By Ernest Scheyder and Trevor Hunnicutt
US President Joe Biden will rely on allied countries to supply most of the metals needed to build electric vehicles and focus on turning them into battery parts nationally, as part of a strategy designed to appease environmentalists two administration officials with first-hand knowledge told Reuters.
The plans will be a blow to American miners who had hoped Biden would rely primarily on domestically sourced metals, as his campaign reported last fall, to help him achieve his ambitions of a less carbon intensive economy.
Rather than focusing on clearing more U.S. mines, Biden’s team is focusing more on creating jobs that turn minerals nationwide into electric vehicle (EV) battery parts, people say. .
Such a plan would help reduce the United States’ dependence on industry leader China for electric vehicle materials, while attracting unions with manufacturing jobs and, in theory, reducing unemployment caused by the pandemic.
The US Department of Commerce is holding a conference in June to attract more electric vehicle manufacturers to the country. Biden’s proposed $ 1.7 trillion infrastructure plan provides $ 174 billion to boost the domestic electric vehicle market with tax credits and subsidies for battery makers, among other incentives. The department declined to comment.
“It’s not that hard to dig a hole. What is difficult is getting this stuff out and getting it to the processing facilities. That’s what the US 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 essential raw materials needed, while also competing for higher value-added jobs transforming these minerals in computer chips and batteries, according to the two sources.
Securing the entire supply chain, from metals to batteries, does not require the United States to be the main producer of raw materials, one of the sources said.
A comprehensive strategy will be finalized after a year-long supply chain review involving national security and economic development officials.
Biden officials want to make sure the administration’s aspirations for electric vehicles are not threatened as national mines face roadblocks, the sources said, both from environmentalists and even of some Democrats.
“It rings hollow when I hear everyone using this as a national defense argument, that we have to build new mines to have a greener economy,” said US Representative Betty McCollum, a Democrat who introduced legislation. which would definitively block the Twin project proposed by Antofagasta Plc. Metals copper mine in Minnesota.
Ali Zaidi, deputy national climate adviser at the White House, said the administration was focusing on a strategy that “harnesses our national resources responsibly,” noting that this includes recycling in the supply chain.
While the US projects of small and large miners will feel the impact, the pain of any stalled project will fall disproportionately on small companies focused on the United States. 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 can’t see and people we will never meet,” said Mckinsey Lyon of Perpetua Resources Corp, which is trying to develop the Stibnite mine from Idaho to produce gold and antimony used to make EV battery alloys.
The US government in April became the major 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 is also funding research on Canadian cobalt projects and rare earth 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 its allies discover and develop lithium, cobalt, and other EV metals.
Of course, Washington is not ignoring national mining.
The US Department of Energy has given grants to help old coal mines find ways to produce rare earths. U.S. officials have also funded MP Materials Corp, which owns the country’s only rare earth mine, although it relies on Chinese processors.
But the gist of Biden’s approach is designed to avoid battles with environmentalists and save capital for other fights, according to an administrative source.
During a visit to a Ford Motor Co plant in Michigan on May 18, Biden requested government grants for new electric vehicle battery installations. He mentioned Australia’s lithium reserves during the tour, but not America’s large reserves of the key battery mineral.
Republicans say Biden’s EV plans will be impossible without more US mines.
“These ‘not in my backyard’ extremists have made it clear that they want to lock down our land and prevent mineral extraction,” US Rep. Lauren Boebert, a Republican from Colorado, told a House Natural Resources forum. Committee which was held the same day. like Biden’s visit to Michigan.
Biden’s approach comes with risks, including the anger of political supporters within the labor movement who want the administration to be open to resource extraction and the jobs that flow from it.
“Let the Americans take these minerals out of the earth,” said Aaron Butler of United Association Local 469, which works for the Resolution copper mine project proposed by Rio Tinto Ltd. in Arizona and endorsed Biden in the election. “These are good paying jobs.
Many of the skills that 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, lobbied the White House and Congress to support national projects, arguing that the coronavirus pandemic shows the importance of locating supply chains.
Biden’s White House is now scrambling to garner worker support as it tries to prove its green policies create jobs, ahead of the 2022 midterm elections that could determine whether the strategy will gain support from the government. Congress, according to two union sources familiar with the campaign
Biden officials have reached out to unions across the country to ask for specific job creation projects that the administration can take credit for, union sources said.