February 13, 2024
The United States faces deep, ongoing vulnerabilities in its mine...
Last year had its ups and downs for the mining industry. There was a lot of talk about securing our mineral supply chains, which was followed by a few modest efforts in Washington, D.C., to realize that vision. What was left undone in 2023 however will haunt 2024 (and beyond) as mineral demand is expected to outpace supplies in the continued transition toward advanced energy.
In 2024, the U.S. needs to take tangible actions to both achieve the administration’s green energy ambitions and wean our mineral supply chains off China. These efforts will be further complicated by the U.S. elections and continued geopolitical issues around the world.
Though minimal, Congress did make headway on advancing reforms to our energy-permitting process. The Fiscal Responsibility Act signed into law in June 2023 pushed forward modest, common-sense permitting reforms that, among other things, designated a “lead agency” authority to manage other federal agencies also involved in permitting a new mine. When implemented, these efforts will help to streamline environmental reviews and eliminate duplication.
Lithium Americas’ Thacker Pass, which is expected to be one of the world’s largest lithium projects, received its final permits. It is an example of one of the very few projects to make it through the permitting labyrinth. Once production begins, this $2.3 billion project is estimated to produce 80,000 tons of battery-quality lithium carbonate per year. This will improve America’s position in the electric vehicle (EV) market, helping the U.S. advance efforts to meet its climate commitments.
Our mineral import dependence reached an all-time high in 2023, pushing our supply chain stability to an all-time low. China deepened our supply chain instability by implementing restrictions on exports of an increasing number of key minerals, most notably, three minerals essential to the production of EV batteries: graphite, gallium and germanium. To add fuel to the fire, the Biden Treasury Department issued new tax credit guidance excluding mine production costs, dealing a setback to developing a domestic supply of minerals.
The Biden Interagency Working Group on Mining Reform published a long-awaited report that called for added red tape as well as new taxes and fees on U.S. mining. The administration also took notable steps to unnecessarily withdraw vast stretches of public lands from energy development and deny permits for promising domestic mines. To make matters worse, the Biden Administration spent considerable time solidifying critical minerals agreements abroad – including with the European Union, Japan, the United Kingdom and others – instead of focusing on domestic mining. The State Department also opened talks with Zambia and the Democratic Republic of the Congo about U.S. investment in mineral production in each respective country. The current administration claims to want to strengthen American mining but has done little to support that claim.
The U.S. will face all the same challenges it faced in 2023 with added complications from the upcoming election and continued geopolitical challenges in nearly every region of the world. This is happening amidst a global increase in demand for minerals to meet net-zero commitments according to the International Energy Agency and an expected shortfall in mining investments. According to Benchmark Minerals Intelligence more than 300 new mines will be needed.
This need for new mines comes as some governments are nationalizing mineral production and/or shutting down operating mines. The U.S. should focus on laying the foundation for a responsible and growing mining industry right here at home. Doing so addresses our import dependence, helps insulate the country from geopolitical uncertainty and strengthens our economy and labor markets. U.S. miners do this job according to the highest environmental, labor, and safety standards in the world.
As 2024 begins, policymakers in D.C. should encourage federal agencies to focus on domestic mineral projects versus looking overseas. Finalizing additional permitting reform is critical to ensuring we can get promising new mining projects approved. Failure to do so will leave us another year behind, making the U.S. more import reliant on minerals. It will also send U.S. taxpayer dollars and investment overseas leaving a gaping hole in our economy and labor markets. 2024 is the year to restore faith in American mining.