The Elements of Innovation Discovered

Forging a strong tech metals supply chain

Metal Tech News - June 17, 2024

Changing how the West approaches globalism will be the key to a circular economy the whole world can get behind.

The Western world has found itself in a unique crisis that has brought systemic vulnerabilities into sharp relief. An overreliance on problematic imports has been exposed (especially post-COVID) as a rat's nest of potential supply chain disruptions, global inequality, deregulation and competition-killing corporate consolidation – all while leaving the power of market manipulation squarely in the hands of geopolitical and financial rivals like China and Russia.

Critics of profit maximization over redundancy and diversification point out that this isn't just a wait-and-see problem for tomorrow, like the complex case of lithium – are we overproducing for an industry that's actually slowing down? Will it become irrelevant as battery tech evolves? Will the world get caught by an exponential shortfall before we figure it out?

What went wrong

Importing and outsourcing are less of a problem than the short-sighted reasoning behind choosing them repeatedly over more economically stabilizing alternatives.

The workforce exodus, unstable prices, and inflation eating into wage gains as countries clamor to recover supply chains won't be cured by pulling out of China's iron grip on battery metals alone.

The practice of creating externalities – social and environmental costs initiated by one party to be suffered by another – has been home-grown and is much more at fault for allowing the slow corrosion of resource stability, especially in the U.S.

The term "externality" was first coined in 1890 by the British economist Alfred Marshall to explain the effects of commerce that extend beyond the immediate parties involved in a transaction. The term became distasteful as its use included business practices entirely divorced from environmental and social accountability.

Publicly traded companies have found themselves beholden to the financial interests of their shareholders above competing interests, and while a drawn-out overhaul of corporate law is worth considering, investors putting greater value on environmental, social, and governance (ESG) compliance has helped immeasurably in the interim.

Healing old wounds, fostering trust

America's mineral-rich state of Alaska has emerged as a prime example of rich resource potential and pushback from those who judge modern mining by harsh and outdated perceptions.

"Our state also has many promising projects on the horizon, which will provide more jobs and revenues, shore up our national security, and reduce our imports by providing domestic sources of antimony, chromium, cobalt, copper, gallium, germanium, gold, graphite, lead, lithium, nickel, palladium, platinum group elements, silver, tin, and zinc, among others," Alaska Sen. Lisa Murkowski said in a statement celebrating this year's Alaska Mining Day. "Alaska's mineral potential is off the charts."

Yet even with its rich history of hardy workforces, subsistence lifestyles, and involved Alaska Native populations, America's largest resource-rich state has found itself at odds between policies and politics, which appear to lose sight of who a domestically robust economy should serve.

Mining has a history of environmental degradation and has been slow to put in the work to recover public trust.

Perception has lagged behind real progress, with many mining companies embracing green technologies from the electrification of equipment and vehicle fleets to digital modernization through machine learning, AI and automation – but only touting their successes to peers.

Mykhailo Pavlenko/Shutterstock

Economic security will come through building in supply redundancies and supporting markets that work for the people getting their hands dirty building them.

How minerals go critical

Geopolitical tensions, trade policies, and global market dynamics can all impact availability and costs. As worldwide populations and modernization increase, last century's model must be reframed from "needing more of everything" to "doing more with less."

The Western world now needs a supply chain overhaul, which will take collaboration efforts between regulators, policymakers, industry leaders, and entrepreneurs – not only in the U.S. but amongst like-minded international allies.

Each country's critical minerals list covers materials vital to maintaining the status quo, let alone advancements in green tech.

Circular supply chains will have to effectively integrate each mineral to prevent a global run on inherently limited resources. (Swapping out forests and oil for rare earths and copper would be overlooking how all this came about to begin with.)

Success has already come through strategic partnerships, not only between local governments and businesses but between countries with discoveries freely shared, alignment of policy and a growing culture of reframing competitors as peers.

Securing domestic supply, a case study

The U.S. will need to roll back decades of offshored extraction and processing – where once the appeal of a cheap foreign workforce was attractive to bottom lines, and a not-in-my-backyard sentiment was satisfied by sending business across the ocean – a broader sense of world citizenship has changed the playing field.

Despite each country's range of reserves and investment in the exploration and development of new mining projects, actual mining and production capabilities are not yet developed to meet demand. What is mined is often being exported to countries where exploitative practices are damaging to not only the environment but also geopolitical relations.

With lithium as the prime example, the U.S. is discovering deposits across the country. California's Salton Sea is not only rich in brines but lends itself to a closed-loop extraction process, with companies like Stellantis and General Motors supporting the project while securing future supply.

"The foundation of our industry-leading decarbonization drive includes low-emissions production and sustainable supply as the building blocks for our electric vehicles," Stellantis CEO Carlos Tavares said.

While Australia is the world's leading producer of lithium from hard rock mines, it is far from resting on those laurels. Pushing for increased domestic processing and refinement and a new 2024 budget for the next decade casting a wide net across the bush, 80% of which remains unexplored.

"The world needs more of these resources – and our government is going to help Australia find more," said Australia's Prime Minister Anthony Albanese. "We will fund the first comprehensive map of what's under Australia's soil – and our seabed. Meaning we can pinpoint the new deposits of critical minerals and strategic materials we need for clean energy and its technology. As well as traditional minerals like iron ore and gold. And potential storage sites for hydrogen."

Canada is leveraging its own rich geography to identify and develop new sites for lithium and cobalt extraction, and prides itself as the only country in the Americas with all the minerals needed to manufacture EV batteries. The trick will be getting at them, with support forthcoming from Ford Motor Company, Volkswagen, and more.

Working smarter (and sometimes harder)

An aversion to difficulty and expense hasn't done any favors for companies looking to boost margins by way of the path of least resistance – for instance, cheap cobalt from artisanal extraction in the Democratic Republic of Congo.

Alternatives are few and far between, with supply in the U.S., Australia, and Canada coming up but lagging far behind the curve.

Ensuring that mining and processing projects adhere to high ESG standards and regulatory frameworks has proven both necessary and challenging, potentially extending timelines and driving up production costs, all while market prices fluctuate. This is an ongoing problem, with some new mines closing before having a chance to take off.

In response, car and battery manufacturers have inserted themselves farther upstream, securing access to feedstocks, developing their own production and recycling facilities, bringing bigger budgets and longer-term financial support, and even revitalizing investment and offtake agreements.

Meanwhile, it is up to legislators to streamline regulatory procedures to make domestic mining and processing projects more feasible. This includes revising outdated permitting procedures and fostering a balance between regulatory compliance and economic development.

"The new regulatory requirements and the increased focus on sustainability among large companies will put significantly higher demands on all suppliers when it comes to reporting and improving their carbon footprint," said Jenny Hörnlund, head of sustainable manufacturing at Sandvik. "I believe that value chains will be transformed and there will be more circular models. I am convinced that we are only at the beginning of a major transition."

Martin Barraud/KOTO at stock.adobe.com

The Sustainable Critical Minerals Alliance between The United States, Canada, Australia, France, Germany, Japan, and the United Kingdom was launched to drive global adoption of environmentally sustainable and socially inclusive mining, processing and recycling practices.

Diversifying and strengthening ties

The U.S. has been improving alliances with Australia and South American nations to secure additional supplies of essential metals and more as Australia expands its own battery production offerings.

The U.S. and Canada have also nurtured a long-standing collaborative approach to mining. In 2020, both signed a Joint Action Plan on Critical Minerals Collaboration, supporting a secure supply chain via research and development initiatives.

Several positive cross-border coordination projects have been initiated – a Sustainable Critical Minerals Alliance between Australia, the U.S., Canada, France, Germany, Japan, and the U.K. was launched to drive global adoption of environmentally sustainable and socially inclusive and responsible mining, processing and recycling practices.

These coalitions all facilitate the exchange of information and best practices, reducing barriers to investment and fostering innovation while encouraging investment that benefits participating nations and the energy transition.

Innovation for the win

Ambitious government and private sector initiatives are also driving advancements. The U.S. Department of Energy has launched numerous research programs focused on improving every aspect of the energy transition, from new materials like graphene to new applications for rare earths.

Academic institutions are also playing a crucial role, innovating solutions with fewer critical minerals, cheaper alternatives, improved material functionality, and a surge in game-changing technologies. Universities and research centers partnered with industry players can bring advances to commercial use faster and use the influx of funding opportunities to develop more timely solutions.

These collaborations are essential for fostering cutting-edge research and translating it into practical applications.

The private sector is also closing the gap between recycling initiatives and practice, supported by government incentives such as the U.S. Battery Recycling Prize, a $5.5 million mining initiative for innovative recycling solutions.

While recycling infrastructure has been a non-starter in many ways, companies like Pyxera are using existing logistics companies like FedEx to connect end-users with e-waste and battery recyclers.

Economic security will come through building in redundancies as well as domestic supply, pushing back against concentrated power, and supporting markets that serve the people getting their hands dirty building them rather than just financial elites exploiting them.

Nothing creates goodwill like fair trade. Together, friendly international alliances can reform flagging economies to be greener, more adaptive and robust – redefining globalism that supports the bigger picture.

 

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