April 8, 2024 Critical Mineral Independence Must Be Made In The USA

Volume 27 | Issue 1

Onshoring production would unlock local value chains for industry.

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The clean energy transition cannot happen without critical minerals. The United States needs to address three key supply chain challenges to meet its ambitions for industry, citizens, and the economy as a whole. These are:

1. China’s supply chain dominance – how can the US reduce this dependence and create national value chains?
2. Shortfalls in supply – with demand rapidly growing, how can this shortfall be filled?
3. The negative environmental impact of incumbent technologies and supply chains –can America show the world that there is a better way of doing business?

Failing to address these challenges risks allowing China to dictate the pace of electrification and net zero efforts and thus, the opportunities that they provide US industry. Additionally, failure to achieve critical mineral independence risks driving big players in the American automotive industry out of business due to reduced access, supply constraints, and the unfair advantages enjoyed by overseas competitors.

Further, the International Energy Agency predicts that future demand for the critical minerals required to manufacture batteries will far outstrip supply. This would slow the deployment of electric vehicles (EVs) and energy storage and thus, renewable energy – harming key industries, as well as the country’s economic growth and energy security.

The US government and industry has already become aware that the clean energy transition is contingent upon critical mineral supply chains. Enabling the electrification of transport and decarbonization of energy systems through onshoring critical mineral supply chains will play a pivotal role in helping America achieve its future economic and environmental goals in tandem.

Crucially, threats to these supply chains also represent threats to US security – as revealed by Assistant Secretary Pyatt’s centering his engagements on critical minerals at the recent Munich Security Conference.

But words alone will not suffice. They need to be backed up with urgent action, from policymakers and industry.

Critical minerals like graphite – which comprises half the weight of lithium-ion batteries – are integral components of the technologies powering the clean energy transition.

The US government maintains three lists of critical strategic materials. Graphite is on all three.

Addressing China’s supply chain dominance

China is a dominant, disruptive player in global critical mineral supply chains, particularly when it comes to graphite – the country currently controls over 90% of the world’s supply.

This dominance entails the risk of weaponization for political leverage and potential disruption of supply to the US’s clean technology industry. China has already shown itself willing to do so, with graphite exports dropping by 91% in December 2023 after it imposed controls. This move resulted in widespread uncertainty in American industries and markets while providing an unfair advantage for China’s homegrown EV manufacturers, which are growing at a remarkable pace.

To date, the US has made little headway in breaking its dependence on China for the types of minerals and metals that are critical to the nation’s clean energy ambitions, economic well-being, and defense. The 2024 edition of the US Geological Survey’s annual Mineral Commodity Summaries found that America is 100% dependent on imports for graphite.

That said, there is growing consensus among US policymakers around the need to address this challenge, as demonstrated by making it a focus of their engagement at the Munich Security Conference. Policy now needs to be put into place, to help the US achieve critical mineral independence by strengthening national supply chains.

Onshoring is the future

Onshoring the production of these critical minerals – a key part of the automotive industry’s value chain – is the best way to address the challenge. Not only will this enhance supply chain security, but it will also catalyze economic growth, create new jobs, and enable local control of the electrification economy.

Through initiating domestic production, the US can protect itself against potential supply chain disruptions and free itself from the uncertainty of geopolitics.

However, neither of the incumbent forms of graphite offer long-term security.

The production of ‘traditional’ synthetic graphite is dependent upon dwindling stocks of fossil-fuel based feedstocks (coal tar or petroleum coke) and highly polluting manufacturing processes. Each metric ton of this form of graphite can be responsible for as much as 50 metric tons of carbon emissions.

For synthetic graphite, which is produced using petroleum needle coke or coal tar pitch, this would require vast new plants to be built across the country by 2030. Meeting demand for graphite with only synthetic graphite would make the country fully dependent on finite resources i.e. fossil fuels, and high-emission processes.

Natural graphite is mined from the earth, exacting a heavy toll on nearby communities, animals, and the environment – every metric ton produces as much as 15 metric tons of carbon emissions. Graphite mines are also confined to certain geographies and could quickly cease to be economically viable, leaving stranded assets and scarred earth in their wake.

Fulfilling demand with mined graphite would require extensive new mines to be commissioned and built throughout the country by 2030. With some mines taking up to 7 years to come onstream, this represents a particularly huge challenge. This solution would also cost taxpayers hundreds of millions of dollars and entail enormous social and environmental costs while making the country fully dependent on finite resources.

A sustainable graphite solution

One alternative to unsustainable graphite production is biographite, a new high performing, cost competitive and climate positive form of synthetic graphite that can be produced from low cost, sustainable forestry by-products (such as wood chips), using renewable energy.

Biographite acts as a ‘drop-in’ replacement for costly traditional synthetic graphite and can be produced locally using widely available, sustainable feedstock. This key distinction means that production can be rapidly scaled to meet skyrocketing demand. It also means biographite plants can be located near cell and battery manufacturers and OEMs – shortening supply chains, driving economic efficiencies, and providing additional environmental benefits.

Critically, biographite can be produced in mere hours, as opposed to the months currently required to manufacture anode-grade synthetic graphite. In addition, the creation of biographite saves up to 55 metric tons of carbon emissions per metric ton when compared to traditional synthetic graphite.

Using only a small fraction of the US’s forestry industry by-products that are generated annually, enough biographite could be produced to meet the country’s projected graphite demand by 2030, a giant leap towards critical mineral independence that will onshore new, high-skilled jobs.

Rolling out commercial scale biographite plants across America will accelerate electrification and net zero efforts, unlocking new opportunities for a wide range of American industries while transforming the battery material supply chain. By supporting the onshoring of this critical mineral, US policymakers and industry can play a vital role in shaping a future where America regains control of its critical mineral supply chains and elevates the country’s global leadership credentials in clean energy.

Biographite can help transform America’s electrification economy and enable it to outmaneuver its overseas competitors as the world transitions to a climate positive future, but only if we act now.

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