US President Joe Biden will rely on allied nations to provide the bulk of the metals needed to build electric vehicles and focus on transforming them nationally into battery parts, as part of a strategy designed to appease environmentalists, two administration officials with first-hand knowledge told Reuters.
The plans will deal a blow to U.S. miners who hoped Biden would rely primarily on domestically sourced metals, as his campaign reported last fall, to help him achieve his ambitions of a lesser economy. carbon intensive.
Rather than focusing on clearing more U.S. mines, Biden’s team is focusing more on creating jobs that turn minerals nationwide into parts for electric vehicle (EV) batteries. , according to people.
Such a plan would help reduce the United States’ reliance on industry leader China for EV materials, while pushing unions to work in the industry and, in theory, reduce unemployment fueled by a pandemic.
The US Department of Commerce is holding a conference in June to attract more electric vehicle manufacturers to the country. Biden’s proposed $ 1.7 trillion infrastructure plan provides $ 174 billion to boost the domestic electric vehicle market with tax credits and subsidies for battery makers, among other incentives. The ministry declined to comment.
“It’s not that hard to dig a hole,” said one of the sources. âWhat’s difficult is getting these products out and getting them to processing facilities. That’s what the US government is focused on.â
Under this approach, the United States would rely on Canada, Australia and Brazil – among others – to produce most of the essential raw materials needed, while competing for higher-value jobs transforming these minerals in computer chips and batteries, depending on the two. sources.
Securing the entire supply chain from metals to batteries does not require the United States to be the main producer of the raw materials, one of the sources said.
A comprehensive strategy will be finalized after a year-long supply chain review involving national security and economic development officials.
Biden officials want to make sure the administration’s EV aspirations are not jeopardized as national mines face roadblocks, the sources said, both environmentalists and even some Democrats.
“It rings hollow when I hear everyone using this as a national defense argument, that we have to build new mines to have a greener economy,” said US Representative Betty McCollum, a Democrat who introduced legislation. which would permanently block Antofagasta Plc (ANTO .L) proposed the Twin Metals copper mine in Minnesota.
âPresident Biden is focused on conquering the electric vehicle (EV) market, sourcing and manufacturing the supply chain here in America, and creating well-paying union jobs,â said Ali Zaidi, Deputy National Climate Advisor at the White House.
âBuilding American electric vehicles and shipping them around the world will involve leveraging parts and resources made in the United States. This includes responsible research, development and extraction of minerals and critical materials used for batteries. electric. “
Zaidi also said the administration is invested in a strategy that includes recycling in the supply chain.
While the American projects of small and large miners will feel the impact, the pain of any stalled project will fall disproportionately on small companies focused on the United States. Many large miners also have global projects that could benefit from the administration’s plan.
âWe can no longer push the production of the products we want to places we can’t see and people we will never meet,â said Mckinsey Lyon of Perpetua Resources Corp (PPTA.TO), who is trying to develop Idaho’s Stibnite mine to produce gold and antimony used to make EV battery alloys.
The US government in April became the major shareholder in mining investment firm TechMet, which controls a Brazilian nickel project, a Rwandan tungsten mine and is a major investor in a Canadian battery recycler.
Washington is also funding research on Canadian cobalt projects and rare earth projects in Malawi, among other international investments.
The State Department’s Energy Resources Governance Initiative (ERGI) is one of the main programs Washington plans to use to help its allies discover and develop lithium, cobalt, and other EV metals. .
Of course, Washington is not ignoring domestic mining.
The US Department of Energy has given grants to help old coal mines find ways to produce rare earths. US authorities have also funded MP Materials Corp (MP.N), which owns the country’s only rare earth mine, although it relies on Chinese processors.
But the gist of Biden’s approach is designed to avoid battles with environmentalists and save capital for other fights, according to an administrative source.
During a visit to a Ford Motor Co (FN) Michigan plant on May 18, Biden called for government grants for new EV battery installations. He mentioned Australia’s lithium reserves during the tour, but not America’s large reserves of the key battery ore. Read more
Republicans say Biden’s EV plans will be impossible without more US mines.
“These ‘not in my backyard’ extremists have made it clear that they want to lock down our lands and prevent mineral extraction,” US Representative Lauren Boebert, Republican of Colorado, told a House Natural Resources Committee forum. held on the same day. like Biden’s visit to Michigan.
Biden’s approach comes with risks, including the anger of political supporters within the labor movement who want the administration to be open to resource extraction and the jobs that flow from it.
“Let the Americans take these minerals out of the earth,” said Aaron Butler of United Association Local 469, who works for the Resolution copper mine project proposed by Rio Tinto Ltd (RIO.AX) in Arizona and endorsed Biden at the time. elections. “These are high paying jobs.”
Many of the skills that unions would use to build mines, including concrete and electrical work, can also be used to build EV metal processing plants.
The National Mining Association, an industry trade group, lobbied the White House and Congress to support national projects, arguing that the coronavirus pandemic has shown the importance of localization of supply chains.
Biden’s White House is now working quietly to garner support from workers as it tries to demonstrate that its green policies create jobs, ahead of the 2022 midterm elections which could determine whether the strategy wins congressional support, according to two organized union sources familiar with the campaign
Biden officials have reached out to unions across the country to ask for specific employment promotion projects that the administration can take credit for, union sources said.
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