Biden looks abroad for electric vehicle metals, in blow to U.S. miners

Texas Mineral Resources

25/05/2021 11:00

By Ernest Scheyder and Trevor Hunnicutt
    May 25 (Reuters) - U.S. President Joe Biden will rely on
ally countries to supply the bulk of the metals needed to build
electric vehicles and focus on processing them domestically into
battery parts, part of a strategy designed to placate
environmentalists, two administration officials with direct
knowledge told Reuters.
    The plans will be a blow to U.S. miners who had hoped Biden
would rely primarily on domestically sourced metals, as his
campaign had signaled last autumn, to help fulfill his ambitions
for a less carbon-intensive economy.
    Rather than focus on permitting more U.S. mines, Biden's
team is more focused on creating jobs that process minerals
domestically into electric vehicle (EV) battery parts, according
to the people.
    Such a plan would help cut U.S. reliance on industry leader
China for EV materials while also enticing unions with
manufacturing work and, in theory, reduce pandemic-fueled
unemployment.
    The U.S. Commerce Department is organizing a June conference
to attract more EV manufacturing to the country. Biden's
proposed $1.7 trillion infrastructure plan earmarks $174 billion
to boost the domestic EV market with tax credits and grants for
battery manufacturers, among other incentives. The department
declined to comment. 
    "It's not that hard to dig a hole. What's hard is getting
that stuff out and getting it to processing facilities. That's
what the U.S. government is focused on," said one of the 
sources.
    The approach would see the United States rely on Canada,
Australia, and Brazil - among others - to produce most of the
critical raw materials needed, while it competes for
higher-value jobs turning those minerals into computer chips and
batteries, according to the two sources.
    Securing the full supply chain from metals to batteries does
not require the United States to be the primary producer of the
raw materials, said one of the sources.
    A full strategy will be finalized after a year-long supply
chain review involving national security and economic
development officials.
    Biden officials want to ensure the administration's EV
aspirations are not imperiled as domestic mines face roadblocks,
the sources said, both from environmentalists and even some
Democrats.
    "It rings hollow when I hear everyone use this as a national
defense argument, that we have to build new mines to have a
greener economy," said U.S. Representative Betty McCollum, a
Democrat who has introduced legislation that would permanently
block Antofagasta Plc's  ANTO.L  proposed Twin Metals copper
mine in Minnesota.
    Ali Zaidi, deputy White House national climate advisor, said
the administration was focused on a strategy that "leverages our
domestic resources in a way that's responsible", noting that
included recycling in the supply chain.
    While U.S. projects from small and large miners alike will
feel the impact, the pain from any blocked projects will fall
disproportionately on smaller, U.S.-focused companies. Many
large miners also have global projects that could benefit from
the administration's plan.
    "We can no longer push the production of the products we
want to places we cannot see and to people we will never meet,"
said Mckinsey Lyon of Perpetua Resources Corp  PPTA.TO , which
is trying to develop Idaho's Stibnite mine to produce gold and
antimony used to make EV battery alloys.
        
    INVESTMENTS
    The U.S. government in April became the largest shareholder
in mining investment firm TechMet, which controls a Brazilian
nickel project, a Rwandan tungsten mine and is a major investor
in a Canadian battery recycler. 
    Washington also funds research into Canadian cobalt projects
and rare earths projects in Malawi, among other international
investments. 
    The State Department's Energy Resource Governance Initiative
(ERGI) is one of the main programs Washington plans to use to
help allies discover and develop lithium, cobalt and other EV
metals. 
    To be sure, Washington is not ignoring domestic mining.
    The U.S. Department of Energy has awarded grants to help old
coal mines find ways to produce rare earths. U.S. officials have
also funded MP Materials Corp  MP.N , which owns the country's
only rare earths mine, though it relies on Chinese processors.
    But the bulk of Biden's approach is designed to sidestep
battles with environmentalists and save capital for other
fights, according to one administration source.  
    During a visit to a Ford Motor Co  F.N  plant in Michigan on
May 18, Biden called for government grants for new EV battery
facilities. He mentioned Australia's lithium reserves during the
tour, but not large U.S. supplies of the key battery mineral.
 urn:newsml:reuters.com:*:nL2N2N51IN
    Republicans say Biden's EV plans will be impossible to
achieve without more U.S. mines. 
    "These 'not-in-my-backyard' extremists have made clear they
want to lock up our land and prevent the mining of minerals,"
U.S. Representative Lauren Boebert, a Colorado Republican, told
a House Natural Resources Committee forum held the same day as
Biden's Michigan visit.
    
    PLACATING LABOR
    Biden's approach comes with risks, including angering
political supporters within the labor movement who want the
administration to have an openness to resource extraction and
the attendant jobs.    
    "Let's let Americans extract these minerals from the earth,"
said Aaron Butler of United Association Local 469 union, which
does work for Rio Tinto Ltd's  RIO.AX  proposed Resolution
copper mine project in Arizona and endorsed Biden in the
elections. "These are good-paying jobs."
    Many of the skills that labor unions would use to build
mines, including concrete and electrical work, can also be used
to build EV metal processing plants.
    The National Mining Association, an industry trade group,
has been lobbying the White House and Congress to support
domestic projects, arguing that the coronavirus pandemic showed
the importance of localizing supply chains. 
    Biden's White House is now quietly working to enlist labor
support as it tries to build a case that its green policies are
creating jobs, ahead of the 2022 midterm elections that could
determine whether the strategy wins congressional backing,
according to two organized labor sources familiar with the
campaign
    Biden officials have reached out to unions across the
country asking for specific job-boosting projects the
administration can take credit for, the labor sources said.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Arizona mining fight pits economy, EVs against conservation,
culture      urn:newsml:reuters.com:*:nL1N2LO28S
EXCLUSIVE-Biden campaign tells miners it supports domestic
production of EV metals      urn:newsml:reuters.com:*:nL1N2HD0RW
Biden admin still undecided on Minnesota copper mine project   
 urn:newsml:reuters.com:*:nL1N2MS282
Mining investor TechMet closes second funding round at $120
million     urn:newsml:reuters.com:*:nL1N2M81QD
EXCLUSIVE-U.S. looks to Canada for minerals to build electric
vehicles     urn:newsml:reuters.com:*:nL1N2LG33S
American quandary: How to secure weapons-grade minerals without
China     urn:newsml:reuters.com:*:nL5N2CA8MT
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Ernest Scheyder in Houston and Trevor Hunnicutt
in Washington; Editing by Amran Abocar and Marguerita Choy)
 ((ernest.scheyder@thomsonreuters.com; Twitter: @ErnestScheyder;
+1-713-210-8512; Reuters Messaging:
ernest.scheyder.thomsonreuters.com@reuters.net))