Lead at Risk as Rivals Make Supply Deals
• The Globe and Mail: Top federal government official casts doubt on Ontario’s Ring of Fire mining development
• Bloomberg: Hyundai Picks SK On as Battery Supplier for North America EVs
• Financial Times: Sibanye-Stillwater approves €588mn lithium project in Finland
• Business Korea: SK On, EcoPro and GEM to Set up Nickel Supply Chain in Indonesia
• Reuters: Germany’s Scholz ‘surprised’ by companies’ China dependence
• S&P Global: Australia, UK critical minerals entities eye creation of integrated battery supply chain
• Reuters: LG Chem to invest over $3 billion to build U.S. battery cathode plant
• The Australian: Forrest’s Fortescue to join rare earth race
• Bloomberg: Chinese Mining Deals Under Review as Congo Targets Windfall Profits
• CBC: Lithium extraction could be a boon for Alberta, but it comes with environmental uncertainties
• Reuters: Mazda unveils $11 bln EV spending plan, considers investing in battery production
• Alaska Public Radio: 15 Southeast tribes seek involvement as sovereign nations in Canadian mine permitting processes
• Reuters: China boosts efforts to control Western infrastructure, key industries – NATO
• CNN Philippines: New PH-US partnerships, initiatives to be launched during Harris’ visit
• The Wall Street Journal: America Can’t Depend on China for Its Electric Vehicles
• Financial Times: Carmakers try to frustrate US push to cut China from EV supply chain
• Financial Times: Livent warns of lithium roadblock to rollout of electric cars
• Euractiv: Kazakhstan tells EU: We can supply all 30 critical raw materials you need
• Northern Ontario Business: Matawa chiefs push back against U.S. military agenda in the Ring of Fire

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