The Elements of Innovation Discovered
The Elements of Innovation Discovered
Renewable energy, EVs need secure and reliable metal supply Metal Tech News – February 25, 2021
The mass adoption of renewable electricity and EVs envisioned by the Biden administration is going to require a massive upgrade and expansion of American supply chains.
World Bank forecasts skyrocketing demand for several metals critical to low-carbon technologies.
The American clean energy revolution envisioned by the Biden administration is going to require a massive supply chain upgrade – from the mines feeding rare earths, battery metals and other materials into the front end, to the manufacturers that will utilize these mined materials to build the electric vehicles and renewable energy infrastructure needed for a low-carbon future.
In a move that demonstrates the newly elected administration's hopes that a transition to low-carbon energy and transportation can go hand-in-hand with an American economic revolution, President Joe Biden signed an executive order that instructs federal agencies to investigate what needs to happen to strengthen the resilience of America's supply chains.
"Resilient, diverse, and secure supply chains are going to help revitalize our domestic manufacturing capacity and create good-paying jobs," Biden said before signing the "Executive order on America's Supply Chains" on Feb. 24.
This executive order was hailed as a win by every segment of the American clean energy supply chain – from mining companies positioned to feed rare earths and battery metals into the front end to the automotive giants that will need enormous new supplies of those critical minerals to manufacture a new generation of electric mobility in the United States.
"We applaud President Biden's urgency to assess and build additional U.S. capacity across the transportation, energy and defense industrial base," said USA Rare Earth CEO Pini Althaus.
The executive order covers four vital supply chains in the U.S. – semiconductors; high-capacity batteries, including those needed for electric vehicles; critical minerals, including rare earth elements; and pharmaceuticals, including the personal protective equipment that was in short supply during the COVID-19 pandemic.
The rare earths, lithium and other critical minerals found at USA Rare Earth's Round Mountain project in Texas are directly related to the first three of these supply chains and supports the fourth.
"Rare earths and critical minerals, including lithium, are essential to modern technology and require a robust, resilient strategy for U.S. advanced manufacturing and national security," Althaus added.
Green New Deal
With global EV sales forecast to increase from roughly 2 million vehicles in 2020 to 30 million by 2030, the global competition for the lithium, cobalt, graphite, and nickel that go into the batteries, and the rare earths that go into powerful magnets of these automobiles is expected to be fierce.
Benchmark Mineral Intelligence, considered as the global authority on lithium-ion battery supply chains, is tracking 186 battery manufacturing factories in the pipeline around the world with the capacity to produce 3.1 terawatt-hours of battery storage capacity per year by 2030, which is a 1,250% increase over 2020. By 2040, Benchmark expects the storage capacity of battery cells produced worldwide to increase by a staggering 4,200%.
While the demand for this amount of EV battery storage is being ascertained by the electric transformation of automakers, sourcing the raw materials to feed into the battery supply chains is less clear.
"We see key battery raw material markets falling into deficit, most imminently cobalt, but (also) lithium, graphite, and nickel over the coming years," Caspar Rawles, the head of price assessment at Benchmark, told Metal Tech News earlier this year.
A World Bank report published in 2020 estimated that the annual demand for battery materials such as graphite, lithium and cobalt could increase by roughly 500% over the coming three decades. While this projection is generalized and considered vastly conservative by lithium-ion battery insiders, it provides some insights into the need to secure resilient battery metal supply chains.
Last June, Benchmark Mineral Intelligence Managing Director Simon Moores floated a strategy to the U.S. Senate Committee on Energy & Natural Resources that addresses many of the supply chain vulnerabilities considered in the Biden executive order – invest in a complete mines-to-batteries supply chain in the U.S. on a scale reminiscent of President Franklin D. Roosevelt's New Deal.
"Instead of dams, you need to build battery megafactories in their multiples. Instead of highways, bridges and tunnels, you need to build the supply chains to enable these megafactories to operate securely and consistently," he said. "These include the cathode and anode plants, and the lithium, cobalt, graphite, nickel and manganese sources to feed them."
Moores is not suggesting minor incentives to gradually build out domestic battery infrastructure, telling the senators that this investment in the lithium-ion supply chain "has to be done at a speed, scale, and quality that will make most of U.S. corporations uncomfortable."
Further details of Simon Moores' testimony can be read at New Battery Deal idea floated to Congress in the July 1, 2020 edition of Metal Tech News.
Applauded by EV supply chain
From junior mining companies to automotive giants, corporations are realizing the need for, and are becoming more comfortable with, the scale of EV supply chain upgrades suggested by Moores.
"We need to bring large-scale battery production to the U.S.," Ford Motor Company CEO Jim Farley said at a conference in Detroit just a couple of hours before Biden signed the supply chain executive order in Washington, D.C.
A recent global shortage of semiconductors has caused American automakers to idle back production, resulting in reduced hours for American workers already hit hard by the COVID-19 pandemic.
In addition to the lost jobs and revenues, the dependence on overseas suppliers for these vital chips is a wake-up call for the automotive sector.
"We can't go through what we're doing now with chips," said Farley.
At the front end of the EV supply chain, mining companies are pleased to see that the Biden administration recognizes a reliable supply of minerals as an important ingredient to the renewable energy and EV revolution.
"Graphite One welcomes the recognition of renewable batteries, and EV batteries in particular as a critical supply chain," said Graphite One CEO Anthony Huston. "The fact that graphite is essential to three critical supply chains named in the executive order underscores the importance of Graphite One's supply chain approach."
Graphite One is advancing toward the development of a graphite mine in Alaska and a separate processing facility that can upgrade that graphite into the coated spherical graphite needed in the lithium-ion batteries powering EV's and storing renewable energy.
Understanding that this project could be an important link at the beginning of the U.S. lithium-ion battery supply chain, Alaska Gov. Mike Dunleavy nominated Graphite Creek as a as high-priority infrastructure project to be eligible for Fast-41.
"Designating the Graphite Creek Project as a high-priority infrastructure project will send a strong signal that the U.S. intends to end the days of our 100% import-dependency for this increasingly critical mineral," he penned in his 2019 nomination letter.
The U.S. Federal Permitting Improvement Steering Council (FPISC) recently accepted the nomination, designating Graphite Creek as a high-priority project at the front end of renewable energy and manufacturing supply chains.
Biden's executive order calls for a 100-day review that is expected to result in recommendations for ensuring secure and reliable American semiconductor, critical minerals, and EV battery supply chains.
The President, however, said his administration will not sit idly by while these reviews and recommendations are compiled.
"We're not going to wait for a review to be completed before we start closing the existing gaps," said Biden.
"There's nothing, nothing, nothing we've ever failed to achieve if we work together, he added. "And that's what we decided to do today, and that's what we're going to do – work together."
With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.
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