Tag Archives: Lithium

U.S. faces tough choices in 2022 on mines for electric-vehicle metals

By Ernest Scheyder

(Reuters) – The United States has enough reserves of lithium, copper and other metals to build millions of its own electric vehicles (EVs), but rising opposition to new mines may force the country to rely on imports and delay efforts to electrify the nation’s automobiles.

The tension underscores the dilemma facing the United States going into 2022, a year in which U.S. policymakers hope to see groundbreakings on a raft of EV manufacturing facilities from Ford Motor Co, General Motors Co and others.

President Joe Biden signaled earlier this year he prefers to rely on allies for EV metals, part of a strategy designed to placate environmentalists. That means U.S. automakers will find themselves competing with international rivals for supply amid the global rush to electrification.

U.S. metals imports, though, could boost greenhouse gas emissions by increasing shipping from overseas mines to processing facilities, most of which are in Asia, thus abrogating part of the rationale behind building more EVs.

A Reuters analysis found that proposed U.S. mining projects could produce enough copper to build more than 6 million EVs, enough lithium to build more than 2 million EVs and enough nickel to build more than 60,000 EVs.

The estimates are based on the volume of minerals used to make a Tesla Inc Model 3, the world’s most popular EV, according to a study by Benchmark Mineral Intelligence. Other types of EV use different amounts, depending on design.

“If we don’t start getting some mining projects under construction this coming year, then we will not have the raw materials domestically to support EV manufacturing,” said James Calaway, executive chairman of ioneer Ltd.

Biden in August issued an executive order aimed at making half of all new vehicles sold in 2030 electric.

Washington so far has offered confusing guidance to its mining industry. For example, the U.S. Fish and Wildlife Service is poised to label a rare flower found on a handful of acres at ioneer’s Nevada lithium mine site as endangered, a step that could impede permitting. At the same time, the U.S. Department of Energy is deciding whether to lend the company more than $300 million to build the mine.

OPPOSITION

Other proposed mines face opposition from indigenous groups, ranchers or environmentalists, underscoring the broader tension in the United States as resistance to living near a mine clashes with the potential of EVs to mitigate climate change.

In early 2022, federal judges are set to rule in two separate cases as to whether mine approvals granted by former President Donald Trump to Lithium Americas Corp and Rio Tinto Plc should be reversed.

In Minnesota, state regulators are weighing whether permits issued to PolyMet Mining Corp, which is controlled by mining giant Glencore Plc, should be revoked or reissued. PolyMet’s mine would become a major nickel producer just as the only U.S. nickel mine is set to close by 2025.

In North Carolina, Piedmont Lithium Inc’s failure to keep local landowners abreast of its development plans may cost the company necessary local zoning approvals.

Biden himself took steps in October to block Antofagasta Plc’s Twin Metals copper and nickel mine project in Minnesota for 20 years. The proposed underground mine would have become a major U.S. supplier of copper for EVs, which use twice as much of the red metal as vehicles with internal combustion engines.

Despite that step, the White House has been working to highlight its support for certain EV mining projects, including Lithium Americas’ proposed lithium mine – despite Native American opposition – and a California geothermal lithium project funded in part by GM.

The administration also touted a Tesla lithium supply deal with Piedmont, even though that arrangement was put permanently on hold earlier this year.

Many of the mining projects have strong support from labor unions, a constituency that the president has worked to cultivate and one sometimes at odds with environmental groups hoping to block new mines.

Biden’s EV goal “means good-paying union jobs for working people in responsible mining operations that will both supply battery minerals and protect the environment,” said Tom Conway, head of the United Steelworkers, a union that represents some U.S. miners.

(Reporting by Ernest Scheyder in Houston; Editing by Matthew Lewis)

To go electric, America needs more mines. Can it build them?

By Ernest Scheyder

(Reuters) – Last September, in the arid hills of northern Nevada, a cluster of flowers found nowhere else on earth died mysteriously overnight.

Conservationists were quick to suspect ioneer Ltd, an Australian firm that wants to mine the lithium that lies beneath the flowers for use in electric vehicle (EV) batteries.

One conservation group alleged in a lawsuit that the flowers, known as Tiehm’s buckwheat, were “dug up and destroyed.” The rare plant posed a problem for ioneer because U.S. officials may soon add it to the Endangered Species List, which could scuttle the mining project.

Ioneer denies harming the flowers. Their cause of death remains hotly debated – as does the fate of the lithium mine.

The clash of environmental priorities underpinning the battle over Tiehm’s buckwheat – conservation vs. green energy – is a microcosm of a much larger political quandary for the new administration of President Joe Biden, who has made big promises to environmentalists as well as labor groups and others who stand to benefit by boosting mining.

To please conservationists, Biden has vowed to set aside at least 30% of U.S. federal land and coastal areas for conservation, triple current levels.

But that aim could conflict with his promises to hasten the electrification of vehicles and to reduce the country’s dependence on China for rare earths, lithium and other minerals needed for EV batteries. The administration has called the reliance on China a national security threat.

The administration will be forced into hard choices that anger one constituency or another.

“You can’t have green energy without mining,” Mark Senti, chief executive of Florida-based rare earth magnet company Advanced Magnet Lab Inc. “That’s just the reality.”

Rare earth magnets are used to make a range of consumer electronics as well as precision-guided missiles and other weapons.

Two sources familiar with White House deliberations on domestic mining told Reuters that Biden plans to allow mines that produce EV metals to be developed under existing environmental standards, rather than face a tightened process that would apply to mining for other materials, such as coal.

Biden is open to allowing more mines on federal land, the sources said, but won’t give the industry carte blanche to dig everywhere. That will likely mean approval of mines for rare earths and lithium, though certain copper projects – including a proposed Arizona copper mine from Rio Tinto Plc opposed by Native Americans – are likely to face extra scrutiny, the sources said.

The White House declined to comment for this article.

DIGGING NEEDED

Demand for metals used in EV batteries is expected to rise sharply as automakers including Tesla Inc, BMW and General Motors plan major expansions of EV production. California, the biggest U.S. vehicle market, aims to entirely ban fossil fuel-powered engines by 2035.

Biden has promised to convert the entire U.S. government fleet – about 640,000 vehicles – to EVs. That plan alone could require a 12-fold increase in U.S. lithium production by 2030, according to Benchmark Minerals Intelligence, as well as increases in output of domestic copper, nickel and cobalt. Federal land is teeming with many of these EV metals, according to the U.S. Geological Survey.

“There is no way there’s enough raw materials being produced right now to start replacing millions of gasoline-powered motor vehicles with EVs,” said Lewis Black, CEO of Almonty Industries Inc, which mines the hardening metal tungsten in Portugal and South Korea.

Despite that shortage, proposed U.S. mines from Rio Tinto Ltd, BHP Group Ltd, Antofagasta Plc, Lithium Americas Corp, Glencore Plc and others are drawing stiff opposition from conservation groups. The projects would supply enough lithium for more than 5 million EV batteries and enough copper for more than 10,000 EVs each year.

Mining companies insist that federal lands can still be protected while the U.S. boosts output of minerals needed to accelerate the EV transition.

Earthworks and other environmental groups are now lobbying automakers to only buy metals from mines deemed environmentally friendly by the Initiative for Responsible Mining Assurance (IRMA), a nonprofit group. BMW, Ford Motor Co and Daimler have agreed to abide by IRMA guidelines, and other automakers may follow suit.

PROJECTS AT RISK

Biden has not weighed in on two controversial copper mine projects in Minnesota’s environmentally-sensitive Boundary Waters region from PolyMet Mining Corp and Antofagasta Plc’s Twin Metals subsidiary.

Tom Vilsack – the secretary of agriculture, the department that oversees the Boundary Waters – has in the past opposed the Twin Metals project, arguing that it threatened wilderness and marshlands.

Deb Haaland, the new secretary of interior, the department that controls most federal land, previously voted for a bill that would have banned copper sulfide mining in northern Minnesota. That bill, authored by U.S. Representative Betty McCollum, a Minnesota Democrat, will be reintroduced this month, her aides told Reuters.

Conservationists nonetheless remain concerned that the appeal of copper for EVs and other renewable energy devices may help the mines ultimately get approved.

“If these were coal mines, I’d feel much more comfortable knowing they wouldn’t be approved,” said Pete Marshall of Friends of the Boundary Waters.

WORRIES ABOUT WILDLIFE, SACRED GROUNDS, FLOWERS

In Arizona, Biden promised Native Americans – whose votes helped him win the battleground state – that they would have a “seat at the table” if he defeated Trump. But he has yet to meet with them to discuss worries that Rio Tinto’s Resolution proposed copper mine would destroy sacred sites considered home to religious deities.

Other controversial projects include Idaho’s Stibnite proposed mine, from John Paulson-backed Perpetua Resources Corp, which is under fresh scrutiny by U.S. Environmental Protection Agency staff over fears it would pollute Native American fishing grounds. The mine would produce gold and antimony, used to make alloys for EV batteries.

In Nevada, the Department of Wildlife worries that the lithium mines planned by ioneer and Lithium Americas would harm trout, deer and pronghorn habitats. The Lithium Americas mine received federal approval last month, but ranchers have sued the U.S. government to reverse that decision.

“Renewable energy and electric cars aren’t green if they destroy an important habitat and drive wildlife extinct,” said Kelly Fuller, of the Western Watersheds Project, which opposes the Lithium Americas project.

In Nevada, the death of the Tiehm’s buckwheat flowers at ioneer’s proposed mine site remains a point of contention. The U.S. Fish and Wildlife Service has theorized that thirsty squirrels may have gnawed the roots of more than 17,000 flowers for water amid a drought in the state.

The Center for Biological Diversity, which opposes the mine, said there was evidence that humans destroyed the flowers. “The targeted nature of the damage, combined with the lack of feces, pawprints, hoofprints, or other evidence of wildlife suggest human involvement,” the group said in a court filing.

The Fish and Wildlife Service is now set to rule this summer on whether the flower is an endangered species – a designation that would prevent development on much of the land ioneer is trying to mine.

Ioneer has hired scientists to move the flowers to a new site, though it’s unclear if that process will succeed. “We can extract this lithium and also save this flower,” said James Calaway, ioneer’s chairman.

(Reporting by Ernest Scheyder; additional reporting by Trevor Hunnicutt; editing by Amran Abocar and Brian Thevenot)

U.S. faces hurdles in push to build electric vehicle supply chain

One of Albemarle's lithium evaporation ponds reflects the sky at its facility in Silver Peak, Nevada, U.S., January 9, 2019. REUTERS/Ernest Scheyder

By Ernest Scheyder

(Reuters) – The United States faces stiff challenges as it moves to create its own electric vehicle supply chain, industry analysts say, with the extent of the country’s metal reserves largely unknown and only a few facilities to process minerals and produce batteries.

Legislation making its way through the U.S. Congress aims to help offset those gaps, but China remains the global EV sector leader, a dominance seen by some as difficult to supplant. Even some U.S. mines are caught in China’s orbit, with domestic production of so-called rare earth minerals reliant on Chinese processing and now caught up in the U.S.-China trade conflict.

“China has a huge head start,” said Gavin Montgomery, a battery and mining analyst at the Wood Mackenzie consultancy. “They’ve just been at this a lot longer than the rest of the world.”

U.S. Senator Lisa Murkowski, chair of the Senate’s Energy and Natural Resources Committee, this month introduced the American Mineral Security Act to help streamline regulation and permitting requirements for the development of mines for lithium, graphite and other EV minerals.

The bipartisan legislation, which seeks in part to codify a late 2017 executive order on U.S. mineral development by President Donald Trump, gets its first hearing before Murkowski’s committee on Tuesday.

“We have an opportunity here to move ourselves from this position of vulnerability in terms of reliance on others for our minerals, our EV supply chain,” said Murkowski, an Alaska Republican.

But just how much cobalt and other minerals used to make EVs are actually in the United States is anyone’s guess, as the nation has conducted little by way of a national survey.

Current estimates from the U.S. Geological Survey rely on corporate annual reports, historical data from the U.S. Bureau of Mines and other sources, according to USGS spokesman Alex Demas.

Finding out the mineral composition of a particular region requires sending staff into the field to take rock samples, a timely and expensive endeavor. Murkowski’s legislation would require a nationwide reserve analysis for all minerals used to make EVs.

USGS data show, for example, that the United States has 35,000 tonnes of lithium in reserve, a figure that the agency and industry executives see as conservative.

Albemarle Corp operates the only U.S. lithium mine, a facility with the capacity to produce about 6,000 tonnes annually. According to current USGS data, that means that one mine could deplete U.S. reserves within six years.

Several lithium projects are under development across the nation, including those from ioneer Ltd, Lithium Americas Corp and Piedmont Lithium Ltd. Each aims to produce at least 20,000 tonnes of lithium per year, according to corporate presentations.

Beyond physical reserves, concerns about the lack of U.S. processing facilities are also cause for worry.

China controls about 85 percent of the globe’s cobalt sulfate processing, according to WoodMac data. Cobalt sulfate is the version of the metal used in lithium-ion batteries.

eCobalt Solutions Inc aims to produce 1,500 tonnes per year of cobalt once its Idaho project opens, though that is only enough of the metal to make about 300,000 EVs.

The United States does have some processing capability. Albemarle and rival Livent Corp process some lithium domestically. Syrah Resources Ltd mines graphite in Mozambique and ships it to Louisiana for processing for use in making battery parts.

The United States is also reliant on China for rare earth processing, a group of 17 elements used to make electric vehicles and consumer electronics.

California’s Mountain Pass mine, owned by MP Materials, must pay a 25 percent tariff to ship rare earths it extracts from its California mine to China for processing, the collateral damage in the ongoing U.S.-China trade war.

“All we seek is a level playing field to compete as a low-cost producer so we can help establish an EV supply chain in the United States,” said James Litinsky, co-chairman of MP Materials.

But those facilities tend to be the exception and investors so far have been wary of funding new U.S. projects in part due to China’s dominance, with concerns that any investment would be difficult to recoup.

“Ultimately, these projects have to stack up economically, even if U.S. politicians make it easier to get permitting,” said WoodMac’s Montgomery.

 

(Reporting by Ernest Scheyder; Editing by Dan Grebler and Susan Thomas)