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

 Recent Developments

• Australian Prime Minister voices hesitation towards Chinese investment in lithium development and highlights domestic industry: Australian Prime Minister Anthony Albanese said the Australian government’s priority should be developing battery minerals domestically, noting the importance of having a secure supply of lithium and nickel. With tensions between the two countries easing in January, China has expressed interest in working with Australia to further develop lithium for batteries and electric cars. Over the past few years, Australia has been working with its allies, including the United States, to decrease dependency on China for critical minerals and rare earth elements.
  • As a part of Prime Minister Albanese’s development plan, he urged the parliament to pass the National Reconstruction Fund, providing $15 billion to develop domestic manufacturing capabilities, including investment renewables and low emissions technologies, defense, and transportation. Overall, the Australian Prime Minister and government believe national security is directly linked to Australia’s critical mineral and metal mining industry.

• United States lawmakers calling for Department of Energy transparency regarding grant allocations: On February 21, Sen. John Barrasso (R-WY), ranking member of the Senate Energy and Natural Resources Committee, sent a letter to the U.S. Department of Energy urging for more transparency around grant allocations for battery manufacturing under the Infrastructure, Investment, and Jobs Act. Sen. Barrasso claimed, “It is clear the Department has misled shareholders investing in companies selected for [infrastructure law] awards.” He continued, “Accordingly, it is imperative the Department adopts a more transparent approach in its communication of its award selections to the public.”

• Uganda to establish state-owned mineral company: On February 21, Uganda’s Minister of Energy and Mineral Development, Dr. Ruth Nankabirwa Ssentamu, said the government created an inter-ministerial committee to start a Uganda National Mineral Company (UNMC) responsible for managing its commercial interests in strategic minerals. Specifically, UNMC will take an equity stake of up to 15% in all medium- and large-scale mining operations and will have a seat on the board of directors as a shareholder.
  • This development is part of the Mining and Minerals Act, 2022, which the country passed last year to reform the industry. Specifically, it requires a competitive mineral license bidding process for current projects and retains the first come, first served model for new projects. Dr. Ruth Nankabirwa Ssentamu added that applications would be filed online to improve efficiency and transparency.

• Finland amends its mining laws to make the industry more sustainable: Finland’s parliament passed amendments to its mining law on February 20 that aim to strengthen citizen influence, economic prospects, and environmental protection. Specifically, the amendments require the municipality approval for mining permits, require extended landowner consent, improve public disclosure and engagement, introduce a reserve fee, and the responsible closure of mines, among others. The amendments, initially proposed on September 8, are expected to be effective on March 1, 2023.
  • While stricter regulations and higher fees are expected to increase the quality of mining operators, it is possible they could increase the time it takes to permit a mine.
  • Currently, Finland has over 40 operational mines producing nickel, zinc, lithium, cobalt, and gold and ten smelters and steel mills and has a similar geological make up to Ontario, Quebec, and Western Australia.
  • Finland ranked 13^th in the Fraser Institute’s Annual Survey Of Mining Companies 2021, noting, “Finland’s permitting process provides predictability and reduces costs for companies.”

• United Nations gathers to discuss marine ecosystems: The United Nations will meet from February 20 to March 3 to discuss the conservation and sustainable use of marine ecosystems that lay outside of national boundaries. Formally called the Intergovernmental Conference on Marine Biodiversity of Areas Beyond National Jurisdiction, this conference follows negotiations in the fall that failed to create a final treaty. Notably, the conference will discuss how marine protected areas will be developed and by whom, how institutions should assess the environmental impacts of commercial activities, including deep-sea mining, and who has the power to enforce rules. In December 2022, the United Nations Biodiversity Conference agreed to protect 30% of land and water considered important for biodiversity by 2030.
  • Related: A group of scientists from the National Oceanography Center embarked on a month-long research expedition to understand the impacts of deep-sea mining polymetallic nodules. Called the Seabed Mining And Resilience To EXperimental impact, the project “aims to provide the critical scientific understanding and evidence- base to reduce the risks of this industrial development, taking advantage of new and unique opportunities to solve these problems in a single programme.” The current expedition will go from Costa Rica to the Clarion Clipperton Zone and will last from February 5 to March 26, 2023.

• Report outlines current state of U.S. battery ecosystem and recommendations to support the industry: The report titled Building a Robust and Resilient U.S. Lithium Battery Supply Chain was published by Li-Bridge, a public-private partnership created by the U.S. Department of Energy, managed by Argonne National Laboratory, and represents the U.S. battery ecosystem, on February 17. The report identifies five key facts:
  • “Lithium-based energy storage will be one of the key technologies of the 21st century;”
  • “Certain economic competitors of the United States recognized the importance of lithium battery technology nearly 20 years ago;”
  • “U.S. companies today play only a minor role in the domestic and international markets for lithium battery production;”
  • “The lack of a substantial lithium battery supply chain in the United States and the lack of secure access to energy materials pose serious threats to U.S. national and economic security;”
  • “Building a robust and sustainable lithium battery manufacturing base in the United States will require addressing a number of challenges that have depressed investment in the domestic lithium battery supply chain to date.”
  • To address these facts, the report lays out 26 recommended actions to bolster America’s lithium battery industry, including a buying consortium for raw energy materials, a system of shared pilot lines to speed the commercialization of new battery technologies, significant additional investment in battery industry workforce training, and permitting reform.

• Mexico’s President orders Energy Ministry to carry out lithium reserve nationalization: On February 18, Mexico’s President, Andres Manuel Lopez Obrador, signed a decree ordering the country’s Energy Ministry, Secretaría de Energía, “to take the actions necessary to carry out” the nationalization process. Additionally, the decree declares over 230,000 hectares in the state of Sonora as a mining zone called Li-MX 1. During his speech at an event in Sonora, he said, “What we are doing now, keeping the proportions and in another time, is to nationalize lithium so that it cannot be exploited by foreigners, neither from Russia, nor from China, nor from the United States. Oil and lithium belong to the nation, they belong to the people of Mexico.”
  • While Mexico is estimated to have significant lithium deposits, the country is reviewing the lithium concessions of all foreign companies and requiring the national company to lead all projects, casting doubt over the lithium industry’s future.
  • This decree follows the government nationalizing its lithium resources in April 2022 and creating Litio para México, a state-owned lithium company, in August 2022.

• Canada funds junior mining companies to boost early critical mineral exploration: On February 16, the Ontario government announced it “invested $5.8 million to help junior mining companies explore for critical minerals”. This is the latest round of funding under the government’s Ontario Junior Exploration Program, which aims to “help increase and expand mineral exploration, growth and job creation in the province, particularly in northern and Indigenous communities.” Ontario plans to invest $12 million over four years, and since the program launched in 2021, the program has funded 32 mining companies to explore minerals including nickel, copper, cobalt, and lithium.

• Canadian miner replaces Chinese investor after government order: Chengze Lithium International Ltd. has officially divested its 19.3.5% stake in Lithium Chile Inc. following a November 2, 2022 order from the Canadian government. In a February 16 press release, Lithium Chile said Gator Capital Ltd. had taken over the equity stake for roughly $34.5 million. Michelle DeCecco, Chief Operating Officer, said, “I think it’s short-sighted for our government to take a stance on who can invest in our company when our assets are 100-per-cent owned and operated outside of our country.” She continued that “We have a lot to learn from Chinese technology, but we also have a lot to learn about friendship … eliminating these friendships or going back in time can be a critical mistake for Canadians, for our mining companies and investment into our future.”
  • The government’s order required three Chinese companies to divest their investments in Canada’s critical minerals, citing threats to Canada’s “national security and our critical minerals supply chains.” China pushed back on the order, saying it was used to break international commerce and market rules. TMX Group Inc., which runs the Toronto Stock exchange (TSX), said that Ottawa’s decision to order three Chinese companies to divest their stake created “concern and uncertainty” among miners listed on the TSX.

 Looking Ahead

• 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 the Prospectors & Developers Association of Canada (PDAC) convention 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.
• 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.
• AME Mocambiue 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.

 In Case you Missed It

• Financial Times: Chinese lithium prices fall 30% as demand for electric vehicles weakens
• Nevada Current: Three tribes file new lawsuit challenging Thacker Pass lithium mine
• Nikkei Asia: Sumitomo to bypass China in EV rare-earth supply chains
• Financial Times: Teck Resources set for $11.5bn coal spin-off to focus on copper
• Wall Street Journal: Lithium Industry Looks to Australia for Refining, Not Just Mining
• POLITICO Pro: Brussels seeks to woo Washington into setting up raw materials club
• Bloomberg: Ola Plans to Build World’s Largest Electric Vehicle Hub in India
• Reuters: Australia’s Magnis in deal with Tesla to supply graphite for electric vehicle batteries
• Bloomberg: Tesla Is Considering a Bid for Battery Metals Miner
• Reuters: China’s CATL offers EV battery discounts in China -sources
• Institute for Energy Research: Dash for Africa’s Minerals to Fuel the Biden Green Energy Transition
• Australian Financial Review: Chinese mining giant in secret Africa lithium grab
• Bloomberg: China to Scrutinize Ford-CATL EV Battery Deal to Ensure Core Technology Isn’t Shared
• Mongabay: Preliminary exploration of lithium in India offers early hope, but a long journey remains ahead
• Wilson Center: S. Governance on Critical Minerals
• KITCO: Piedmont Lithium inks equity investment and binding offtake agreements with LG Chem
• E&E News: Manchin, Barrasso float bill to jump-start domestic uranium

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