Electric vehicle agenda to demand huge expansion of domestic mining

[Editor's note: This story originally was published by Real Clear Energy.]

By Rich Nolan
Real Clear Energy

In a span of just 24 hours, two major announcements signaled a turning point for electric vehicles (EVs). First, President Biden announced that the entire federal vehicle fleet – some 650,000 cars and trucks – would be moving to made-in-America EVs. A day later, General Motors announced its intention to stop producing combustion-engine cars by 2035. The pivot to EVs has become a sprint.

This moment offers both the potential for significant progress in reducing emissions and the opportunity for the U.S. to win the accelerating race for the future of the auto industry and the millions of jobs it supports. But if we don’t get serious about building the domestic-mineral supply chain to support it, it’s a race we could lose.

Those who assume that the U.S. is ahead in the pivot to EVs should pay closer attention. GM’s ambitions, the impending arrival of EV newcomers like Rivian, and the onward march of Tesla all camouflage an undeniable reality: the EV future is being shaped and built in China.

Benchmark Minerals Intelligence, a consultancy focused on the EV supply chain, reported that of the world’s 142 battery megafactories in the pipeline, 107 will call China home; a startling 53 are already active and in production. Just nine are in the pipeline for the U.S.

Battery production could prove to be an irresistible magnet for the global auto industry, and China is counting on it. China’s dominance of lithium-ion battery production is a direct result of a strategic bet on the mineral supply chain. From mining to refining of the essential inputs of lithium-ion batteries – lithium, cobalt, nickel, and graphite – China is the unrivaled leader.

Catching up to China will mean building an EV supply-chain strategy from the mine up. The U.S. has the resources to do it. What we need now is a commitment to prioritize the production and a mines-to-markets strategy that enables us to build infrastructure for the electrification of transportation that will support American industry and millions of American workers.

Will the electric vehicle agenda demand a huge expansion of domestic mining?

There’s no time to lose. Demand for the minerals and metals of the EV revolution is poised to soar. The World Bank projects that demand for some key metals like lithium and nickel is expected to jump 500 percent by midcentury. We will need to produce the same amount of copper – so essential to the electrification of various industries – in the next 25 years as humanity has produced in the last 5,000.

Despite trillions in mineral reserves, the U.S. has drifted into an alarming mineral-import reliance that has become a glaring economic and national security vulnerability. A report from the U.S. Geological Survey confirms that we are now completely import-reliant for 17 key minerals and 50 percent or more import-reliant for 29 others. Reversing this situation and reshoring critical mineral production will require balanced policy that encourages production and robust domestic demand.

The U.S. must address the unnecessary permitting delays that have hobbled mining investment. Mine permitting in the U.S. takes on average seven to 10 years, and often longer. In Canada and Australia, nations with comparably robust environmental standards, permitting is achieved in just two to three years. Effective reform includes achievable, commonsense steps like increasing coordination and reducing duplication between federal and state agencies, setting and adhering to schedules for permit review, and transparently tracking progress to provide accountability.

In addition, like China, the U.S. must fully recognize that mining policy is energy policy. The Department of Energy has taken an important step in this direction by making mining projects for key metals eligible for loan guarantees that reduce the cost of capital and encourage investment into domestic projects. Electrification of transportation will require expansion of mineral production at a scale and speed that the world is only beginning to comprehend. Building domestic supply in phase with mounting demand is responsible, forward-looking policy.

Finally, we must encourage U.S. manufacturers to source their materials domestically. “Made in America,” a priority for the Biden administration, must include “mined in America.” Providing smart incentives for manufacturers to use domestically (and responsibly) produced materials will not only support U.S. jobs and reduce mineral-import reliance but also provide the necessary signals to drive investment in sustainable domestic-supply chains.

Building the industries of tomorrow at home, with community-supporting American jobs, is the right path to enduring economic recovery. Building a robust EV supply chain will ensure that the next century for the U.S. auto industry is as dynamic as the last. This is a competition we can and must win – and the U.S. mining industry is ready to provide the foundation to do it.

Rich Nolan is president and CEO of the National Mining Association.

[Editor's note: This story originally was published by Real Clear Energy.]