U.S. President Joe Biden will rely on Allied countries to supply most of the metals needed to build electric vehicles and will focus on processing them nationally into battery parts, part of a strategy designed to appease environmentalists. as reported by the news agency Reuters two government officials with direct knowledge. .
Plans will be a blow to U.S. miners who expected Biden to rely primarily on domestically sourced metals, as his campaign had indicated last fall, to help meet his ambitions for a less intense economy. carbon.
Instead of focusing on allowing more mines in the United States, the Biden team intends more to create jobs that process minerals nationally in electric vehicle (EV) battery parts, according to officials.
This plan would help reduce the dependence of the United States of China, an industry leader, for EV materials, while attracting unions with manufacturing jobs and, in theory, reducing unemployment fueled by a pandemic.
The U.S. Department of Commerce is organizing a June conference to attract more electric vehicle manufacturing to the country. The $ 1.7 trillion proposed infrastructure plan by Biden spends $ 174 billion to boost the domestic electric vehicle market with tax credits and subsidies for battery manufacturers, among other incentives. The department declined to comment.
“It’s not that hard to dig a hole,” one source said. “What is difficult is to take these things out and take them to the processing facilities. That’s what the United States government is all about. “
Secure the supply chain
Depending on the approach, the United States will rely on Canada, Australia, and Brazil, among others, to produce most of the critical critical raw materials needed, while competing for more valuable jobs by turning these minerals into chips and computer batteries, according to both sources. .
Securing the entire metal supply chain to batteries does not require the U.S. to be the leading producer of raw materials, one source said.
A comprehensive strategy will be finalized following a one-year supply chain review involving national security and economic development officials.
Biden officials want to make sure the administration’s EV aspirations are not jeopardized as domestic mines face traffic barriers, according to sources, from both environmentalists and even some Democrats. .
“It sounds empty when I feel like everyone is using this as a national defense argument, that we need to build new mines to have a greener economy,” said U.S. Rep. Betty McCollum, a Democrat who has introduced legislation that would permanently block the proposal of Twin of Antofagasta Plc Metal Copper Mine in Minnesota.
“President Biden is focusing on seizing the electric vehicle market, sourcing and manufacturing the supply chain here in the United States, and creating well-paid, union jobs,” said Ali Zaidi, deputy national climate adviser. of the White House. “Building vehicles manufactured in the United States and shipping them worldwide will include taking advantage of American-made parts and resources. This includes the research, development and responsible extraction of minerals and critical materials used for EV batteries ”.
Zaidi also said the administration is investing in a strategy that includes recycling in the supply chain.
While U.S. projects by miners large and small will feel the impact, the pain of any blocked project will fall disproportionately on smaller U.S.-focused companies. Many large miners also have global projects that could benefit from the administration’s plan.
“We can no longer drive the production of the products we want to places we can’t see and people we’ll never know,” said Mckinsey Lyon of Perpetua Resources Corp., which is trying to develop the Idaho Stibnite mine to produce gold and antimony to manufacture. EV battery alloys.
The U.S. government became the first shareholder in April in mining investment firm TechMet, which controls a Brazilian nickel project, a tungsten mine in Rwanda and is the main investor in a battery recycler. Canadian.
Washington also funds research into Canadian cobalt projects and rare earth projects in Malawi, among other international investments.
The State Department’s Energy Resources Governance Initiative (ERGI) is one of the major programs Washington plans to use to help allies discover and develop lithium, cobalt, and other EV metals.
Avoid battles with environmentalists
Certainly Washington does not ignore national mining.
The U.S. Department of Energy has awarded grants to help former coal mines find ways to produce rare earths. U.S. officials have also funded MP Materials Corp., which owns the country’s only rare earth mine, though it depends on Chinese processors.
But the bulk of Biden’s approach is designed to dodge battles with environmentalists and save capital for other fights, according to an administration source.
During a visit to a Ford Motor Co. plant in Michigan on May 18, Biden applied for government grants for new EV battery facilities. He mentioned Australia’s lithium reserves during the tour, but not the major supplies of key battery minerals in the US.
Republicans say Biden’s EV plans will be impossible to achieve without more U.S. mines.
“These extremists who are not in my yard have made it clear that they want to close our land and prevent mineral extraction,” U.S. Rep. Lauren Boebert, a Colorado Republican, told the Natural Resources Committee’s forum. Chamber held the same day as Michigan’s visit to Biden.
Ask for work help
Biden’s approach carries risks, including angry political supporters of the labor movement who want the administration to be open to resource extraction and the corresponding jobs.
“We let the Americans extract these minerals from the earth,” said Aaron Butler of the United Association Local 469 union, which does work for the proposed Rio Tinto Ltd copper mine resolution project in Arizona and supported Biden in the election. “They’re well-paid jobs.”
Many of the skills that unions would use to build mines, including concrete and electrical work, can also be used to build EV metal processing plants.
The National Mining Association, an industry trade group, has been pressuring the White House and Congress to support national projects, arguing that the coronavirus pandemic showed the importance of locating supply chains.
Biden’s White House is now quietly working to get job support as it tries to build a case that its green policies create jobs, ahead of the 2022 midterm elections that could determine whether the strategy wins support in Congress , according to two organized labor sources familiar with the campaign
Biden officials have contacted unions across the country to call for specific job increase projects for which the administration can be accredited, according to labor sources.