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

 Recent Developments

• South Korea announces measures to reduce secure its critical minerals supply chain: South Korea’s Ministry of Trade, Industry and Energy (MOTIE) announced seven measures on February 28 to secure a reliable supply of critical minerals, following up on President Yoon Suk-yeol’s order to establish a critical minerals supply chain centering around MOTIE. Additionally, South Korea aims to reduce dependence on “a select few countries” for critical minerals like lithium and graphite from 80% to 50% by 2030 while expanding critical minerals recycling from 2% to 20%.
  • Specifically, the country selected 33 critical minerals relevant to economic security, of which ten – lithium, nickel, cobalt, manganese, graphite, cerium, lanthanum, neodymium, dysprosium, and terbium – are needed for high-tech industries like semiconductors. Additionally, the measures will map critical mineral mines, increase mineral stockpiles, work with other countries, conduct preemptive project feasibility studies, provide loans and insurance to establish local subsidiaries for mine development, establish a circular economy, and will establish a legal basis to support the industry.

• Biden administration publishes first CHIPS for America funding opportunity: The Biden administration published its first funding opportunity through the U.S. Department of Commerce’s National Institute of Standards and Technology on February 28. The opportunity, which represents a major step toward the implementation of the CHIPS and Science Act, aims to fund the construction, expansion, or modernization of commercial facilities used to produce semiconductors. In its Application and Evaluation Fact Sheet, the U.S. Department of Commerce notes that the awards will come in the form of direct funding, federal loans, and/or federal guarantees of third-party loans. Applications must address six priority areas: economic and national security, commercial viability, financial strength, project technical feasibility and readiness, workforce development, and broader impacts. Statements of Interest will be accepted on a rolling basis starting February 28, 2023.
  • The U.S. Department of Commerce also released its “Vision for Success,” which builds upon Secretary of Commerce Raimondo’s shared speech at Georgetown University’s School of Foreign Service. The Department aims to reach the following goals by the end of the decade: (1) make the U.S. home to at least two, new large-scale clusters of leading-edge logic chip fabs, (2) make the U.S. home to multiple, high-volume advanced packaging facilities, (3) produce high-volume leading-edge memory chips, and (4) increase production capacity for current-generation and mature-node chips, especially for critical domestic industries. Read more about these goals in the Vision for Success paper here.
  • The S. Department of Commerce confirmed it will also “be releasing a funding opportunity for semiconductor materials and equipment facilities in the late spring, and one for research and development facilities in the fall.”

• Australia blocks Chinese investment on national security grounds: Australia’s Treasurer Jim Chalmers confirmed the government blocked Northern Minerals Ltd’s largest shareholder, Yuxiao Fund, from increasing its investment from 9.92% to 19.9% on February 15 on advice from the Foreign Investment Review Board. The decision, which was based on national security, according to Northern Minerals, was “consistent with other decisions taken by other governments,” according to the Treasurer. This decision follows a comment from Mr. Chalmers on the critical minerals supply chain in November saying, “We’ll need to be more assertive about encouraging investment that clearly aligns with our national interest in the longer term.”
  • While the exact impacts of the decision on Chinese investment in Australia will be seen in the future, Chinese investments in ‘critical’ industries like minerals in Australia, Canada, and the United States have come under increased scrutiny as the nations try to develop robust and secure supply chains.
  • Additionally, Australia’s Resources Minister Madeleine King said the government and industry need to work together to increase investment in Australia’s critical mineral sector. She noted that “Australia’s critical minerals will also play an important role in the security of our international partners in our shared, net zero future. This will be done by establishing new sources of supply and diversifying supply chains in concentrated markets.” She noted the country has “to work with like-minded economies to invest in our critical minerals development and address supply chain challenges.”

• Biden administration waives requirements under defense law to address mineral shortages: On February 27, President Joe Biden issued a presidential waiver of some statutory requirements under the Defense Production Act (DPA) to enable the U.S. Department of Defense (DOD) to “more aggressively build the resiliency of America’s defense industrial base and secure its supply chains,” according to the DOD. Specifically, the waiver includes “defense organic industrial base supply chains critical to the DOD as well as critical supply chains for electronics, kinetic capabilities, castings and forgings, minerals and materials, and power and energy storage. This authority also affords the ability to invest in strategic areas that enable the industrial base such as workforce development.”
  • President Biden first invoked the DPA last March to ensure “a robust, resilient, sustainable, and environmentally responsible domestic industrial base” needed to meet the country’s clean energy goals and essential to its national security.
  • Additionally, the Worcester Polytechnic Institute and the U.S. Army Combat Capabilities Development Command Army Research Laboratory launched the Materials Recovery Technologies for Defense Supply Resiliency initiative on February 22 to “ensure critical supplies are available when needed, limit the reliance on foreign resources in manufacturing, and provide processes that could be used at U.S. military operations around the world,” supporting President Biden’s 2021 directive to the DoD to identify risks in the supply chain for critical minerals and materials used to build a variety of military devices.

• UK launches program focused on rare earths: The UK’s Department for Business and Trade announced on February 27 it will launch the CLIMATES program with £15 million “to develop work on rare earths by researchers and businesses across the country.” Specifically, the new program will support innovations in rare earths recycling, research and development, international engagement, and activities to identify and support the skills that will be needed in the future. Lastly, the program will try to unlock private investment in projects that can help develop a resilient rare earths supply chain.
  • It follows the publication of the UK’s critical minerals strategy in July 2022. The strategy is set to be refreshed and published later in 2023.

• S. Department of Energy announces $375 million conditional loan to Li-Cycle: The U.S. Department of Energy’s Loan Program Office (LPO) offered Li-Cycle U.S. Holdings, Inc. a $375 million conditional loan on February 27 under its Advanced Technology Vehicles Manufacturing Loan Program (ATVM) “to help finance the construction of the first-of-its-kind lithium-ion battery resource recovery facility in North America.” The facility near Rochester, New York, is expected to fulfill the battery needs of roughly 203,000 EVs per year and will help the United States’ electrification efforts to lower emissions, strengthen its EV supply chain, and create high-paying jobs. The facility will create more than 1,000 construction jobs and 270 permanent jobs once operational.
  • According to the Department of Energy, the facility would reduce gasoline consumption by roughly 80.6 million gallons per year, or more than 716,000 tons of CO2 emissions annually.
  • Li-Cycle held a live stream event on February 27 about the loan with U.S. Senate Majority Leader Charles E. Schumer, Congressman Joseph Morelle, state officials, and Li-Cycle leadership team members, including Li-Cycle’s co-founder and CEO, Ajay Kochhar.

• Chinese officials investigate illegal mining in Yichun: Investigators from China’s Ministries of Natural Resources, Industry and Information Technology, and Public Security were in Yichun, known as “Asia’s lithium capital,” to investigate if mining companies extracted lithium without the required permits or with expired licenses. This development follows an announcement from the Yichun local government on February 24 that it was going to crack down on illegal activity in the lithium battery industry. Notably, all lithium beneficiation plants in the region temporally closed, shutting down roughly 10% of the global lithium supply. According to a report from Chinese news outlet Cailian on February 27, some lithium mines with compliant mining licenses resumed production.
  • This is the second time an investigation has shut down part of the supply chain in Yichun. In November 2022, a few local lithium carbonate firms stopped their operations due to an environmental investigation of a river, the primary drinking source for the community. Additionally, villagers have been caught mining lithium without permission.

• EU and U.S. close to agreement on battery minerals trade agreement: European Commission Vice President Valdis Dombrovskis noted the U.S. has “indicated openness to find ways how to treat us as a free trade agreement-equivalent partner,” supporting a statement from U.S. Treasury Secretary Yellen that the U.S. and EU were close to reaching an understanding on battery minerals tax credits under the Inflation Reduction Act. Additionally, Secretary Yellen said she does not believe an agreement would need approval from Congress and noted that it would also likely include high labor standards and export control provisions to ensure secure supply chains.
  • She supported this notion, saying, “I think the word ‘free trade areas’ was meant to mean reliable friends and partners with whom we can feel we have secure supply chains so we feel this is fully the intent of Congress and we’ll be able to negotiate such agreements.”
  • The two parties are expected to meet later this month to discuss mineral and battery tax credits in the Inflation Reduction Act. Additionally, the U.S. Treasury Department will release guidance on the provisions in March.

• United States increases tariffs on Russian aluminum: The U.S. announced on February 24 it will increase tariffs on Russia’s aluminum industry due to its critical role in Russia’s defense industry and Russia’s invasion of Ukraine. Additionally, the White House announcement notes that the invasion “has caused global energy prices to rise, causing direct harm to the United States aluminum industry.”
  • Beginning on March 10, 2023, a 200% ad valorem tariff on aluminum articles and aluminum derivates that are a product of Russia.
  • Beginning on April 10, 2023, a 200% ad valorem tariff on aluminum articles where any amount of primary or derivative aluminum used in the manufacturing process is smelted or cast in Russia.

• S. Representative questions mineral supply agreements with the Democratic Republic of the Congo (DRC) and Zambia: Chair of the House Natural Resources Subcommittee on Energy and Mineral Resources, Rep. Pete Stauber (R-MN-08), sent a letter to U.S. Secretary of State Antony Blinken on February 23, voicing his concerns and requesting answers to four questions on the December 13, 2022, Memorandum of Understanding with the DRC and Zambia on mineral supply chains. In his letter, Rep. Stauber discussed how the U.S. “must address the pressing need to stabilize and secure America’s mineral supply chains with our own domestic natural resources.” The Biden administration is looking “to source these minerals from countries with suspect records in terms of environmental standards, child and slave labor, and corruption.” He concluded the MOU “validates and rewards these conditions, endangers our national security supply chains, and signals to the world that your State Department’s energy goals are more important than the basic rights of the people who currently supply cobalt to the international marketplace.”
  • According to E&E News, the U.S. Department of State said in a January email “that the agreement would help establish a “transparent” and competitive value chain in Congo and Zambia that respects human rights, resists corruption, generates local employment and contributes to the economies of both countries.”

 Looking Ahead

• 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.
• 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.
• 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.
• 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.

 In Case you Missed It

• E&E News: Federal appeals court declines to block Nev. lithium mine
• Mehr News Agency: First lithium reserve found in Iran: official
• Electrek: Honda JV breaks ground on $3.5 billion EV battery plant with LG Energy Solutions in Ohio
• Bloomberg: Tesla to Build Northern Mexico EV Plant, AMLO Says After Musk Call
• AP News: Germany threatens to hold up EU’s combustion-engine car ban
• Reuters: China Natural Resources to acquire lithium mine in Zimbabwe
• The Wall Street Journal: Global Miners Gear Up for Energy Transition With Deals and Investments
• E&E News: House Republicans accelerate march toward big energy package
• Bloomberg: Australian Energy Minister Rules Out Ban On New Coal Mines
• Euractiv: EU’s due diligence law could boost competitiveness of mining sector
• Reuters: Audi mulls U.S. plant as IRA subsidies draw carmakers
• E&E News: The aluminum industry’s clean energy paradox
• Bloomberg: Lithium Producers Defy Mining Sector Slump With Surging Profits
• E&E News: Mining company seeks a voice in greens’ Okefenokee lawsuit
• S&P Global: US critical mineral imports slump in Q4’22 as demand from steel industry falls
• Utility Dive: Federal incentives help drive $52B of investments in 17 EV battery production facilities: BofA
• Wyoming Tribune Eagle: Governor signs bill to help advance rare earth elements mining
• Reuters: Albemarle restructures joint venture with Australia’s Mineral Resources

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