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

 Recent Developments

Permitting reform excluded from United States defense funding bill text: The Senate and House Armed Service Committees released the text for R. 7776, the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 (NDAA), which will fund the United States military in 2023. Notably, Sen. Joe Manchin’s (D-WV) permitting reform bill, the Energy Independence and Security Act of 2022, was excluded from the bill due to opposition from the Congressional Progressive Caucus and House Republicans despite support from democratic leadership, including President Biden, who remains committed to passing permitting reform. That being said, Sen. Manchin released an updated bill text and urged his colleagues to pass the bill as an amendment The defense bill passed the House on December 8, and lawmakers hope it will reach President Joe Biden’s desk to be signed into law before the end of the year. The NDAA includes the following provisions related to critical minerals:

• It allocates over $1 billion to acquire materials for the National Defense Stockpile that are determined to be strategic and critical materials required to meet the defense, industrial, and essential civilian needs of the United States from 2023 through 2032. These materials include neodymium oxide, praseodymium oxide, neodymium iron boron (NdFeB) magnet block, titanium, energetic materials, iso-molded graphite, cadmium zinc telluride, among others, and additional materials identified in the Strategic and Critical Materials Stock Piling Act.
• It requires the Secretary of Defense to submit a report to the Senate and House Armed Services Committees on replacing non-tactical vehicles with electric, advanced-biofuel-powered, and hydrogen-powered vehicles, including “an assessment of the current and projected supply chain shortfalls, including critical minerals, for electric vehicles and combustion engine vehicles.”
• It requires the Secretary of Defense to submit a report to relevant congressional committees detailing the Department’s “diplomatic efforts to ensure United States access to critical minerals acquired from outside of the United States that are used to manufacture clean energy technologies and collaboration with other parts of the Federal Government to build a robust supply chain for critical minerals necessary to manufacture clean energy technologies.”

United States Department of Energy establishes uranium consortium: The U.S. Department of Energy (DOE) established the High-Assay, Low-Enriched Uranium (HALEU) Consortium on December 7 to help inform the department’s activities to secure a domestic supply of HALEU needed to develop and deploy advanced nuclear reactors in the United States. The consortium is open to any U.S. entity, association, and government organization involved in the nuclear fuel cycle or organizations whose facilities are located in ally or partner nations designed by the DOE.

• If interested in joining, entities should email [email protected] and “should explain their involvement in the nuclear fuel cycle and interest in partnering with DOE, along with the name(s) of your representative, email, and phone number,” according to the DOE’s press release.

Indigenous Tribes in United States and Canada are lobbying against mine pollution in Canada: Five Indigenous Tribes in the U.S. and Canada are demanding action be taken to address toxic waste from Canadian mining pollution. Councilor for the Upper Similkameen Indian Band of British Columbia argued that while Canadian Prime Minister Justin Trudeau expresses the goal of leading the sustainable transition in the mining industry, he is not implementing changes that would benefit the communities impacted. Tribes are meeting with the Canadian Embassy, the U.S. Environmental Protection Agency, and the U.S. Departments of the Interior and State on December 13 and 14 to ask for realistic measures to protect communities from toxins and clean transboundary waters through enforcing the Transboundary Waters Treaty of 1909.

• With 75% of the world’s mining companies located in Canada, according to the Canadian Government, a disproportionate amount of the industry’s pollution impacts Canadian and transboundary communities. Additionally, mining companies are expected to increase their spending by 15 times and Canada plans to double the number of mines in British Columbia to meet demand.
• Additionally, Saskatchewan Premier Scott Moe led a discussion on December 5 on ways to strengthen and develop the critical minerals industry in North America, with 36 of the 50 S.-identified critical minerals present in the providence. The U.S. is Saskatchewan’s largest trading partner, and the providence believes critical minerals will play a major role in future economic growth.
• This discussion follows an announcement from the U.S. Departments of the Interior and Agriculture at the 2022 White House Tribal Nations Summit that they are implementing “new regulatory and policy recommendations designed to protect Tribal interests and resources from the impacts of mining, increase Tribal engagement in mining proposals, and promote well-designed mining activity that accounts for climate change and current standards and technologies.”

Korea and Vietnam to bolster critical mineral supply chain cooperation: Korea’s Ministry of Trade, Industry, and Energy announced Minister Lee Chang-yang signed three agreements with Vietnam’s Industry and Trade Minister Nguyen Hong Dien during a ministerial meeting in Seoul on December 5 following a summit between the countries’ presidents commemorating the 30th anniversary of bilateral diplomatic ties. The agreement on critical minerals aims to increase their partnership in exploring and developing critical minerals in Vietnam while promoting investment, stabilizing supply, and managing the global supply chains of the minerals.

Biden Administration acknowledges European Union concerns over Electric Vehicle Tax Credits: The U.S.-EU Trade and Technology Council (TTC) held its third meeting on December 5 to discuss topics including the Inflation Reduction Act’s EV tax credits. European Commission President Ursula von der Leyen emphasized the legislation could “lead to unfair competition, could close markets, and fragment the very same critical supply chains that have already been tested by COVID-19.” Following the meeting, the EU remains hopeful that constructive changes will be implemented.

• Before the meeting on December 4, European Commission president Ursula von der Leyen continued to raise concerns over the tax credits. She stated the EU must “adjust our own rules to make it easier for public investments,” and the block must reassess whether “new and additional funding at the EU level” was required to counteract the Inflation Reduction Act. She continued that “the new assertive industrial policy of our competitors requires a structural answer.”
• Additionally, South Korea’s Foreign Ministry submitted additional comments on December 2 to the U.S. government, asking for a wider acceptance of what it considers a “commercial clean vehicle” and “vehicle refueling property,” which can benefit from federal tax breaks.

Australia releases discussion paper on its Critical Minerals Strategy 2023: The Australian government opened its Critical Minerals Strategy 2023 discussion paper on December 1 for comments. The comment period, which closes February 3, seeks input on the country’s Critical Minerals Strategy 2023 from industry and community stakeholders, including traditional owners. The strategy aims to add value to Australia’s mineral resources, grow its domestic down processing and manufacturing industries, and support decarbonization.

China to launch industrial silicon futures and options contracts on new exchange: The China Securities Regulatory Commission approved the launch of industrial silicon futures and options contracts on the Guangzhou Futures Exchange, which was set up in 2021 to focus on new energy materials like lithium and rare earth elements. The commission believes the contract will improve the pricing mechanism, enhance risk management companies, and promote China’s low-carbon development. While the exchange has not announced when trading will start, it is believed to be the first industry silicon contract – a key material used in electronics and the automotive sector.

United States Environmental Protection Agency proposes new biofuel policy, including credits for electric vehicles: The U.S. Environmental Protection Agency released a rule on proposed renewable fuel standards for 2023, 2024, and 2025 on November 30. In addition to increasing biofuel volume targets, the rule proposes a program that allows renewable electricity generated from renewable fuel and used in light-duty electric vehicles to be eligible to generate e Renewable Identification Number (eRINs) where one eRIN is equivalent to 6.5 kWh. The rule estimates 600 million eRINs would be generated in 2024 and 1.2 billion in 2025 by parties like electric vehicle manufactures.

• One RIN was worth between $1.65 and $1.70 on December 1.

Saudi Arabia plans to become a leader in the sustainable production of minerals and metals: At the Mines and Money London Conference, Saudi Minister of Industry and Mineral Resources, His Excellency Khalid Al-Mudaifer, said Saudi Arabia will “become a leader in the sustainable production of metals, for the benefit of the net-zero transition,” recognizing critical minerals key role to the energy transition and decarbonization. The Ministry highlighted Saudi Arabia’s numerous advancements in the mining industry, including increasing precious and base metals development potential, stabilizing aluminum markets, being a world leader in phosphate reserves, and building integrated EV manufacturing complexes.

• Notably, he claimed increased resource nationalism, combined with COVID-related supply chain challenges, created the conditions for a 350% price increase in mineral costs globally. As a result, the Minister advocated for increased supply chain resilience, as the World Bank reports demand for minerals, including graphite, lithium, and cobalt, will experience a five-fold increase by 2050. By 2030, Saudi Arabia plans to attract $170 billion in mining sector investments by 2030 to diversify the economy, expand battery metal production, and decrease reliance on oil.

United States and European Union discuss climate-based tariffs on Chinese steel and aluminum: The U.S. and EU are in the initial phase of negotiating a climate-based tariff on Chinese steel and aluminum. The new agreement would build upon an agreement last year that removed EU tariffs and aimed to counter the “ flood of cheap steel by other countries, including the People’s Republic of China.” A draft agreement with specifics isn’t likely until later in 2023 at the earliest.

• While the new agreement would likely further strain the relationship between China and the U.S., it is a positive sign for the U.S. and EU, who are discussing controversial EV tax credits in the Inflation Reduction Act. China’s Foreign Ministry spokeswoman Mao Ning responded to the development, voicing concern it would violate the World Trade Organization rules and that China would “take all necessary measures to safeguard our legitimate rights and interests.”

New report highlights inconsistent Foreign Investment Review Board decisions are hindering Australia’s critical mineral development: A new report from the State of Play, Minerals Research Institute of Western Australia, and CSIRO emphasized that inconsistent decision-making by the Foreign Investment Review Board (FIRB), alongside a lack of export centric investments hinders development opportunities in Western Australia. Additionally, the report highlighted the lack of transparency surrounding foreign investment decisions, notably regarding Chinese critical mineral investments. The report outlines 13 recommendations through three lenses: geo-strategy, financing, and economic development, including improving direct flight accessibility to West Australia, pursuing cooperate arrangements with foreign investors, streamlining the FIRB process for critical minerals investment proposals, improving international competitive through tax subsidies, and investing in “Strategic Industrial Areas.”

Several mining companies adopt new ESG and transparency reporting framework: Twelve mining companies are implementing Engineers Without Borders Canada’s Mining Local Procurement Reporting Mechanism (LPRM). Developed through the Mining Shared Value initiative of Engineers Without Borders and commissioned with the support of Germany’s Federal Ministry for Economic Cooperation and Development, the LPRM includes 22 disclosures to promote and standardize information transparency on mineral procurement, company spending, and policies, as well as supply chain due diligence efforts. Currently, 34 mines across 19 countries will utilize the LPRM framework to make these disclosures.

 Looking Ahead

• 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

• Mining Weekly: Aussie miners to adjust portfolios in 2023 – KPMG
• Reuters: Chinese M&A interest in Australia picks up as political ties thaw
• Financial Post: Canadian lithium miner ordered to break with Chinese investor finds replacement in Australia
• Reuters: Chile to sign modernization of bilateral agreement with the EU next week
• Reuters: GRAPHIC-Lithium price to retreat from record as electric car sales slow
• Northern Ontario Business: Canada must have ‘control’ of its critical minerals supply: Trudeau
• CNN Business: Indonesia wants to make an OPEC for this coveted metal
• NPR: There’s a lithium mining boom, but it’s not a jobs bonanza
• POLITICO – E&E News: ‘Buy America’ timeline threatens to delay EV charger network
• CNBC: Ford CEO says 65% of U.S. dealers agree to sell EVs under company’s investment programs
• Financial Times: Brazilian mine to begin lithium production in 2023 as demand soars
• Green Car Congress: Blue Ribbon Commission on Lithium Extraction in California submits final report to state legislature; findings and recommendations
• org: Researchers suggest the climate crisis requires international minerals agreement
• CNBC: Ford claims No. 2 spot in EVs behind Tesla – but gap remains wide
• The Globe and Mail: Ottawa approves new Ontario critical minerals mine in bid to claw back Russian dominance in palladium
• Reuters: Yellen says appropriate for U.S. firms to assess China geopolitical risks
• Reuters: Canada says war, climate concerns show need for supply chain shift
• Reuters: BHP’s CEO expects Chinese economic growth to continue
• Mining.com: Zimbabwe signs agreement with Tsingshan to set up lithium operations

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