Critical Minerals Will Be Increasingly Vital for National Security and Economic Competitiveness
Danielle Woodring
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With an extensive background in field geology, science policy, geological mapping and active tectonics, Danielle Woodring has built a career at the intersection of science and policy. Her love of geology as a logical discipline is matched by a real passion to help influence policy that is shaping up to be vital for U.S. economic competitiveness and national security.
Q: How would you define critical minerals and the role they play in meeting future energy needs?
A: The mainstream notion that certain minerals and materials are critical to our economy and national security is relatively new. It wasn’t that long ago that no one in Washington was talking about this. Now, everyone lights up when you casually mention that you work on critical minerals issues. On a technical note, in 2020 the U.S. Congress officially defined critical minerals as nonfuel minerals or mineral materials essential to our economic or national security that have a supply chain vulnerable to disruption.
That being said, I believe all mineral resources are critical because they are the key building blocks for modern society, from advances in technology to advances in energy — but of course, the mineral resources that are getting the most attention now are those that are essential to a secure energy future and for national defense.
The U.S. Geological Survey (USGS) publishes annual minerals commodity summaries documenting global production and U.S. reliance on those we must import. For example, the U.S. is 95% reliant on other nations for rare earth elements, which are used in industries ranging from medical technology and defense to telecommunications and electric vehicle manufacturing. There are about 50+ minerals that the USGS deems to be critical. In 2023, the Department of Energy also carved out a group of 18 materials that it calls “the electric eighteen” that have a high supply chain risk and are important for the energy sector and energy production.
Bolstering minerals and materials supply chains is now a global priority. The International Energy Agency has published statistics that predict that global demand for clean energy technologies will translate into an exponential 13x demand for lithium, 8x for graphite and 7x for nickel. In the power industry, the demand for new and upgraded transmission and distribution infrastructure will require mining and production of an additional 120 million metric tons of aluminum and copper. All that means we’re going to need at least 300 new hard rock mines to open and come online just to meet worldwide demand for these materials.
Q: What recent efforts have the U.S. and allies made to diversify and onshore critical minerals supply?
A: This has been a priority of the past two presidential administrations and both political parties. The Trump Administration used the Defense Production Act as a means to support domestic production of the only U.S. source of rare earth elements at MP Materials’ Mountain Pass Mine in California.
The Biden Administration went the legislative route with passage of the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA). These laws use various carrots and, for the first time, sticks to incentivize and motivate extraction, processing, manufacturing and recycling of materials that support production of clean energy.
The IRA, for example, provides the first “sticks” in the form of clean vehicle tax credits, which include minerals sourcing provisions offered only to companies that source battery-grade minerals from countries that have free trade agreements with the U.S. Its passage incentivized the downstream sector to invest in the upstream and pushed for supply chain transparency. For example, automakers are now investing in mining and processing of minerals that are needed for lithium-based electric vehicle batteries. Only weeks after passage, Tesla moved quickly to take advantage of the incentives and is beefing up production at a battery plant in Texas, versus one in Germany.
We hear lots of talk about onshoring of critical mineral supply chains, but the belief is that we cannot do it alone. This is a multinational effort that requires the involvement of our network of trusted allies and partners. The Sustainable Critical Minerals Alliance includes Australia, Canada, France, Germany, Japan, the U.K. and the U.S. The Minerals Security Partnership is another effort with designated allies that is spearheaded by the U.S. State Department. This partnership works to funnel funding into sustainable and secure minerals supply chain projects around the world with a goal of implementing projects with high environmental and social standards.
Q: What is the role of a circular economy and how can we best utilize battery and minerals recycling to satiate our need for new minerals?
A: This is an exciting part of our transition to a minerals-based economy because it effectively shifts our concept of energy security. In the next era of minerals-based energy usage and consumption, the minerals can be reprocessed and recycled, allowing batteries to be reused and repurposed almost in perpetuity.
Minerals and especially the minerals in batteries can be almost entirely recovered through hydrometallurgical and pyrometallurgical processing. That’s why it makes no sense for these used technologies to sit in landfills, embedded in consumer products or in degraded car batteries.
Some forecasters predict that about 500,000 EVs will need new batteries soon, so the volume of materials that can be recycled is about to surge. Now, recyclers mainly recycle manufacturing scrap and recalled EV batteries, since most EV batteries have not yet reached the end of their useful lives. But give it some time. When the EV batteries on the road today reach their end of life, many companies will then have the means to recover these vital minerals at economic scales. Furthermore, not many North American recyclers produce battery-grade precursor materials for cathode and anodes. Hence, any recycled material manufactured in the U.S. has to be exported for further conversion into battery precursors and electrode-active materials. This poses a need for investment in this vital midsection of the minerals supply chain.
To reduce our exposure to supply chain disruptions, we should build up capacity to produce black mass by dismantling and shredding batteries. This is the stage at which critical materials such as lithium, nickel and cobalt can be extracted. The IRA attempts to address this through production tax credits to offset the costs of taking battery materials all the way from black mass to usable compounds. The IRA also provides investment tax credits for companies that want to build new facilities or refurbish old facilities with new equipment. There are also millions of dollars in grants and loans available to battery recycling companies via the Department of Energy.
The batteries in EVs present an opportunity to not only solve a waste issue, but also help to maximize smaller domestic reserves of key mineral commodities. This provides for a significant step forward in creating a circular minerals economy, because it will help reduce our reliance on other countries and mitigate some of the environmental and human rights issues associated with mining virgin minerals.
The ongoing energy transformation is supercharging demand for lithium, cobalt, manganese, nickel and graphite along with other critical minerals and metals.
