Domestic Critical Mineral Production Initiative

Mar. 1, 2022
By: Chaney A. Finn

Critical minerals, such as lithium and cobalt, are used in a variety of products from computers and batteries to electric vehicles. During the America’s Supply Chains review following the executive order of the same name reviewed vulnerabilities in critical mineral and material supply chains. The review noted that the U.S. depends on foreign sources for these minerals, primarily China, posing economic and national security threats.

The White House announced that the Industrial Base Analysis and Sustainment Program of the Department of Defense awarded MP Materials $35 million for separating and processing heavy rare earth elements at their facility in Mountain Pass, CA, launching the country’s first domestic magnet supply chain. MP Materials will also invest another $700 million to create over 350 jobs in the magnet supply chain by 2024. Magnets, used in EV motors, defense systems, and other electronics, are dominated by China which controls 87% of the market. The Department of Energy is also launching a $140 million project to recover rare earth minerals form coal ash and other mine waste, reducing the demand for new mining. Another $3 billion will be invested in refining lithium, cobalt, nickel, and graphite in a battery recycling initiative.

Other commercial investments in critical minerals include a multibillion-dollar investment by Berkshire Hathaway to build a facility in Imperial County, CA to test a sustainable lithium extraction and production process, set to produce up to 90,000 metric tons of lithium annually by 2026. Redwood Materials is in talks of launching a pilot program in partnership with Volvo and Ford for the collection and recycling of end-of-life lithium-ion batteries to extract lithium, cobalt, nickel, and graphite.

With these critical minerals initiatives, also comes new regulations to uphold the administrations labor, environmental and environmental justice, and equity priorities. The Department of Interior announced the establishment of an Interagency Working Group that is leading the effort of promoting responsible mining under strong social, environmental, and labor standards, by collaborating with experts in mine permitting and environmental law to review existing mining laws, regulations and permitting processes. Recommendations to Congress from the IWG are expected by November.

The Federal list of critical minerals will be updated to include these minerals that are essential to economic and national security. The Department of Energy, Department of Defense, and the State Department are also collaborating in stockpiling critical minerals for national defense purposes. Under Executive Order 14051, these departments will maintain adequate quantities of supplies, equipment, or raw materials on hand to create a buffer against potential shortages and import dependencies.

If you have any questions or would like more information about critical minerals or materials supply chains do not hesitate to contact any attorney at Barnes, Richardson & Colburn, LLP.