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

 Recent Developments

• European Commission releases anticipated new green deal: The European Commission released its Communication for “A Green Deal Industrial Plan for the Net-Zero Age” on February 1st. The Communication is based on four pillars:  a predictable and simplified regulatory environment; faster access to sufficient funding; skills; and open trade for resilient supply chains. Despite the new plan, not everyone in the EU is excited about it, including German Finance Minister Christian Lindner, who said on January 20 that he was “not in favor of more subsidies and excessive state aid [and] I’m not convinced that we need any kind of further funding instrument.” Ultimately, the Communication’s future will be determined over the coming months.
  • Under the first pillar, the Commission will introduce the Net-Zero Industry Act, which aims to strengthen the industrial manufacturing of key technologies by simplifying the regulatory framework, identifying goals for industrial capacity by 2030; reducing the length and enhancing the predictability of permitting processes by setting time limits for stages of the permitting process; introducing a ´one-stop-shop´ as a single point of contact for the permitting process; and defining simple and operational criteria for identifying net-zero supply chain projects of strategic interest.
  • Next, it will introduce the Critical Raw Materials Act, which aims to secure the supply of critical materials in the European Union by strengthening international engagement and facilitating the extraction, processing, and recycling of critical minerals to reduce the EU’s dependence on a concentrated number of other countries while ensuring high environmental standards, supporting the economy, and creating jobs. While the Act has not been released, it will include “raw materials which are of particular strategic relevance for our twin transition and defence needs, including economic importance, supply concentration, strategic applications, and forecasted supply gaps.”
  • The second pillar aims to address the strong pressure EU industries are under “because subsidies abroad are unleveling the playing field” by increasing access to funding for the net-zero industry so it can be extended and accelerated.
  • The third pillar focuses on developing the green and digital skilled workforce at all levels that will be in demand as the industry develops exponentially.
  • Lastly, the fourth pillar aims to increase global cooperation and make trade work for the clean transition. Notably, it includes establishing a Critical Raw Materials Club, which aims to “deliver on a secure, sustainable and affordable global supply of raw materials essential to our green and digital transition with a competitive and diversified industrial base. Building on existing international initiatives, the Club will develop principles to bring together raw material ’consumers’ and resource-rich countries and foster co-operation to allow resource-rich developing countries to move up the value chain.”

• Germany looks to improve material cooperation with South America: German Chancellor Olaf Scholz traveled to Argentina on January 28, Chile on January 29, and Brazil on February 1, where he met with the countries’ heads of state and discussed increasing industry cooperation, specifically around minerals.
  • During his trip to Argentina, the countries signed an agreement to collaborate on clean energy, technology and innovation, mining training, and investment in Chile, where Germany is looking to expand its access to the country’s lithium resources. While in Buenos Aires, Chancellor Scholz discussed that despite China’s control of the mineral processing industry, Chile and Argentina are two examples of countries that have significant mineral extraction and could develop their processing to support their economy instead. Additionally, the two leaders called for a renegotiation and approval of the EU-Mercosur bloc free-trade agreement to further improve bilateral trade relations.
  • In Chile, Chancellor Scholz met with Chilean President Gabriel Boric and focused on the country’s lithium mining industry, in which China is heavily invested. Notably, he said that Germany wants “to help Chile on the way to a sustainable mining sector,” following a new agreement between Aurubis and Codelco. During the press conference, President Boric said that he wants “to create a national lithium company through various treaty mechanisms,” noting that “Chile has the right and the duty to participate in this industry.”
  • During his visit to Brazil, German Development Minister Svenja Schulze pledged roughly $215 million to help Brazil protect the Amazon rainforest by protecting indigenous tribes, protecting the forest, and enabling sustainable forest uses.

• Republicans call on the Biden administration to prioritize domestic minerals after it cancels multiple mines: Over the past week, Republicans have criticized the Biden administration’s plans to stop two mines in the United States while looking overseas for new mining, refining, and recycling projects. This past week’s decisions are the latest development in what appears to be a struggle between upholding environmental standards and developing the minerals supported and needed by the United States to transition to clean energy technologies. Specifically, Rep. August Pfluger (R-TX-11), Oversight Committee Chairman James Comer (R-KY-01), and House Committee on Natural Resources Chairman Bruce Westerman (R-AR-04) called on the Biden Administration to prioritize domestic minerals production instead of relying on foreign countries. They also critiqued the Minerals Security Partnership and called for a briefing due to insufficient information on its goals and strategy.
  • On January 30, the Environmental Protection Agency issued a Final Determination under its Clean Water Act Section 404(c) that noted discharge of dredged or fill materials associated with developing the Pebble Mine would “have unacceptable adverse effects on anadromous fishery areas” in Alaska’s Bristol Bay watershed. The decision is being celebrated by Alaskan tribes, which have fought the project development for over a decade on the grounds of protecting the environment. However, Senate Environment and Public Works ranking member Shelley Moore Capito (R-WV) said, “The EPA summarily denying an application before it is submitted sets a dangerous precedent for future economic development and infrastructure project.” Sen. Lisa Murkowski (R-AK) and Sen. Dan Sullivan voiced their opposition to the mine but noted that the “preemptive veto” raised serious legal questions and “has the potential to establish a very troubling precedent for resource development” of state land.
  • On January 26, the Department of the Interior issued an Order withdrawing roughly 225,500 acres of land in northern Minnesota’s Boundary Waters from mineral exploration for 20 years “to protect and preserve the fragile and vital social and natural resources, ecological integrity, and wilderness values in” multiple watersheds. While there are no active mineral leases on the land, Twin Metals Minnesota LLC, a subsidiary of the Chilean mining company Antofagasta PLC, plans to develop a copper mine in the area that would process 20,000 tons of ore per day. In response to the order, Twin Metals said it was “deeply disappointed” in the decision and that its project “plays a critical role in” meeting America’s clean energy goals, creating jobs, and strengthening the country’s national security. Twin Metals concluded it remains “committed to enforcing Twin Metals’ rights.” Rep. Pete Stauber (R-MN-08), Chairman of the Energy and Mineral Resources Subcommittee within the House Natural Resources Committee and whose district covers the area, called the decision “an attack on our way of life.” Additionally, critics claim this decision directly opposes the Biden administration’s clean energy goals, while Secretary of the Interior Deb Halaand maintains this decision aligns with the environmental standards of the Biden administration.

• New report shows transition to electric vehicles is not keeping pace with projections: A report published by the International Council on Clean Transportation with Energy Innovation Policy & Technology LLC on January 31 details how at current consumer and production levels, the United States is forecasted to miss its 2030 emission reduction targets under the Paris Climate Accord. While the Inflation Reduction Act is expected to increase EV adoption from 48% to 61% for light-duty vehicles and 39% to 48% for heavy-duty vehicles, ultimately, emissions reductions will fall short of its 2030 goals. In addition to federal government incentives, state governments could have a substantial impact on the transition, with California’s Advanced Clean Cars II regulations increasing electric vehicle adoption across states that implement the new regulations. However, even with governmental incentives, restrictions such as a lack of charging facilities and EV production could constrain overall growth in the electric vehicle transition.
  • Overall, “IRA incentives will put EV sales in the fast lane, but strong national and state vehicle standards are needed to overcome inertia and transform this market,” said Sara Baldwin, director of electrification at Energy Innovation and an author of the report.

• Norway is considering opening offshore deep-sea mining: A study released on January 27 by the Norwegian Petroleum Directorate found a “substantial” amount of critical minerals and metals, including copper, magnesium, niobium, cobalt, and rare earth elements, on the seabed off the coast of Norway. Specifically, the Norwegian Petroleum Directorate found 38 million tonnes of copper, 45 million tonnes of zinc, and 1 million tonnes of cobalt, among other minerals, on the seabed. As a result, the Nordic country, a leading oil and gas exporter, announced it is considering opening its offshore area to deep-sea mining as early as 2023, which requires parliament’s approval.
  • Critics voiced their opposition to deep-sea mining due to environmental concerns and are calling for Norway to postpone seabed mineral exploration pending further studies to understand the impact.

• Elon Musk meets with Biden administration officials on electric vehicles: Elon Musk met with John Podesta, a Senior Advisor to the President for Clean Energy Innovation and Implementation, and Mitch Landrieu, Coordinator in the White House for the Infrastructure Investment and Jobs Act, on January 27 to discuss his and the Biden administration’s shared goals around electrification and how the Bipartisan Infrastructure Law and Inflation Reduction Act can advance electric vehicle production and charging as well as the broader cause of electrification,” according to a White House spokesperson.
  • While tensions between President Biden and Elon Musk are well documented, analysts are hopeful the partnership between Tesla and the U.S. government will advance electric vehicle market penetration as the Inflation Reduction Act EV tax credits become available to consumers.

• Ecuador declares illegal mining a national security threat: On January 26, Ecuador’s government declared illegal mining a national security threat, noting its connections to money laundering and arms trafficking. President Guillermo Lasso said he is looking into actions to decrease this illegal activity, specifically in the Amazon, which has large reserves of gold and copper. As a result, the government plans to back international companies that have legal concessions, as well as utilize the armed forces to enforce these measures. Many believe this declaration is in response to Ecuador’s largest indigenous organizations raising concerns about mining project development in the country near ancestral indigenous areas.
  • Between January and November of 2022, Ecuador’s mining exports increased 34%, or $2.52 billion, according to the central bank.

 Looking Ahead

• 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.
• Northern Miner is hosting the Global Mining Symposium virtually on February 22: This event provides the opportunity for companies to define themselves as leading edge in the critical minerals industry.
• 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
• 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.

 In Case you Missed It

• Reuters: Wolfspeed to build $3-bln EV chip plant in Germany, subsidy approval expected in months
• CBC: Rare earth minerals could help in climate change fight, but mining raises environmental concerns: expert
• S&P Global: EV sales momentum to face challenges in 2023, but long-term expectations unaffected
• Reuters: Squeezed mining companies face growth dilemma
• Financial Times: General Motors invests $650mn in US lithium mine to secure EV battery materials
• Stanford University: Stanford scientists illuminate barrier to next-generation battery that charges very quickly
• com: European Metals soars as Czech lithium project labelled “strategic”
• Bloomberg: Lithium’s Historic Rally Fuels Record Profits for China’s Miners
• Reuters: To get to net-zero, we will need to make mining ‘nature-positive’, says mining council chief
• South Dakota Public Broadcasting: House approves lithium tax
• Mining Technology: European mining eyes uncertain future
• Bloomberg: Hyundai Unveils $8.5 Billion Spending Plan Amid EV Push
• Reuters: Japan’s Suzuki to invest $35 bln through 2030 in EVs
• Reuters: Eramet targets 10,000 tonnes of lithium per year in French project

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