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

 Recent Developments

• European Union focused on funding for critical minerals and competition with the United States: The European Union continues to focus on improving its critical minerals supply chain and countering the United States’ Inflation Reduction Act.
  • European Commissioner Thierry Breton urged European banks to increase their funding to mineral suppliers crucial to the energy transition at a roundtable with European banks. In his remarks, he discussed the bloc’s overreliance on individual countries like China and the expected “colossal” increase in demand. He concluded that “of course, we can’t only invest in Europe. That is why we have established strategic partnerships on critical raw materials with Canada, Ukraine, Namibia and Kazakhstan. And advancing in discussions with other countries.”
  • Eurometaux, an umbrella association representing the interests of the combined non-ferrous metals industry towards EU policymakers, urged the European Commission in a letter on January 24 to “be inspired by” the Inflation Reduction Act “and deliver more carrot and less stick to our industries, especially in today’s energy crisis.” The letter noted that “while discriminatory, [the Inflation Reduction Act] has shown what a proactive clean tech industrial policy could look like.” In the letter, the organization offered ideas the EU could take to improve the industry under its Anex 1: Technical description of the new and simpler EU-level finance tools for strategic industrial sectors and Anex 2: Technical description of the Improvements needed in the current Temporary Crisis Framework.
  • Lastly, German Chancellor Olaf Scholz said on January 22 he was “confident” that the EU and the U.S. could reach a trade truce “within the first quarter of this year” to prevent alleged discrimination against European companies from new subsidies in the Inflation Reduction Act, during a conference with French President Emmanuel Macron after a joint Franco-German Cabinet meeting in Paris. However, Swedish Trade Minister Johan Forssell said he was glad about Chancellor Scholz’s remarks but that “it’s important to be realistic. As long as there is no deal, there is no deal.” When asked about a proper solution, Minister Forssell said, “well, of course, the best solution will be for the U.S. not to have this kind of legislation or at least have a more flexible one.”

• Senator Joe Manchin introduces legislation to implement the Inflation Reduction Act 30D electric vehicle tax credits: Senator Joe Manchin (D-WV) introduced the American Vehicle Security Act (AVSA) on January 25, which, if passed, would instruct the Department of the Treasury to immediately implement the 30D new consumer vehicle tax credits according to the Inflation Reduction Act by requiring compliance with battery and battery material sourcing requirements as of January 1, 2023. Sen. Manchin noted that “it is unacceptable that the U.S. Treasury has failed to issue updated guidance for the 30D electric vehicle tax credits and continues to make the full $7,500 credits available without meeting all of the clear requirements included in the Inflation Reduction Act.” He continued that the “IRA and the EV tax credits must be implemented according to the Congressional intent to ensure the United States, as the superpower of the world, is not beholden to countries that don’t share our values.” According to an aide, the bill would also require consumers who received the tax credit so far in 2023 to show compliance with the new requirements or return the money.
  • The Department of Treasury was supposed to issue guidance for vehicle tax credits in the Inflation Reduction Act by December 31, 2022, but delayed the guidance until March 2023.
  • Additionally, the United Auto Workers, International Association of Machinists and Aerospace Workers, United Steelworkers, the Sierra Club, and Public Citizen strongly urged President Joe Biden in a letter “to ensure that the IRA is implemented as intended, without delays or technical changes that erode its promises to U.S. workers and climate goals.”

• Mexican government seeking conciliation with foreign lithium mining firm in Sanora: On January 24, Mexican President Andres Manuel Lopez Obrador announced the government was hoping to reach an agreement with a mining company currently exploring lithium reserves in Sanora. While he did not name a company, experts are speculating the government is referring to Chinese firm Ganfeng Lithium, which is developing a major lithium project in the state. While President Lopez Obrador emphasized mineral rights belong to the state, the government is seeking to reach agreements with companies currently violating Mexican law rather than pursuing legal options.
  • Related: Two years since the passage of the United States-Mexico-Canada Agreement (USMCA), politics have driven the three signatories back to a crossroads. In Chapter 2 of our Latin America Insights Report, we present a view by our Strategic Communications team in Mexico to advocate for a private sector-led effort to align regional actions to international trends, such as closing the supply chain gap on critical mineral resources.

• New report outlines how to decarbonize the U.S. economy by decreasing car dependence and the size of EV batteries and maximizing lithium recycling: The Climate and Community Project, in conjunction with the University of California Davis researchers, released a new report titled “Achieving Zero Emissions with More Mobility and Less Mining,” recommending ways to decarbonize America’s economy, emphasizing the need to decrease car dependence and the size of EV batteries, and maximizing lithium recycling to reduce the demand for new lithium mining. The report underscores that the most effective way to reduce emissions and combat climate change is for the U.S. to reorganize its transportation system, which is the largest emitter of greenhouse gases, by shifting policies to prioritize public transit. While the researchers recognize the current appeal of replacing gas-powered vehicles with electric vehicles, they claim it will not quickly lower America’s overall emissions. The report also includes possible scenarios to decarbonize personal transportation in the United States.
  • Additionally, they note that current U.S. EV demand projections for 2050 would require a three-fold increase in lithium production, resulting in a significant increase in large-scale mining, which the reports notes “entails social and environmental harm, in many cases irreversibly damaging landscapes without the consent of affected communities.”
  • While lithium and other battery metals will be essential to meet many zero-emission targets around the world, the report maintains that the positive supply chain effects of reducing car reliance on mining would ensure lithium remains affordable, as well as reduces the potential of environmental degradation and injustice.

• The United States and its partners look abroad for critical minerals: The United States and its allies in the Mineral Security Partnership are looking to back as many as 16 overseas projects to mine, refine, and recycle minerals needed for EVs, batteries, and other renewable technology, according to Under Secretary of State for Economic Growth, Energy, and the Environment Jose Fernandez. He also said the partnership is looking carefully at projects based on their environmental, social, and governance standards that companies and governments will need to abide by. Specifically, the partnership has whittled the number of projects down from 170 submitted by the partnership to 16. Under Secretary Fernandez noted that “if you look at rare earths and critical minerals, the U.S. produces very little. We’ve got to be able to secure supplies, and the [Minerals Security Partnership] is intended to be one of the means through which we do that.”
  • That being said, the House Foreign Affairs Committee, which is controlled by Republicans and oversees the State Department, announced it is planning a hearing to examine the partnership. Specifically, Foreign Affairs Committee Chair, Rep. Michael McCaul (R-TX-10), said the committee will increase oversight “to secure the critical mineral supply chain from malign actors such as the Chinese Communist Party this Congress,” including the possible acquisition of facilities by China once they are built. The committee also plans to probe the State Department’s MOU signed with the Congo and Zambia, which are major producers of cobalt and copper, on December 13, 2022, during the Africa Leaders Summit. The MOU aims to strengthen the EV battery supply chain in the countries by offering technical assistance, cooperating on feasibility studies, and exploring opportunities in the sector for U.S. companies.
  • General Laura Richardson, Commander of U.S. Southern Command, spoke at an Atlantic Council event on January 19 about strategic threats in Latin America and the Caribbean. During her remarks, she noted that Chinese investment in the “lithium triangle” of Bolivia, Chile, and Argentina and copper in Peru pose an issue. Additionally, she said that the United States needs to “step up our game” and that the country is “not investing in the region as we could be or as should be.”

• Analysts forecast challenges for electric vehicle and battery supply chain throughout 2023: According to a new report titled “Electric vehicles and battery supply chain: bumpy road ahead in 2023?” published by Wood Mackenzie on January 18, the changes in the electric battery industry, including China ending its EV incentive program, OEMs’ desire to create greater security around raw materials and battery supplies, and predicted instability in the nickel market on the LME, could present challenges throughout 2023. To begin, China met its goal of 25% EV market perforation, and as a result, officially ended its decade-long EV incentive program earlier than expected, potentially leading to complications for smaller manufacturers. With OEMs still cognizant of surging raw battery material prices in 2022, it is expected they will take safer positions in the market. Wood Makenzie also expects large European and North American OEMs to implement increasing targets for decarbonizing their supply chains. Lastly, major European and North American OEMs will push further to decarbonize their supply chains.

• Mining institute urging Argentina to annul new law preferencing state companies in mineral exploration: On January 17, the La Rioja government published Law N°10.608 that declared lithium and its derivatives as strategic natural resources, resulting in state companies receiving priority in exploration and development. Concurrently with this passage, the government suspended all exploration permits and concessions previously granted to private companies for 120 days. As a result, the Argentine Institute of Mining Law (IADEM) claimed the provincial government overstepped its power, specifying that the law conflicts with Argentina’s existing Mining Code, which states that decisions regarding mineral endowments are delegated by the provinces to the national government. At the root, the Institute believes La Rioja does not have the right to essentially monopolize the mining industry.

 Looking Ahead

• Mexico Business Events is hosting Mexico Mining Forum 2023 in Mexico City, Mexico, on February 1-2: The event will provide in-depth information about the Mexican mining industry, government priorities, and sustainable mining management.
• Hyve is 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.
• BMO Capital Markets is hosting the 32^nd Global Metals, Mining, & Critical Minerals Conference in Hollywood, Florida, on February 26- March 1: This event will include discussions on China’s place in the mining ecosystem, the energy metals transition and adoption of electric vehicles, the strength of the precious metals environment, and ESG and its implications for metals and mining companies and investors.
• 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.
• Ecommerce Gateway Pakistan is hosting Miners, Minerals, & Metals Asia in Karachi, Pakistan, on March 10-12: This event will serve as an ideal B2B platform for entrepreneurs, CEO’s, consultants, senior government officials, decision makers and trade delegations to congregate, brainstorm, showcase and forge meaningful business partnerships.
• The Association of Equipment Manufactures is hosting CONEXPO-CON/AGG in Las Vegas, Nevada, on March 14-18: This event is North America’s largest construction trade show where 1,800 equipment manufacturers meet to learn, talk, compare, and see the technology and equipment that’s going to transform your business.
• The Financial Times is hosting Commodities Global Summit in London, United Kingdom, on March 20-22. Now in its 12th year, the Summit has established itself as an influential gathering of senior commodity executives, traders and financiers.
• The Swiss Mining Institute is hosting a conference in Zurich, Switzerland, on March 21-22: This invite-only event of selected asset managers, fund managers, and other professional investors from all over the world will provide top quality, independent perspectives from experts within the resources sector together with presentations from 80 selected mining companies.
• Mining Journal and Aspermont are hosting Mining Journal Select 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.
• 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 US market.

 In Case you Missed It

• Business Korea: Korea Depends More Heavily on Battery Raw Materials from China
• Georgia Recorder: Georgia GOP lawmaker pushes bill to protect ‘vital and precious’ Okefenokee from new mining proposals
• Mining.com: British Columbia spent $13.6 billion on mineral exploration in 2022, says Premier
• Reuters: Honda, GS Yuasa agree to collaborate in lithium-ion batteries
• Boston Review: Does Our Sustainable Future Start in the Mine?
• The Verge: Sony and Honda’s EV goes where the Apple Car never did
• E&E News: zero-emission vehicle sales hit record high
• VOA: Taliban Arrest Chinese Nationals for Allegedly Smuggling Afghan Lithium
• Bloomberg: How Europe Needs Freight Trains to Cross Russia From China
• South China Morning Post: China-Australia relations: Huawei, ‘sensitive’ tech, critical minerals key test for long-term trade ties
• The Washington Post: The U.S. imports uranium from Russia. What if sanctions end that?
• Maine Public Radio: Canadian company resubmits zoning petition for northern Maine mine
• Nikkei Asia: Canada can help cut reliance on China for critical metals: minister
• Euronews: Swedish mining company to use green hydrogen as it looks to reduce CO2 emissions
• Mining Weekly: Mintek aiming to establish presence in Saudi Arabia
• Reuters: Bolivia taps Chinese battery giant CATL to help develop lithium riches
• Mexico News Daily: US $200 million investment in lithium-ion battery production in Nuevo León
• Cornell Chronicle: Cornell to help boost US supply of critical energy minerals

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