The International Energy Agency recently offered a stark warning about the prospects for the energy transition: Fail to develop the mineral supply chains that are the building blocks for advanced energy technologies and risk undercutting deployment at the speed and scale needed to meet the climate challenge.
The Biden administration’s 100-day supply chain review reached much the same conclusion. While mineral supply chains can be enablers of reshoring manufacturing and good jobs, bolstering national security and propelling climate action, our current mineral import trajectory will increasingly see these supply chains only become impediments to the president’s agenda.
The president’s goal to win the electric vehicle future is case in point. Citing the IEA’s report, the administration’s supply chain review highlighted the staggering scale of the mineral demand coming from the accelerating EV revolution. Global lithium demand could soar 40 times by 2040 with cobalt and nickel demand jumping at least 20 times. Copper, which provides the arteries and veins of an electrified world, will see its demand double. Demand for rare-earth elements will jump as well. Department of Energy analysis forecasts than all-EV American future could require more than double current global lithium production.
What is particularly startling is not just the scale of the coming demand but the speed at which it is building. Battery megafactories are rising by the dozen to meet increasingly ambitious EV deployment targets. The world saw the addition of 280 GW of renewable energy in 2020, roughly equal to the entire installed electricity generating capacity of Southeast Asia. Every new EV, solar array, wind turbine and transmission line is driving demand higher and faster than ever before.
The obvious conclusion – one endorsed by the IEA and now by the administration – is that resource-producing nations must work to bring more responsible supply to market and do it immediately. The administration is rightfully concluding that its climate ambitions, its focus on secure, American supply chains and its effort to reshore manufacturing and high-paying, stable jobs all rest on a foundation providing by mining.
The administration also understands there’s no silver bullet to meeting the demand challenge now at our doorstep while also combatting our alarming overreliance on materials coming from adversarial nations and sources with unacceptable environmental and labor standards. Addressing these challenges, as the administration articulates in its supply chain review, will require the United States to work with allies to diversify supply chains and incentivize environmentally and socially responsible production abroad while also investing in “sustainable production, refining, and recycling capacity domestically.”
Where the multiagency supply chain review sheds light between agencies – and where consensus must be found to build the tangible forward momentum U.S. supply chains need – is in recognizing the robust environmental and labor standards that are already in place, and looking for ways to streamline our duplicative mine permitting process. Where the Department of Energy advocates to revisit the laws that govern mining projects, the Department of Defense acknowledges the extensive network of federal, state and local regulations that already expand the permitting process to a decade or more. These questions must be resolved – and resolved quickly – to ensure new production can respond to ever-louder market demands.
While allies and geopolitical rivals alike have prioritized domestic minerals strategies, the United States has been largely complacent with our increasing import dependence. If we are to look to allies to help meet soaring demand, we should also learn from their strategic efforts to boost the competitiveness of their mining industries.
There is strong bipartisan support for ramping up domestic mineral production. The administration’s supply chain review is an important step forward to ensuring we take a thoughtful, responsible approach to meeting the mineral needs so essential to nearly every facet of our economic, national security and energy future. Now is the moment to ensure made-in-America begins with mined-in-America.
Rich Nolan is president and CEO of the National Mining Association.
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