In the past two years, Congress has passed multiple bills that will boost our domestic clean energy supply chain—including the Energy Act of 2020 and the bipartisan Infrastructure Investment and Jobs Act, as we detailed in a previous blog post. These investments are essential. To decarbonize the economy, America needs a domestic, sustainable, and secure critical minerals supply chain.
Most recently, the Inflation Reduction Act (IRA) included important provisions to drive a clean energy supply chain—such as the mineral sourcing requirements for the 30D clean vehicle tax credit, the inclusion of critical mineral mining and processing under the 45X production tax credit for advanced manufacturing, and an extension of the existing 48C investment tax credit for advanced energy projects, which now includes production or recycling of energy conservation technologies. The Biden administration is actively evaluating how to implement these tax credits, and more guidance is expected in the months and years ahead. While much attention has been focused on the IRA’s climate provisions, less attention has been paid to the bipartisan CHIPS and Science Act of 2022, which President Joe Biden signed into law on August 9, 2022.
The CHIPS and Science Act marks the culmination of a years-long effort to bolster the domestic semiconductor industry and establish America’s leadership in the clean energy economy. The positive impact of these supply chain investments should become more apparent in the years ahead, particularly due to the strategic investments CHIPS made in workforce training.
Even with these bold supply chain infrastructure investments, such as the IIJA’s $6 billion for battery manufacturing and processing capacity, the raw material reserves required service this manufacturing are still coming from abroad, especially China which now dominates the critical mineral mining and processing sector globally. Of the 50 critical minerals identified by the U.S. Geological Survey, the United States is 100% net import-reliant on 14 of them and more than 50% net import-reliant for an additional 15. The national security concerns over such extreme dependence on foreign sourcing are readily apparent. Russia accounts for just 11% of global nickel supply, yet fear of sanctions resulting from their invasion of Ukraine sent the price of nickel temporarily soaring by nearly 100% in just 10 days, causing EV manufacturers who rely on nickel for batteries to raise prices and delay shipments. To relieve these supply chain bottlenecks and reduce national security risks, the United States should assess available material reserves and prioritize investments in key steps of the production process to develop domestically (e.g. mining, processing, recycling, manufacturing, etc.), factoring in the likelihood of global supply disruptions, and rely on allied partners for the remainder of the steps.
Figure 1: Net import reliance for several key critical minerals. The USGS defines net import reliance as the percentage of a mineral commodity used by the United States that must be imported from another country.
An important component of onshoring mining, refining, and processing is the workforce that will fill these jobs. In the past 30 years, the U.S. mining workforce has been cut by more than 40%—mostly due to an increasing reliance on foreign supply chains—even while global demand for minerals has skyrocketed. Supporting a domestic supply chain requires building up the expertise or skillsets which we currently lack. According to the US Government Accountability Office “There is limited expertise in the workforce to fill highly technical expert positions related to critical minerals recovery and substitution, such as geologists and other scientists.” Building on this, Jordy Lee, program manager of the Supply Chain Transparency Initiative at the Colorado School of Mines’ Payne Institute for Public Policy, has pointed out that “even if the U.S. built a lithium processing plant, it’s not clear who would be qualified to run it — the U.S. has a mere few thousand students who study metallurgy each year, compared to the tens of thousands of metallurgy graduates in China.”
Figure 2: US Labor statistics for Mining over the past decades. According to the Bureau of Labor Statistics, industries in the mining subsector primarily engage in mining, mine site development, and beneficiating (i.e., preparing) metallic minerals and nonmetallic minerals, including coal.
The CHIPS and Science Act unlocked new opportunities to address America’s workforce and supply chain issues with the new Critical Minerals Mining Research and Development program under the National Science Foundation (NSF) Directorate. This program will make much needed investments through competitive grants to better understand the minerals under our feet, study advanced and sustainable ways to extract minerals, and prepare a new generation of students for quality mining jobs.
Supporting the supply chain of the future will also require an unprecedented level of coordination. To this end, the CHIPS and Science Act establishes a new Critical Materials Subcommittee under the National Science and Technology Council that will coordinate federal efforts on research and environmentally responsible development of critical materials.
The subcommittee will advise the council on matters relating to R&D and investment in sustainable mineral extraction and processing, the national critical mineral workforce, and mineral recycling and substitution efforts. The subcommittee is also tasked with identifying international cooperation opportunities for making critical material supply chains more resilient, ensuring transparent data collection, and providing recommendations on better coordination between federal agency programs working on critical materials.
As more of our energy technologies become reliant on a select few minerals, it’s paramount for the United States to build a durable, secure critical mineral supply chain that insulates American households from geopolitical tension. Mining in the future can ensure that environmental concerns of the past are not repeated, and funding innovative technologies can help elevate cleaner mining techniques and more effective use (and reuse) of raw materials on U.S. soil. The Critical Minerals Mining Research and Development program focuses on the right problem at the right time. Now, Congress must fund this important program so we can get to work.
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