You know the fear of critical minerals shortages within the “booming” electric vehicles (EVs) market is getting desperate when Tesla boss Elon Musk suggests he may have to take up lithium mining.
In a recent Tweet Musk stated: “Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale, unless costs improve. There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.”
Musk highlighted that the price of lithium has risen from US$4,450 in 2012 to US$78,032 per tonne in 2022.
The billionaire EV designer is not the only one raising concerns about where the prices for key materials for lithium-ion batteries (LIBs) are heading.
Leading governments around the world have moved quickly in recent weeks to shore up protection of their domestic critical minerals supplies and to provide significant new investment to drive the exploration and development of EV-related minerals, such as lithium, cobalt, nickel, and graphite.
Canada moves quickly and hard
The Canadian government has revealed it will provide C$3.8B of financial support for critical minerals in its 2022 budget.
The funds are being allocated to accelerate domestic production and processing of critical minerals, particularly lithium, cobalt and nickel to be used in the manufacture of LIBs, portable electronics, and stationary storage cells to make electricity use more efficient.
The 2022 budget critical mineral support highlights include:
- C$1.5B to invest in new critical minerals projects, with priorities for mineral processing, materials manufacturing, and recycling for key mineral and metal products in the battery and rare-earths supply chains
- C$80M for public geoscience and exploration programmes to help find the next generation of critical minerals deposits
- Doubling of the Mineral Exploration Tax Credit (“METC”) for targeted critical minerals, including nickel, copper, cobalt, rare earths, and uranium
- C$1.5B for infrastructure investments to unlock new mineral projects in key regions
- C$144M for research and development to support responsible extraction and processing of critical minerals
- C$10M renewal for the Centre of Excellence on Critical Minerals for three additional years
- C$40M to support northern regulatory processes to review and permit critical minerals projects
- C$70M for global partnerships to promote Canadian mining leadership
- C$15B to support the Canada Growth Fund to restructure supply chains in areas important to Canada’s future prosperity, including the natural resources sector
The budget announcement has been widely welcomed by industry and Canadian critical minerals developers.
One of those is Fortune Minerals Ltd (TSX: FT).
“Fortune is encouraged that the 2022 budget allocates significant funding to align with government policy objectives to grow the domestic critical minerals supply chain,” the company stated.
The company is currently engaged with the Canadian and Alberta governments to secure their support for an accelerated development of the NICO Project. Fortune was recently invited by Invest In Canada to present at an investment conference in Dubai that included a pre-recorded introduction to the NICO Project.
Fortune’s 100%-owned NICO cobalt-gold-bismuth-copper project is a vertically integrated critical minerals development comprising a planned open pit and underground mine and mill in Canada’s Northwest Territories and a planned hydrometallurgical refinery in Alberta.
The company says the NICO Project is one of the few advanced cobalt development assets in the world that can be developed in the timelines required to meet current cathode chemistries and will benefit from the implementation of these programmes.
U.S. moves
On 31 March this year, President Joe Biden invoked the U.S.’s Defense Production Act to secure reliable supply chains for minerals essential to a clean energy transition, including lithium, nickel, cobalt, graphite, and manganese.
Usually used on major U.S. defense issues, the decision to bring the Act’s powers to bare on protecting critical minerals created a wave of controversy.
In his memorandum on the Presidential Determination Pursuant to Section 303 of the Defense Production Act of 1950, President Biden noted that US Secretary of Defense found that a consistent and sustainable supply chain for the critical minerals related to modern technologies like EVs was “essential” to the national defense and cited the need “to rebuild and maintain American expertise and productive capacity in these critical sectors.”
President Biden further noted that “action to expand the domestic production capabilities for such strategic and critical materials is necessary to avert an industrial resource or critical technology item shortfall,” directing the Secretary of Defense to “create, maintain, protect, expand, or restore” domestic production.
“It is the policy of my Administration that ensuring a robust, resilient, sustainable, and environmentally responsible domestic industrial base to meet the requirements of the clean energy economy, such as the production of large-capacity batteries, is essential to our national security and the development and preservation of domestic critical infrastructure,” the President’s memorandum stated.
“The United States depends on unreliable foreign sources for many of the strategic and critical materials necessary for the clean energy transition — such as lithium, nickel, cobalt, graphite, and manganese for large-capacity batteries. Demand for such materials is projected to increase exponentially as the world transitions to a clean energy economy.
“To promote the national defense, the United States must secure a reliable and sustainable supply of such strategic and critical materials. The United States shall, to the extent consistent with the promotion of the national defense, secure the supply of such materials through environmentally responsible domestic mining and processing; recycling and reuse; and recovery from unconventional and secondary sources, such as mine waste.
“These actions shall be conducted, to the extent consistent with the promotion of the national defense and applicable law, with strong environmental, sustainability, safety, labour, tribal consultation, and impacted community engagement standards, to rebuild and maintain American expertise and productive capacity in these critical sectors.
Supporting the changes to the US Defense Production Act, the President said he determined that:
- Sustainable and responsible domestic mining, beneficiation, and value-added processing of strategic and critical materials for the production of large-capacity batteries for the automotive, e-mobility, and stationary storage sectors are essential to the national defense
- Without presidential action under section 303 of the Act, United States’ industry cannot reasonably be expected to provide the capability for these needed industrial resources, materials, or critical technology items in a timely manner
- Purchases, purchase commitments, or other action pursuant to section 303 of the Act are the most cost-effective, expedient, and practical alternative method for meeting the need
He went on to note the Secretary of Defense shall create, maintain, protect, expand, or restore sustainable and responsible domestic production capabilities of such strategic and critical materials by supporting feasibility studies for mature mining, beneficiation, and value-added processing projects; by-product and co-product production at existing mining, mine waste reclamation, and other industrial facilities; mining, beneficiation, and value-added processing modernization to increase productivity, environmental sustainability, and workforce safety
“In the execution of projects to create, maintain, protect, expand, or restore sustainable and responsible domestic production capabilities of such strategic and critical materials, the Secretary of Defense shall consult with the Secretary of the Interior, the Secretary of Agriculture, the Secretary of Energy, and the heads of other executive departments and agencies as appropriate.
“Action to expand the domestic production capabilities for such strategic and critical materials is necessary to avert an industrial resource or critical technology item shortfall that would severely impair the national defense capability. Therefore, I waive the requirements of section 303(a)(1)–(a)(6) of the Act for the purpose of expanding the sustainable and responsible domestic mining, beneficiation, and value-added processing of strategic and critical materials necessary for the production of large-capacity batteries for the automotive, e-mobility, and stationary storage sectors,” he wrote.
The President also announced that the Secretary of Defense, in consultation with the heads of other agencies as appropriate, shall conduct a survey of the domestic industrial base for the mining, beneficiation, and value-added processing of strategic and critical materials for the production of large-capacity batteries for the automotive, e-mobility, and stationary storage sectors.
