Biden eyes Cold War-era defense law to boost mining sector (updated)

Graphex

30/03/2022 16:19

(Adds industry reaction)
    By Trevor Hunnicutt and Ernest Scheyder
    WASHINGTON, March 30 (Reuters) - U.S. President Joe Biden
could invoke a Cold War-era defense law as soon as this week to
encourage domestic production of minerals needed to make
electric vehicle batteries, according to two sources familiar
with the matter.
    Such an order under the Defense Production Act is expected
to help companies access government funding for feasibility
studies for new projects that extract lithium, nickel and other
EV metals, or to make existing facilities more productive.
    The funds would not be used to dig new mines or buy minerals
for government stockpiles, nor would invoking DPA let the mining
industry bypass regulatory or permitting standards. It was not
immediately clear how much funding could be allocated.
    Biden's economic program has prioritized fighting climate
change and stimulating domestic manufacturing using electric
vehicles. Administration officials have said national security
has been harmed by dependence on fossil fuels from other
countries, including Russia, which is also a major nickel
producer.
    Last month, Biden voiced support for new U.S. mines, but
said they must benefit host communities and not damage the
environment. The president also said the Pentagon would boost
its reserves of certain EV metals, a plan likely to require
sourcing from overseas mines due to low U.S. production.      
    "We must ensure that we secure the materials necessary for
the clean energy economy in a way that holds to our strong
environmental, labor, Tribal engagement standards and does not
leave us reliant on unreliable and unsustainable foreign supply
chains," one of the sources said.    
    Securing enough raw materials to make electric vehicle
batteries has been a major obstacle, with domestic mines facing
extensive regulatory hurdles and environmental opposition. Biden
blocked a proposed Minnesota copper mine earlier this year, and
his administration is heightening scrutiny on other proposed
mines.
    The DPA gives the Pentagon wide berth to procure equipment
necessary for national defense. Invoking it would essentially be
a declaration that relying on rival nations for EV battery
building blocks would constitute a national security threat.
    Biden's predecessor, Donald Trump, invoked the DPA in 2019
to build up a stockpile of rare earths, the specialized minerals
used to make magnets found in weaponry and EVs.    
    Biden's use of the DPA would show the United States "will
support responsible domestic mining, processing and recycling of
battery materials as a matter of national importance," said Todd
Malan of Talon Metals Corp  TLO.TO , which has a deal to supply
Tesla Inc  TSLA.O  from a Minnesota nickel mine it is
developing.
    The National Mining Association, an industry trade group,
said the expected order from Biden may be limited in scope, but
would send a strong signal to global markets.
    "Unless we continue to build on this action ... we risk
feeding the minerals dominance of geopolitical rivals," said
Rich Nolan, the NMA's president. 
    Several industry executives said the decision shows Biden is
taking the looming supply shortage seriously and they were eager
for details on how Biden would use DPA to boost domestic EV
metals production.    
    "This is a good signal, and we're glad about it," said James
Calaway, chairman of ioneer, which is developing a lithium and
boron mine in Nevada.
    Biden has made broad use of the DPA in his presidency,
including using it to stimulate manufacturing of supplies used
in the response to COVID-19.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Biden voices support for new U.S. mines, if they don't repeat
past sins     urn:newsml:reuters.com:*:nL1N2UX2Q0
Lithium Americas CEO says mining reform needed for EV metals
supply      urn:newsml:reuters.com:*:nL2N2VB3C0
As EV demand rises, Biden officials warm to new mines   
 urn:newsml:reuters.com:*:nL2N2VD2H3
U.S. miners irked that Pentagon mineral stockpile plan bypasses
them      urn:newsml:reuters.com:*:nL1N2UZ01K
Biden administration kills Antofagasta's Minnesota copper
project      urn:newsml:reuters.com:*:nL1N2U61Z2
Tesla signs deal for first U.S. nickel supply with Talon Metals 
   urn:newsml:reuters.com:*:nL1N2TQ27H
U.S. faces tough choices in 2022 on mines for electric-vehicle
metals      urn:newsml:reuters.com:*:nL1N2SY2N7
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Trevor Hunnicutt in Washington and Ernest
Scheyder in Houston; Editing by Sandra Maler and David Gregorio)
 ((trevor.hunnicutt@tr.com; +1 (332) 219 1571;
twitter.com/TrevorNews; Reuters Messaging:
trevor.hunnicutt.thomsonreuters.com@reuters.net))