President Joe Biden issued a directive on Thursday that invokes the Defense Production Act – a move the administration hopes will kickstart the domestic production and mining of the critical minerals needed to manufacture batteries for electric vehicles and long-term energy storage.
The directive adds critical minerals – things like lithium, nickel, graphite, cobalt and manganese – to the list of items covered by the 1950 Defense Production Act, a Korean War-era law that allows the president to use emergency authority to make large orders of a certain type of product or expand productive capacity and supply.
The longterm goal, according to White House officials, is to move the country toward renewable energy and electric vehicles. The less the country depends on fossil fuels and gas-powered cars, the less prone consumers are to wild swings in oil prices amid geopolitical conflict.
But China has a massive hold on the worldwide supply chain, owning mines in Africa and processing much of the material, as well. Biden’s move could signal a major shift in how the US acquires and processes these minerals.
“This is a long-term shift,” Nikos Tsafos, an energy security expert at the Center for Strategic and International Studies, told CNN. “If you’re looking for relief at the pump or any immediate shift in prices, this is not the thing that does that. This is about thinking about 2030. It’s about putting the United States in a strong position in the world to not be exposed to the kind of risks that we are witnessing today with the high prices that come from geopolitical tension one-third of the way around the world.”
Tsafos also cautioned that without legislation from Congress, “renewables will not ramp up at the rate they need to.”
Jumpstarting the renewables supply chain
Adding the minerals to the Defense Production Act list would allow producers to get federal funding and assistance. The Department of Defense would implement this authority, according to the White House, and the Departments of Energy and Interior will also be involved.
While the actions being considered aren’t loans or direct purchases for critical minerals, they could still fund critical mineral mining operations, feasibility studies, and productivity and safety modernizations.
“Some of those things are effectively mining,” Earthjustice senior legislative representative Blaine Miller-McFeeley told CNN. “Productivity is key for just getting more minerals out of the ground as quickly as possible. I don’t believe this limits the types of activities in the mining space very much.”
On Thursday, a senior administration official said the process will be done “in a way that respects and really sets the highest standards on labor, on environment, on engagement with communities and with tribal nations.”
And as climate groups like Earthjustice are urging the Biden administration to weigh environmental impacts, consult with tribal nations, and prioritize recycling critical minerals, mining companies are urging the administration to approve the three major critical minerals mining projects in the US quickly.
“Getting these three projects through the permitting process so that they can begin production as soon as possible is critical to jumpstarting the domestic supply chain for renewables,” James Calaway, chairman of boron and lithium mining company Ioneer, told CNN. “In order to bring down emissions, we have to electrify vehicles. If you don’t have these materials, it can’t be done.”
A potentially thorny process
Critical minerals are the key ingredients to power electric vehicles and batteries that can store electricity from solar and wind. And even though critical mineral mining in the US is a nascent industry, the US is sitting on a lot of untapped mineral reserves.
It’s the process of extracting them that could prove politically challenging.
Several critical mineral mining projects are in the works in the US, and three are in advanced stages of the permitting process – two in Nevada and one in North Carolina.
Rhyolite Ridge in Nevada could produce enough lithium to produce up to 400,000 EVs per year. Thacker Pass in Nevada could produce enough lithium to power 1.5 million EVs per year, and Piedmont in North Carolina, which could produce enough lithium to power 3 million EVs per year.
Calaway, the chairman of Ioneer, said he wants the current permitting and review process for mining operations to be more “focused and efficient.”
“Right now, a lot of different agencies have input in the process,” Calaway told CNN. “There needs to be greater coordination and all agencies need to stay on schedule so that the industry has better predictability for its projects.”
Still, tribal and environmental groups are keeping a close eye on the administration’s next steps. They want to make sure there is rigorous environmental review and consultation with tribal nations. Large critical mining operations, including the Thacker Pass mine in Nevada, are close to tribal lands. Tribal nations oppose that project over concerns about disturbing sacred burial grounds and its potential environmental impacts.
Miller-McFeeley said Earthjustice is concerned that federal funds could go toward directly subsidizing the mining industry.
“I think the White House’s goal is to help create more virgin materials and products here in the US,” he said. “Earthjustice’s perspective is that these funds cannot be used to proceed under a business-as-usual scenario for the hard rock mining industry.”
A lot of that will be under the Biden administration’s regulatory purview, since Congressional laws on mining haven’t been updated since 1872.
West Virginia Sen. Joe Manchin, Democrats’ crucial swing vote on their climate and economic bill, is a big advocate of using the Defense Production Act to spur critical minerals production in the US. Manchin and three Republican senators wrote to Biden earlier this month asking him to invoke the Defense Production Act to domestically produce and process critical minerals such as lithium and graphite.
“I like defense production – get to it, get it done,” Manchin told CNN yesterday when asked if he was supportive of the president’s action.