COLUMN-US Infrastructure Bill Targets Critical Mineral Supply: Andy Home

0


Band Andy’s house

LONDON, August 12 (Reuters)The US $ 1 trillion infrastructure package is undoubtedly good news for industrial metals.

More money for upgrading highways, railways and power grids will translate into increased demand for steel, copper and aluminum.

But when it comes to battery metals and critical minerals, the bipartisan bill is as much about boosting domestic supply as it is demand.

A total of $ 6 billion is earmarked for battery material processing and manufacturing projects and an additional $ 140 million is earmarked for a rare earth demonstration plant, as part of a larger investment effort across the entire metal supply chain.

The Biden administration understands that without investing in domestic production capacity for critical metals, it will struggle to meet its dual commitments to rebuild greener and “Buy American” while doing so.

RARE EARTH

The United States’ dependence on imports of rare earth compounds remains near total with 80% of shipments originating from China last year, according to the United States Geological Survey (USGS).

While the Department of Energy is already devoting funds to research and development spanning the spectrum of materials from primary treatment to recycling, the infrastructure bill bolsters commitment with a $ 140 million grant. to build a facility “to demonstrate the commercial feasibility of a large-scale integrated facility and refinery for the extraction and separation of rare earth elements”.

The project, which will be coordinated with “an academic partner”, will specifically provide “environmental benefits through the use of raw materials derived from acid mine drainage, mine wastes or other harmful materials”, later.

Rare earths are just one item on the long list of vulnerable critical mineral supply chains in the United States.

The bill also allocates $ 100 million per year through 2024 in grants for the development, processing and recycling of essential minerals.

A minimum of 30% will be reserved for recycling projects. Any US-based project will be given priority and none will be allowed to export to “a foreign entity of concern.”

BATTERY METALS

Electric vehicle (EV) fans have been underestimated by the $ 7.5 billion allocated in the infrastructure bill for EV charging. A group of House Democrats in the United States is already pushing for a significant increase in the $ 3.5 trillion budget plan.

However, the direction of the electric displacement is clear.

President Biden signed an executive order earlier this month that half of all new vehicle sales in the United States will be electric by 2030.

The question is whether the country will have enough lithium, nickel and cobalt to make the batteries needed to power these vehicles.

The Infrastructure Bill is the U.S. government’s response with allocations of $ 3 billion each for battery material processing and battery manufacturing projects.

In each case, the grants will be for demonstration plants, full commercial facilities, or upgrades to existing facilities in the United States.

Not surprisingly, the eligibility requirements for a grant include US ownership, North American intellectual property rights, and a commitment not to “use drum materials supplied by or from any foreign entity of concern.” “.

Interestingly, a new nickel refinery turned out to be at the top of the wishlist for critical minerals in the Biden administration’s 100-day supply chain review.

“If there are opportunities for the United States to target part of the battery supply chain, this would probably be the most critical to ensure the stability of the supply chain in the short to medium term,” said the report.

The United States has limited mining capacity and no processing capacity for a metal that is expected to experience strong growth in demand from the battery sector.

The infrastructure bill appears intended to launch a domestic supply response, centered around the mineral processing link in the supply chain.

ALLOW PROBLEMS

Ideally, of course, a US-funded nickel or other battery-metal refining facility would process the ore mined in the United States.

However, placing new mines on US soil can be a slow and torturous task given the complexity of the licensing processes. Too slow if the country is on the verge of generating enough metals for the next green revolution.

“The federal clearance process has been identified as an obstacle to mineral production and mineral security in the United States,” the infrastructure bill notes, calling for the introduction of performance measures for approval. critical mineral mines.

Environmental opposition to green metal mining projects is also a big problem, and not just in the United States. A mega lithium project in Serbia is already facing stiff opposition from local pressure groups.

It remains to be seen how quickly federal permits can be accelerated given the growing resistance against “dirty” mining.

TOTAL MINING

There is a potential way to bridge this green-green divide.

One of the big problems inherited from the mining sector is old tailings and waste landfills, which often seep into local water supplies.

The increased profile of critical minerals over the past two years has prompted a collective overhaul of what exactly mine “waste” is.

The mining economy is often determined by a primary host mineral. Some by-products such as gold are valuable and deserve to be processed. Many, however, end up in the tailings.

Companies like Rio Tinto RIO.L now return to re-examine what they threw away. In the case of the company’s Canadian titanium business, they found scandium, which has been named a critical mineral by the United States and Europe.

A relatively modest investment of $ 6 million will produce three tonnes per year of scandium oxide – about 20% of the global market – without the need for additional mining.

This trend towards “whole-concept” or “total mining” is taken up in the bill on infrastructures.

The USGS is tasked with completing a comprehensive study of the national mineral resources within 10 years, “using a whole deposit approach rather than a single product approach, to focus on all of the critical recoverable minerals in a deposit. of given surface or underground ”.

The bill also calls on the USGS to “map and collect data for areas containing mine waste to improve understanding of critical mineral resources above ground in previously disturbed areas.”

It is precisely this “waste” that will feed the proposed new rare earth processing plant.

Building new mines will remain a headache for critical mineral planners all over the world, so it makes perfect sense to go back to what has already been mined.

If this helps clean up the tailings at the same time, it could be a win-win solution for greens of all stripes.

(Edited by Kirsten Donovan)

(([email protected], 44-207-542-4412 and on Twitter https://twitter.com/AndyHomeMetals))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



Share.

Leave A Reply