The U.S. Is Worried about Its Critical Minerals Supply Chains – Essential for Electric Vehicles, Wind Power and the Nation’s Defense

Because of this, the Department of Defense has been one of the strongest supporters for more resilient supply chains. In the last few years it has been proactive about strengthening domestic production, especially for rare earth elements. That includes new contracts with rare earth mining and production operations in California, Nebraska and Texas. The Defense Logistics Agency also has emergency stockpiles of 42 commodities with a market value of US$1.1 billion at six different locations across the U.S.

Now, with President Joe Biden’s infrastructure plan promising an expansion of electric vehicles and renewable energy, “green” legislation becoming more likely and climate change becoming a priority, critical mineral supply chains are again in the spotlight.

Getting serious about supply chains

The amounts of lithium, cobalt, graphene, indium and other critical minerals needed for low-carbon technologies alone are expected to increase anywhere from 100% to 1,000% by 2050.

These estimates are concerning on their own, but when combined with military needs, industrial needs and the decline of U.S. mining, it paints a troubling picture for U.S. supply shortages.

Countries like the Democratic Republic of Congo, which made headlines in the past due to mineral sales that financed armed conflict, are not particularly appealing partners for U.S. companies. The DRC is responsible for producing more than 70% of the world’s cobalt, used in almost all rechargeable lithium ion batteries that power everything from cellphones and laptops to electric vehicles, and China has invested heavily in the region.

The ability of the United States to drive demand – but hesitation to get involved with “risky” nations or commit to domestic production – means the U.S. is reliant on countries that are more willing to accept those risks. China now controls 80% of the world’s lithium-ion battery material refining, 77% of the world’s battery cell capacity and 60% of the world’s battery component manufacturing.

How to strengthen critical supply chains

The U.S. can take several steps to avoid being left behind by shortages and to ensure a successful energy transition.

During the Trump administration, the U.S. launched a federal strategy to ensure reliable supplies of critical minerals, but that strategy was based in part on scaling back reviews of the projects’ environmental impact, and it didn’t have many actionable steps. The administration also started the Energy Resource Governance Initiative, focused on working with partner countries on improving the governance of mineral supply chains.

The U.S. has lots of room to improve its support for critical mineral markets and trade agreements. Biden’s 100-day review of the critical mineral supply chains is a good start.

Expanding recycling and reuse of critical minerals can also increase sustainability and make minerals more available for U.S. use. One way to encourage recycling programs is to shift responsibility from waste managers to major producers like Apple and Samsung.

International agreements can also be written in ways that require responsible mining. U.S. companies, similarly, can do more to ensure that they aren’t purchasing from unsustainable sources or supporting practices that encourage the abuse and exploitation of developing economies.

The U.S. can also expand its exploration for critical minerals. Rio Tinto recently announced plans for a new plant to recover tellurium, a critical mineral used in solar panels, from its copper refining operations in Utah. Lithium mining in the California desert has also started to attract investors, as have rare earth projects in Colorado and Nevada.

Discussions of clean energy technologies should also include industrial policy, such as how mines are permitted, funding for processing plants and advanced manufacturing research. How the U.S. shapes the path for critical minerals will have important consequences for everything from the environment to national security.

Jordy Lee is Payne Institute Program Manager, Colorado School of Mines. Morgan Bazilian is Professor of Public Policy and Director, Payne Institute, Colorado School of Mines. This article is published courtesy of The Conversation.