MARIETTA, Ohio — As Ohio grows into a manufacturing hub for electric cars and the lithium-ion batteries that power vehicles, automakers need a secure supply of raw materials to keep assembly lines running. But that will require minerals and metals for batteries to be built at the proposed Honda plant and other factories to be mined and processed primarily in the United States, rather than being imported from China and Russia.
There are currently many questions surrounding the supply chains for battery metals such as lithium, cobalt, nickel and copper. China, the world’s leading maker of electric cars, has a firm grip on the global supply of battery metals, which was shaken earlier this year during the confrontation over Taiwan and a few years earlier during tense trade negotiations with China. US automakers have every reason to fear that China could use battery metals as a geopolitical weapon to gain the upper hand in global markets.
As OPEC tightens the screws again for US energy consumers and cuts production to boost oil prices, there is a sense that the geopolitics of the metals trade required for the energy transition could be as unpredictable as our dependence on the global oil cartel.
Now it’s time to ask: What are the most useful things the US government can do to strengthen our minerals and metals supply chains? Do we continue to rely on warring countries like China and Russia for materials for clean energy technologies, weapon systems and consumer products? Or are we making greater use of our own abundant resources in the United States?
The obvious answer is that we need to start producing more, not only to strengthen our supply chain security, but also to help our economy create thousands of well-paying mining and manufacturing jobs, worth millions of dollars in federal and state coffers and reduce CO2 emissions and allow America to become more independent of China and Russia.
The International Energy Agency (IEA) says in a report that battery metals and minerals production “needs to expand 10-fold to meet projected critical minerals needs by 2030,” according to a recent article on mining.com. This requires the development of hundreds of new mines.
There is currently only one operating lithium mine in the United States. A nickel mine, a rare earth mine, a cobalt mine. And according to the US Geological Survey, many copper mines are depleted and running out of resources.
The sticker shock for lithium has already arrived. Fueled by the explosive growth of electric vehicles, particularly in China, the global price of lithium has surged 678% over the past two years — and is likely to accelerate as the transition to electrified transportation progresses. The IEA projects that demand for lithium will increase 40-fold from 2020 levels, necessitating the addition of 50 new lithium mines worldwide. But new mines aren’t opening fast enough, and auto industry experts are warning that lithium shortages could derail electric vehicle (EV) production just as it’s getting started.
This realization convinced the White House of the need for government action. Earlier this year, President Joe Biden invoked the Defense Production Act to provide loan guarantees, tax breaks and other government support for the creation of new domestic battery metal mines. The Inflation Mitigation Act offers electric vehicle buyers a $7,500 tax break if parts of the car’s “critical battery materials” are used [are] extracted or processed in the United States,” reports Utilitydive.com.
But building a secure supply chain doesn’t happen overnight. The United States “has an estimated $6.2 trillion in undeveloped natural resources,” according to Value Walk Premium, but it has been easier to import commodities — even vital battery metals — than it has been to build new mines in the country. It takes ten years or more just to get a federal permit to open a mine in the US – and there are so many hurdles that companies often do not get a permit and instead develop new mines in other countries.
Congress needs to streamline our government’s mine permitting process. A bipartisan effort to eliminate red tape in approving infrastructure improvements — not just for mines, but for LNG plants and oil and gas pipelines — is seeping through the Senate. Adopting the measure would make supply chains significantly safer.
Much depends on the production of electric cars, SUVs, pickups and trucks. Millions of vehicles will be sold over the next few years, and many will be built with Ohio-made batteries. It’s time we began making better use of the natural resources in our nation’s own backyard.
Robert W. Chase served as Chair of the Petroleum Engineering and Geology Department at Marietta College for 37 years and resigned from that position in 2015. He is a registered professional engineer in the state of Ohio.
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