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

 Recent Developments

• U.S. Treasury Department to release clean vehicle tax credit guidance next week: On March 22, the Treasury Department’s Assistant Secretary for Tax Policy, Lily Batchelder, told reporters the agency will release tax guidance next week on material and component requirements that will determine which EVs qualify for tax credits up to $7,500 under the Inflation Reduction Act.
  • The long-awaited tax guidance has been scrutinized by the European Union, South Korea, and other stakeholders who worry the tax credit breaks trade rules. Additionally, U.S. President Joe Biden met with EU President von der Leyen on March 10 and announced they would begin cooperation on a targeted critical minerals agreement to allow minerals extracted or processed in the EU to count for the tax credit. Sen. Joe Manchin (D-WV), among other lawmakers, has expressed concern over delaying the guidance and that the Biden administration may interpret the IRA not in line with congressional intent.
  • The Treasury Department was supposed to release the material and component tax guidance last year but announced in late December it would issue it in March. Additionally, it released a document on the anticipated direction of the guidance in January.

• U.S. President Joe Biden visits Canada: U.S. President Joe Biden met with Canadian Prime Minister Justin Trudeau on March 23, and they are expected to discuss bilateral critical mineral cooperation and development. With analysts highlighting the gaps in supply and demand for critical minerals, American officials described the opportunity for cooperation as a transformative moment for the countries. Maryscott Greenwood, Head of the Canadian American Business Council, underscored, “[On critical minerals], Canada is poised to really make a gigantic difference, for itself, for the U.S., for the world. But if it doesn’t get there for 15 or 20 years, it’s going to be surpassed by other jurisdictions that can move more definitively and more quickly. Like Australia.”
  • The critical minerals industry expects a critical mineral-related announcement following President Biden and Prime Minister Trudeau’s talks.

• U.S. President Joe Biden designates two National Monuments, drawing criticism from Nevada Governor: On March 21, President Joe Biden designated two new National Monuments in Nevada and Texas to protect, conserve, and restore America’s historically and scientifically important sites. Specifically, he established the Avi Kwa Ame National Monument (roughly 506,814 acres) in Nevada, which is important to multiple tribes, and the Castner Range National Monument (6,672 acres) in El Paso, Texas, which was a former training and testing site for the U.S. Army from World War II to 1966.
  • Nevada Governor Joe Lombardo (R) criticized the Nevada monument designation, saying the Biden administration did not consult with the Governor and that “Upon learning that the President was considering unilateral action, I reached out to the White House to raise several concerns, citing the potential for terminal disruption of rare earth mineral mining projects and long-planned, bipartisan economic development efforts,” he continued. “While I’m still waiting for a response, I’m not surprised.”

• Argentina’s lithium exports hit record highs in 2022: On March 21, Argentina’s government announced lithium mining exports reached 10-year record highs in 2022, reaching $3.86 billion. Compared to 2021, lithium exports rose 234% and accounted for close to 20% of all mining shipments. Additionally, during the first two months this year, lithium exports have doubled compared to 2022 levels, reaching $58 million in February. The government forecasts $6 billion in mining revenues this year as demand for battery metals grows due to the clean energy transition.
  • Since 2020, Argentina’s mining industry has received $11.3 billion in investments, including $5.1 billion for lithium and $4.9 billion for copper.

• Mining industry group is wary of the clean energy future: On March 21, the Society for Mining, Metallurgy, and Exploration (SME) warned against the long-term feasibility of the clean energy transition due to new data highlighting challenges in the U.S. meeting domestic critical mineral demand. Currently, SME expects the demand for critical minerals to rise sixfold by 2040, increasing by three billion tons. Specifically, nickel, cobalt, and lithium are projected to increase by 70-90% from the current supply. It will take an additional 359 mines to supply the forecasted demand increases; however, SME underscored that current permitting delays throughout the U.S., creating approval periods of ten years, will stall the clean energy transition in the next five years. While the U.S. currently has the safest mining standards in the world, 50% of U.S. lithium and 61% of U.S. cobalt is derived from foreign sources. SME Executive Director and CEO Dave Kanagy explained, “We’re at a critical point in time to advance on the green energy transition as it relates to our net-zero goals, and so it’s essential that the U.S. takes action to support domestic mining and simplify the process to opening new mines.”
  • Without increased supply, SME predicts lithium used in EV batteries will rise over 2.5 times. Overall, without federal policy and regulatory changes, climate targets, including California’s Zero-Emission Vehicle Program, is “more difficult, if not impossible.”

• California governor visits “Lithium Valley” and stresses its importance: On March 20, California Governor Gavin Newsom (D) visited “Lithium Valley,” another name for Imperial Valley, which contains a significant amount of lithium underground near the Salton Sea, and stressed how the region will be crucial “to move away from fossil fuels” and develop “a hub for global innovation while ensuring this transformation benefits communities.” During his trip, he visited a project in the area and met with local stakeholders to discuss how any development puts the communities first.
  • According to the California Energy Commission, “Lithium Valley” holds enough lithium to meet the United States’ projected lithium demand and 40% of the world’s demand.

• United Kingdom signs critical mineral supply agreement with Kazakhstan: On March 18, UK Foreign Secretary James Cleverly met with President Kassym-Jomart Tokayev to discuss political and economic cooperation. Specifically, the UK will help Kazakhstan develop oil export routes that bypass Russia, like the Middle Corridor, and the two parties announced they signed an MOU on critical minerals but did not provide any details.
  • Kazakhstan is responsible for almost half the world’s uranium output and has large deposits of rare earth minerals that the West has historically sourced from China and Russia. While Kazakhstan and Russia have had close ties since the dissolution of the Soviet Union, Kazakhstan refused to support Russia’s invasion of Ukraine or recognize its annexation of Ukrainian land.
  • This development follows the two parties engaging in a strategic dialogue in December 2022 and looking forward to the further development of the UK-Kazakh Strategic Partnership. Kazakhstan is the UK’s primary trading partner in Central Asia.

• European Commission publishes Critical Raw Materials Act: On March 16, the European Commission published its proposed Critical Raw Materials Act, which is “a comprehensive set of actions to ensure the EU’s access to a secure, diversified, affordable and sustainable supply of critical raw materials.” Specifically, the act sets clear benchmarks for domestic capacities along the strategic raw material supply chain and to diversify EU supply by 2030: 10% for extraction, 40% for processing, and 15% for recycling, and requires not more than 65% of the EU’s consumption of each strategic material can come from one third-party country. The act also identifies 15 individual minerals and seven rare earth elements used in magnets as strategic raw materials, which are of high strategic importance to the European Union based on current supply chain conditions and uses.
  • If you’d like to learn more about the Critical Raw Materials Act and the Net-Zero Act below, please reach out to the FTI Consulting Critical Minerals Newsletter Team.
  • The EU also released its proposed Net-Zero Act, which supports its target of reducing greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels, achieving its 2050 climate neutrality target, and ensuring that it has access to a secure and sustainable supply of net-zero technologies and contribute to the creation of quality jobs. Additionally, it aims to reach at least 40% of the annual deployment needs for strategic net-zero technologies manufactured in the EU by 2030 and ensure the free movement of net-zero technologies placed on the Single Market.
  • The Association of European Automotive and Industrial Battery Manufacturers (Eurobat) applauded the acts, saying, “They represent a positive step towards a European industrial plan for cleantech, critical for providing much needed clarity for investors and operators along the clean energy value chains.”

• Australia releases four new Mineral Potential Maps and new data: On March 16, the Australian government released four new Mineral Potential Maps on sediment with zinc-lead mineral systems to “facilitate exploration in underexplored regions of the country and will play a vital role in ensuring Australia’s base metal production and exports continue to meet growing global demand.” The maps and data were collected with the support of the Geological Survey of Western Australia and are part of the A$225 million Exploring for the Future program, which has been gathering precompetitive data about Australia’s geology since 2016 and helps all stakeholders.
  • Notably, 80% of Australia is still unexplored, and more mineral potential assessments on sediment with copper are being developed by Geoscience Australia over the coming months.
  • Related: Resources Minister Madeleine King told delegates during the Paydirt Battery Minerals Conference that the federal government is hoping to release its new Critical Minerals Strategy in the first half of 2023. The strategy is expected to support the country’s mineral supply chain, related industries, and opportunities for regional and First Nations communities. Additionally, it will highlight how Australia’s minerals can play a role in helping it and its partners reach their emission reduction while meeting strict ESG standards. Also during the conference, Western Australian Minister for Mines and Petroleum Bill Johnston said the Western Australian government is investing A$22.5 million to support a predictable pathway and provide assistance for green energy projects like critical mineral projects.

• Protestors in Bolivia halt development of key lithium processing plant: Protestors led by the Civic Committee of Potosi in Llipi, Bolivia, are blocking the entrance to a lithium processing plant and demanding legislative guarantees for increased benefits for local communities, as well as larger royalties for battery metals in the region. Currently, protestors are threatening an indefinite strike, with local protest leader Yamile Cruz claiming they “want the development of our department of Potosí, and of our region, because as a region we have given our resources in the past and we are going to continue giving our lithium.” The government is worried these protests threatened lithium advancement in the area, including a recent deal with Chinese battery maker CATL. However, Potosi Governor Jhonny Mamani promised authorities would expand their efforts “so that this mobilization is lifted.” The mining industry underscored there is only a 20-year window to advance resource industrialization in the country.

• U.S. Deputy Secretary of Energy visited Brazil, Chile, and Argentina to deepen energy and climate collaboration: From March 13 to 17, U.S. Deputy Secretary of Energy David Turk visited Brazil, Chile, and Argentina to deepen energy and climate collaboration, including the Western Hemisphere being a primary exporter of clean energy fuels and technology, improving supply chains in the energy transition, and collaborating on climate goals.
  • In Brazil, Secretary of Energy Planning and Transition Thiago Barral and Secretary Turk discussed opportunities to enhance various clean energy technologies, as well as decarbonization management.
  • In Chile, Minister of Energy Diego Pardow and Secretary Turk outlined Chile’s Net Zero World progress, as well as ways to expand multilateral cooperation in critical minerals to create a just energy transition. They then heard from 30 companies developing and processing Argentina’s critical minerals.
  • In Argentina, Secretary Turk’s meeting with Secretary of Energy Flavia Royón and Secretary of Mining Fernanda Avila underscored opportunities for collaboration in reducing greenhouse gas emissions, as well as expanding renewable energy.
  • RELATED: Concurrently, Under Secretary of State for Economic Growth, Energy, and the Environment, Jose Fernandez traveled to Columbia, Brazil, and Panama from March 17-23 to discuss supply chain resilience, the environment, and economic opportunities. Under Secretary Fernandez’s discussions in Brazil will expand upon President Lula’s February visit to Washington to work closely on critical minerals and energy.

• Alaskan lawmakers are urging British Columbia to halt development on upriver mining: On March 9, several members of Alaska’s State Legislature sent a letter to U.S. Secretary of State Anthony Blinken urging the immediate halt on mining permits and exploration in British Columbia until an international agreement on mining in transboundary watersheds is reached after meeting with Canada’s Acting Deputy Minister, Laurel Nash from the Ministry of Environmental Protection, and Andrew Rollo, Acting Assistant Deputy Minister of Mines Health, Safety and Enforcement, regarding concerns about the impact of upriver mining on Alaska.
  • Over a hundred Alaskan tribes, municipalities, commercial and sport-fishing businesses and organizations, and thousands of Alaskans have written letters and passed resolutions asking for the Boundary Waters Treaty to be invoked.
  • Many Alaska Native Tribes and Alaskan communities have expressed continued concerns regarding downstream mining pollution from British Columbia for several decades, claiming current MOUs on the U.S. and Canada working together to preserve transboundary watersheds have not yielded effective change.
  • Members of Alaska’s State Legislatures believe if British Columbia consulted with the Southeast Alaska Indigenous Transboundary Commission and its member tribes on permitting new mines, it would solve many of the current challenges and environmental degradation occurring in Alaska.

 Looking Ahead

• Mining Journal and Aspermont are hosting Mining Journal Select London in London, United Kingdom, on March 27-28: This event brings together a selection of major miners and companies with rated development projects to present to an audience of over 400 institutional and retail investors.
• SAFE and the Electrification Coalition are hosting the SAFE Summit 2023 in Washington, DC, on March 28-29: This event will convene top government officials, business leaders, and other stakeholders from the United States and allied nations to address the challenges to achieving secure and reliable supply chains in the transportation and energy sectors.
• Solar Media is hosting Energy Storage USA 2023 in Austin, Texas, on March 28-29: This event will provide the perfect platform to connect key industry players across the entire value chain in a buzzing U.S. market.
• Economic Impact is hosting the 8^th Annual Sustainability Week in London, United Kingdom, on March 29-31: This event aims to empower businesses to accelerate action on sustainability.
• Fisa and GL Events are hosting Expomin in Santiago, Chile, on April 24-27: This event is the  largest mining show in Latin America and serves as a space to promote the transfer of knowledge, experiences, and technologies that contribute to innovation and increase the productivity of mining processes.
• Beacon Events is hosting Mines and Money London in London, United Kingdom, on April 25-26: This event is Europe’s premier mining investment event, connecting miners with money, and investors with opportunity.
• The Organisation for Economic Co-operation and Development is hosting its 2023 Forum on Responsible Mineral Supply Chains in Paris France, on April 25-28: This event will reflect longstanding and emerging priorities in fostering responsible mineral supply chains, with sessions spanning new conflict risks, corruption and environmental risks in mineral supply chains, drivers of responsible trade and systemic issues like regulatory developments and taking responsible finance to scale. A key theme will be on leveraging due diligence to foster synergies between the objectives of a responsible and reliable supply of minerals critical to the energy transition.
• AME Mocambique and AMETrade are hosting Mozambique International Mining & Energy Conference and Exhibition in Maputo, Mozambique, on April 26-27: This event will focus on key developments, policies, and projects in Mozambique’s extractive industries, making it an important platform for stakeholder networking and showcasing the opportunities in these sectors.
• Canadian Institute of Mining is hosting CIMTL 23 Convention and Exhibition in Montreal, Canada, on April 30-May 3: This event features an extensive program consisting of expert-led short courses, three full days of technical presentations on insightful topics, a complete student/young leaders’ program, daily social networking opportunities, and the CIM/Caterpillar Awards Ceremony. It also includes the premier mining marketplace for business with over 450 exhibitors at the EXPO.
• StoneX is hosting Energy & Metals Outlook: Managing Risk in a Greening Economy in New York, New York, on May 3-5: This event will give exposure to deep-domain experts in major sectors across the industrial supply chain, where attendees will gain fundamental and strategic analysis of the outlooks for the changing shape of the metals and energy industries as we move toward net zero emissions, including content presented by our carbon solutions team.
• Society for Mining, Metallurgy & Exploration is hosting SME’s 8th Current Trends in Mining Finance Conference in New York, New York, on May 8-11: The conference will bring together many subject matter experts and interested stakeholders to discuss the outlook, trends, and non-technical and technical issues that affect capital raising in the global mining industry and how management and investors can employ best practices and technology to anticipate, track, manage and reduce the risks associated with mining projects.
• Automotive Logistics is hosting Finished Vehicle Logistics North America in Waterfront Beach Resort, California, on May 9-11: This event will cover the most important issues for vehicle logistics through a program of hard-hitting panels and sessions, interactive workshops, and innovator showcases.
• The European Union and EIT RawMineral e.V. are hosting the Raw Mineral Summit in Brussels, Belgium, on May 15-17: This event  will feature leading players in the international raw materials industry, innovators, educators, researchers, prominent figures from the European Commission, NGOs, and more. Key discussions will be on the major innovations, policy initiatives, challenges, and opportunities facing the raw materials sector will take place.
• Mining Center Mexico is hosting Discoveries 2023 Mining Conference in Sinaloa, Mexico, on May 30-June 1: This event includes over 50 talks covering topics ranging from the latest geological discoveries; new technologies applied to mining and exploration; social, legal, and political issues affecting the industry; and the challenges and obstacles confronted and overcome on the way to production.

 In Case you Missed It

• Mining Review Africa: China’s rise to lithium supremacy in Zimbabwe
• E&E News: Markey lays down progressive marker on permitting reform
• The Wall Street Journal: Joe Biden’s Push to Counter China Steers EV Investments to Canada
• Bloomberg: Lithium Prices in China Halve in Just Four Months
• Diálogo Chino: Q&A: ‘We won’t see a 100% Mexican lithium process for a decade’
• Bloomberg: Electric Vehicle Battery Makers Test a Future Without Lithium
• U.S. Chamber of Commerce: How the U.S. and India Can Strengthen Critical Supply Chains
• fDi Intelligence: Canada’s EV ambitions wake up to flagging mining investment
• The New York Times: Falling Lithium Prices Are Making Electric Cars More Affordable
• Financial Post: Mining lobby warns Ottawa against taking miners for granted in push for more aid
• Mining.com: America’s timeline for development of domestic battery metal supply chain may be unrealistic – research
• The Wall Street Journal: Europe Moves to Revive Mining to Cut Reliance on China
• Reuters: Volkswagen to invest in mines in bid to become global battery supplier
• DW: EU green-tech homeshoring plans face resistance in Spain
• Bloomberg: Kganyago Warns South Africa Against Reliance on Mining Windfalls
• Financial Times: Bentley chief says UK failing to support electric vehicle transition
• Bloomberg: Billions Pumped Into Korea Battery City With China In its Sights

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