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National View: Clean energy, electric vehicles can't happen without copper, other minerals

From the column: "No 'Made in America' parade is going to march unless there’s a swift and decisive commitment to 'Mined in America.'"

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Now is the time to ask: How important is the mining of minerals and metals in the United States to the advancement of clean-energy technologies? As demand for clean-energy metals soars, and as global supply-chain challenges only grow more pronounced, the answer is exceedingly clear. Building a domestic mineral supply chain is foundational to the energy transition and electric-vehicle revolution.

Geopolitical considerations are an important dimension of the need for U.S. mobilization in the minerals and metals space. U.S. mineral import reliance is at alarming levels, and China is now the dominant producer of half of the more than 30 minerals the U.S. government has deemed critical to our economic and national security. Overreliance on a geopolitical rival for fuel or critical materials is not a place we want to be. Just ask the E.U. as it deals with Russian dominance of the European gas market. But even putting aside grave geopolitical considerations, soaring commodity prices and the threat they pose to clean energy deployment are reasons enough for the U.S. to fully engage in mineral supply chains.

Consider what is happening with the metals used for lithium-ion batteries, the enabling technology for electric vehicles. Lithium prices jumped a staggering 437% in 2021, and they continue to rise this year. New battery manufacturing capacity is coming online far faster than miners can open new mines and bring production to market. The result is a tear in the lithium market that is showing no signs of slowing down.

What’s happening with lithium, while extreme, is precisely what could happen with so many other metals essential to the energy transition. From the copper and nickel in Northeastern Minnesota to rare earth minerals, there’s well-founded concern that the world is financing far greater demand for these minerals and metals than their supply. New mining projects are not coming online at nearly the volume or speed needed to keep up with the accelerating pivot to green energy.

The International Energy Agency predicted in a landmark study last year that demand for some key metals, like lithium, could grow 40-fold by 2040. The mining industry is woefully ill-suited to keep up with that kind of demand. Mining projects are notoriously complex and time-intensive. While a new battery mega factory that can crank out batteries for millions of new electric vehicles can be built and begin operation in just two years, the mines needed to supply it take far, far longer. In fact, from inception to completion, major new mining projects in the U.S. take 17 years on average to bring to market.

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The machines of the green revolution have an acute materials problem, and, as we’ve seen, supply challenges can upend economies. This past year car dealerships were left empty when chip shortages deeply constrained new car production. The same kind of scenario could be coming for solar panels, wind turbines, and electric vehicles, as the materials needed for their production simply don’t materialize at scale.

The American manufacturing renaissance the Biden administration envisions, led by the auto sector, is being built on a supply chain that for all intents and purposes doesn’t exist. No “Made in America” parade is going to march unless there’s a swift and decisive commitment to “Mined in America.”

Counting on global materials production to meet demand is a recipe for failure. As the International Energy Agency implored, mineral-producing nations must lean into the challenge. And, despite our growing import reliance, the U.S. is rich in mineral resources. From lithium to nickel, copper, rare earths, and even cobalt, the U.S. has vast reserves. What we need is the policy commitment to ensure we can produce them and do so quickly. The U.S. has world-leading mining environmental and labor standards; what we must do is ensure we use those standards to encourage responsible production, not block it.

The world cannot afford for the U.S. to only be a materials consumer during the energy transition. We must also become a leading producer. Instead of depending on, or hoping for, imports from foreign-trade adversaries like China, we must help produce the materials that are the building blocks for the emissions-free technologies needed to win the climate fight. American manufacturing policy and energy policy should rest on the shoulders of American mining policy.

Dan Ervin is a finance professor at Salisbury University in Maryland who writes on energy economics and policy with a focus on nuclear power.

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Dan Ervin

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