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

 Recent Developments

Seven nations agree to form Sustainable Critical Minerals Alliance: Canada, Australia, France, Germany, Japan, the UK, and the U.S. launched the Sustainable Critical Minerals Alliance at COP 15 to ensure sustainable and responsible mining practices are at the forefront of development goals and projects. Member states will voluntarily prioritize sustainable mining practices by employing a nature-positive approach, supporting local and indigenous communities, reducing greenhouse gas emissions, restoring ecosystems, building circular economies, and fostering ethical corporate practices, according to a press release from the Government of Canada. The U.S. also reiterated its commitment to sustainable mining, with Council on Environmental Quality Chair Brenda Mallory and National Economic Council Director Brian Deese saying that the Biden administration is committed “to sustainable mining standards that reflect our commitment to fighting climate change while protecting and respecting workers, human rights, communities, and the environment.”

• Additionally, with many of the domestic critical mineral development projects projected to impact Native American communities, representatives from the Council on Environmental Quality and National Economic Council committed to working with Native American Tribes to ensure meaningful and responsible development.
• Additionally, the United States is aiming to fund roughly 12 mineral projects around the world to combat rising battery prices from supply and demand discrepancies.

U.S. Senator cautioned the U.S. Treasury Department from lenient interpretations of Inflation Reduction Act Electric Vehicle Tax Credits: Senator Joe Manchin (D-WV) advocated against the U.S. Treasury Department using a more lenient interpretation of the Inflation Reduction Act’s (IRA) domestic sourcing requirements for electric vehicles in a letter on December 12. While South Korean automakers are urging for rental cars and ride-share vehicles to be considered “commercial vehicles” under the IRA provisions, Senator Manchin argues this would depart from congressional intent and reduce domestic investment in critical minerals, as the bill intended. Electric vehicles, designated as commercial vehicles rather than consumer vehicles, have less stringent domestic critical mineral sourcing requirements to remain eligible for the $7,500 tax credit. Moreover, many European leaders are arguing that the IRA provisions are protectionist and disproportionately disadvantage European industries, which U.S. Trade Representative Katherine Tai noted that the U.S. is taking very seriously and using “a whole-of-government process” to address their concerns.

• Additionally, the U.S. Senate voted on amending the National Defense Authorization Act of 2023 (NDAA) with Sen. Manchin’s Building American Energy Security Act of 2022, which would overhaul energy permitting in the U.S., on December 15. The vote resulted in a 47-47 tie, falling short of the 60 votes needed to amend the NDAA. While a group of Republicans voted for the bill and a group of Democrats voted against it, Senator Kevin Cramer (R-ND), who voted against the bill, said, “we can get there with some compromises,” and Shelley Moore Capito (R-WV) voiced that the permitting reform will be revisited next year.

Bolivia set to develop lithium mining using foreign company(s): The Bolivian government will decide which company(s) will develop the country’s lithium reserves in the Uyuni, Coipasa, and Pastos Grandes salt flats this month. Currently, six foreign firms, including four from China, one from the U.S., and one from Russia, are contending for the opportunity to use direct lithium extraction (DLE) in the country. However, due to uncertainty surrounding this new technology, community activists and researchers have expressed concerns that the Bolivian government is rushing to extract lithium, risking the safety of local communities and the environment. The final decision was supposed to be made in June but was delayed six months to December.

• Currently, Bolivian law requires the state to maintain sole ownership of the primary production of lithium; therefore, by outsourcing to foreign company(s), Bolivia could risk violating this law. However, Carlos Humberto Ramos Mamani, President of the country’s lithium company, Yacimientos de Litio Bolivianos Corporación, told the Financial Times that any contract would “respect our laws and seek the maximum benefit for the Bolivian people.”
• Additionally, the Civic Committee of Potosí, which represents communities around the Uyuni salt flat, proposed increasing the 3% mining royalties to 11% when the price reaches $10,000 per metric ton and 20% at $20,000 per metric ton.

Canada will streamline critical mineral permitting: As a part of the Canadian Critical Minerals Strategy released on December 9, the Canadian government will streamline the critical mineral permitting process, including by helping companies apply for permits and offering federal support through the Critical Minerals Centre of Excellence to boost production. The government hopes this new process will result in a “one project, one assessment” system, helping companies more efficiently and predictably work with the Canadian government. Notably, Canada allocated $2.8 billion in federal funding to implement its critical mineral strategy over the next eight years. While Canada produces 31 critical minerals, the strategy will prioritize the development of lithium, graphite, nickel, coal, copper, and rare earth elements—overall, aiming to assist in building Canada’s battery ecosystem for electric vehicles.

• The strategy allocates $79.2 million to identify mineral deposits, a 30% tax rebate for companies exploring critical mineral reserves in Canada, $47.7 million for targeted upstream critical mineral research and design through Canadian labs, $144 million to further research and develop critical minerals and deploy technologies to support the upstream and midstream critical minerals value chain, $1.5 billion to support projects, prioritizing advanced manufacturing, procession, and recycling applications, $40 million to support reviewing and permitting projects, and $21.5 million to support the Critical Minerals Centre of Excellence to develop policies and programs supportive of the industry.
• Critics of the Critical Minerals Strategy claim it lacks a clear action plan outlining goals, timelines, or accountability structures. Furthermore, these analysts note that to become a global leader in the critical minerals industry, as well as decrease reliance on China, Canada will have to work closely with its allies, something not detailed in the strategy.

EU agrees on new law creating a circular economy for batteries: The European Parliament and Council provisionally agreed on the European Green Deal to make batteries in the EU market more sustainable and circular, building upon a December 2020 proposal from the European Commission. The new law would prioritize sustainability throughout the entire battery lifecycle by implementing new regulations for the production, recycling, and repurposing of batteries. Starting in 2024, the EU will enforce sustainability requirements on carbon footprint, recycled content, performance, and durability, gradually increasing targets over time for portable batteries to reach 63% in 2027 and 73% in 2030 and batteries from light-duty transportation to reach 51% in 2028 and 61% in 2031. All collected batteries would be recycled, specifically for those containing copper, cobalt, lithium, nickel, and lead. In the coming months, the European Parliament and the Council will formally adopt the new Regulations, with additional regulatory frameworks expected between 2024 to 2028.

• Additionally, the European Commission is considering implementing self-sufficiency regulations of up to 30% for raw mineral development, according to a senior EU official. Recognizing European dependency on oil and gas, European Commission President Ursula von der Leyen emphasized the need to develop critical minerals within the EU. The EU is expected to release draft legislation detailing these regulations in the first quarter of 2023.

Japan and Congo to cooperate on rare metal development: Japanese Industry Minister Yasutoshi Nishimura and Democratic Republic of Congo (DRC) Mining Minister Antoinette N’Samba Kalambayi agreed on December 9 to co-operate on “sustainable, mutually beneficial” efforts to develop a stable supply of rare metals. With Congo was responsible for 74% of the global supply of cobalt in 2021, Japan and the DRC are hopeful this partnership will ensure a stable procurement of various rare metals found in Africa. Notably, numerous African governments are calling for stronger trade ties with the U.S. following IRA EV tax incentives for U.S. automakers, which will be a focus of the U.S.-Africa summit in Washington that started on December 13 and will focus on topics including security, health, food security, and climate change.

EU and Chile update trade deal to expand lithium partnership: On December 9, the EU and Chile updated their free trade deal, providing the EU access to the lithium reserves in Chile’s Atacama salt flats. The new deal is a “leap forward” for the EU’s sustainability requirements, according to EU Commissioner for Trade Valdis Dombrovskis and represents a trade victory for the EU as it diversifies its clean energy and raw materials supply chains away from Russia and China. Under the updated trade deal, Chile will remove tariffs on all imports except sugar and facilitate EU investment, while Chile will secure more favorable access for its exports and professional services. It will also allow Chile to sell its lithium or copper at lower prices for EU companies that use Chilean processing and notes that Chile will restrict using its “dual pricing policy,” which reserves up to 25 percent of all raw mineral production for local companies at reduced rates.

• The deal is expected to be signed in autumn 2023 after final legal checks have been completed. It will enter interim force once ratified by both parties, including the EU government and the European parliament. The deal can only then be fully implemented once all 27 EU nitinol parliaments approve it.

 Looking Ahead

• 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 of Saudi Arabia 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.
• Australia’s Mining Monthly and Mining Magazine is hosting Future of Mining Sydney in Sydney, Australia, on February 20-21: This event will provide opportunities to learn from, challenge and debate with the region’s pioneering innovators to address new solutions and shape strategies that advance the mining industry’s operational goals.
• 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.
• The Prospectors & Developers Association of Canada is hosting PDAC in Toronto, Canada, on March 5-8: This event will attract up to 30,000 attendees from over 130+ countries to participate in educational programming, networking events, and outstanding business opportunities in the mining industry.

 In Case you Missed It

• The Wall Street Journal: BRV Capital Seeks $1 Billion to Back Electric Vehicle Industry Suppliers
• Mining.com: Albemarle to build $180m US lithium research centre
• Bloomberg: GM Will Go to Unusual Lengths to Secure EV Battery Minerals
• The Hill: Biden announces $2.5B loan for electric vehicle battery hubs in three states
• Yicai: China’s Anshan Heavy Duty to Build USD3.7 Billion Lithium Materials, EV Battery Hub
• S&P Global: China’s leading battery maker Sunwoda invests $2.4 bil in upstream lithium projects
• CPR News: Colorado’s updated EV plan boosts incentives but avoids California-style ban on gas vehicles
• The Northern Miner: Will Indigenous-led impact assessments help or hinder mine project approvals?
• S&P Global: Path to net-zero: Miners seek partners to achieve renewables goals
• E&E News: Haaland decries mining near Okefenokee as ‘unacceptable’
• Ireland’s Department of the Environment, Climate and Communications: Minister Ryan publishes the government’s new Policy Statement on Mineral Exploration and Mining
• Australian Resources & Investment: Five key mining industry themes for 2023
• Washington Examiner: US seeks to boost jobs, security, and green energy with Central American investment

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