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The Biden administration is considering a plan to import the bulk of the materials needed to build electric vehicles and the batteries that power them instead of mining them domestically — a nod to environmental groups that make up a key part of the Democratic constituency, according to a report.
The plan under consideration would entail buying the materials from overseas markets and allow US manufacturers to assemble them into batteries or electric vehicles in an effort to create American jobs but still remain in the good graces of environmental groups, Reuters reported on Tuesday.
The plan would allow the US to reduce its dependence on China for the materials, the report said, but would be a blow to US miners.
“It’s not that hard to dig a hole,” an administration source told Reuters. “What’s hard is getting that stuff out and getting it to processing facilities. That’s what the US government is focused on.”
The Biden administration’s approach differs substantially from that of former President Donald Trump, who preferred boosting the ability of domestic mines to extract the materials by streamlining some environmental procedures.
The “federal strategy lays out a blueprint for America to once again be a leader in the critical minerals sector,” then-Interior Secretary David Bernhardt said in a statement in June 2019.
“As with our energy security, the Trump Administration is dedicated to ensuring that we are never held hostage to foreign powers for the natural resources critical to our national security and economic growth. The Department will work expeditiously to implement the President’s strategy from streamlining the permitting process to locating domestic supplies of minerals,” he continued.
President Biden signed an order in February directing federal agencies to look for vulnerabilities in the supply chains for equipment needed in the battle against coronavirus but also for the materials needed to build large-capacity batteries for electric vehicles.
“While the US is a net exporter of electric vehicles, we are not a leader in the supply chain associated with electric battery production. The US could better leverage our sizeable lithium reserves and manufacturing know-how to expand domestic battery production,” the order said.
The US Commerce Department is putting together a conference next month to attract more electric vehicle manufacturing to the US as part of the administration’s commitment to boost the domestic electric vehicle market with tax credits in the proposed infrastructure package.
Under the Biden administration’s approach, the US would rely on Canada, Australia and Brazil to produce the majority of the raw materials while American businesses would ramp up competition to turn those materials into computer chips and batteries, Reuters reported.
Nailing down the supply chain for these materials doesn’t require the US to be their primary producer, the report said, citing a source.
According to figures from the World Bank, the US imports of minerals in 2018 relied mainly on Canada, China, Mexico, Brazil and South America.
But labor leaders, many of whom support Democratic candidates, said they don’t want their workers left out of a lucrative job market.
“Let’s let Americans extract these minerals from the earth,” Aaron Butler of United Association Local 469 union, which does work for Rio Tinto Ltd.’s proposed copper mine project in Arizona and endorsed Biden in the election, told Reuters.
“These are good-paying jobs.”
Unionized labor skills like electrical and concrete work can help build the processing plants for the minerals, the report said.
The Biden White House fears that environmentalists and some Democratic lawmakers would place hurdles on domestic mines to produce these materials and endanger the future market for electric vehicles.
“It rings hollow when I hear everyone use this as a national defense argument, that we have to build new mines to have a greener economy,” Rep. Betty McCollum (D-Minn.), who has introduced legislation that would block a copper mine on federal lands in Minnesota, told Reuters.
But critics of the plan argue that the administration will be unable to fully realize the market for electric vehicles without help from US mines.
“These ‘not-in-my-backyard’ extremists have made clear they want to lock up our land and prevent the mining of minerals,” Rep. Lauren Boebert (R-Colo.) said at a House hearing earlier this month.
Rich Nolan, president of the National Mining Association, said the administration must view the country’s mines as a partner.
“The U.S. took a positive step in this direction when the U.S. Dept. of Energy recently launched the Division of Minerals Sustainability. But if we want to seriously compete in the global EV market, the U.S. must give mining and the mineral supply chain the attention they deserve. We have the tools to win this race, but only if we make smart policy decisions today to help U.S. manufacturing better compete in the future,” Nolan said in a statement in March.
The administration’s initiative would hurt smaller mines, but larger companies that operate mines in other countries could benefit.
“We can no longer push the production of the products we want to places we cannot see and to people we will never meet,” Mckinsey Lyon of Perpetua Resources Corp., which is seeking to develop Idaho’s Stibnite mine to produce gold and antimony used to make EV battery alloys, told Reuters.
In April, the US government became the largest shareholder in TechMet, a mining investment firm that controls a Brazilian nickel project, a tungsten mine in Rwanda and is a major investor in a Canadian battery recycler, the report said.
Washington is also ramping up research funds for Canadian cobalt projects and a rare earth project in Malawi, among others.
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