With the ongoing implementation of the bipartisan infrastructure package that Congress enacted in 2021, the United States is taking strides towards a more stable, renewable energy future – including a push for a greater share of energy from renewables and an accelerated path towards electric vehicles. However, one critical bottleneck threatens the whole enterprise: supply chains for the critical minerals needed for the projects funded by the legislation.
The coming years will see a fundamental transformation in the mining of critical minerals – particularly cobalt, nickel, and lithium. Analysts at Wood Mackenzie recently estimated that by 2050, “the energy transition could see nickel demand triple, copper demand more than double, and demand for lithium chemicals grow 700%.” It is also clear – as the International Energy Agency (IEA) and other energy experts have stated – that the United States is not presently in a position to meet demand projections.
With other countries currently controlling the vast majority of these supply chains, the United States therefore stands at a crossroads. Achieving our energy goals will require a two-fold approach: first and foremost, a wholesale rethinking of domestic permitting policies, and second, shifting towards reliable alternative critical minerals suppliers overseas.
Since the National Environmental Policy Act (NEPA) was signed into law in 1970, the domestic permitting process for mining development has become extremely complex, and therefore costly. According to the National Mining Association, it takes on average an astonishing “seven to 10 years to secure the permits needed to commence operations in the U.S.” Consequently, Congress and future administrations should prioritize efforts to advance permitting reform in order to cut red tape and permit critical minerals producers to move more quickly. Premier resource partners, such as Glencore, can point the way. The company’s planned investment in Montana’s Stillwater mining development could bring about a massive yield in domestic nickel and cobalt production, and could serve as a policy laboratory for which regulations need to be targeted for streamlining.
Further, private sector partners can help accelerate efficient investments in recycling critical minerals, allowing the United States to use its domestic mineral resources most efficiently. For example, initiatives like the Circular Electronics Partnership can facilitate coordination amongst global market players to reuse mineral inputs to EVs and other green technologies.
Simultaneously, the United States must work with overseas partners to stabilize critical mineral supply chains. Full reshoring?? is unrealistic to meet our growing demands, so Washington must connect with trusted partners to develop and access critical minerals, especially in sub-Saharan Africa, including the Democratic Republic of Congo and foreign companies poised to develop supplies in the region.
According to the IMF, the region “is already at the center of global critical mineral production,” with the Democratic Republic of Congo (DRC) along accounting for “over 70 percent of global cobalt output and approximately half the world’s proven reserves.” The same goes for copper. According to Investment Monitor, the country is the world's fourth-biggest producer of copper, which Goldman Sachs has called the "new oil". The DRC is poised to become the Saudi Arabia of the EV age. Here too, better integration with private sector partners can lead the way: Tesla already partners with Glencore in the DRC, where the company in 2023 announced plans for greater lithium extraction.
By 2040, the IEA projects more than a 40-fold increase in demand for lithium, and prices have hit record highs this year. Chile is poised to dominate the market for this key commodity: it is the second-largest global lithium producer after Australia, and alongside Argentina and Bolivia has become known as the "lithium triangle," commanding more than half of the world's proven reserves.
The U.S. government should take advantage of all the private sector expertise that has proven an effective trailblazer on both the domestic and foreign fronts. There are already some promising signs: in January 2023, the State Department issued a Memorandum of Understanding with the DRC and Zambia, which outlined the centrality of these countries in meeting growing U.S. demand for EVs. Further action, initiated by Washington and sharpened by American corporate partners, is absolutely necessary for continuing to efficiently accelerate the energy transition.
Time is of the essence. The U.S. faces a very limited timeframe to secure critical mineral supply and to build a reliable production ecosystem to achieve its infrastructure and electric vehicle goals. There’s much work to be done, but above all, it would be prudent to deepen the government’s relationships with proven companies that possess both the international footprint – and willingness to make domestic investments – that can meet the United States’ growing appetite for clean energy commodities.
Guy Caruso is a former administrator of the U.S. Energy Information Administration and a Center for Strategic and International Studies senior adviser in the Energy Security and Climate Change Program.
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