Beleaguered Ellison faces MinRes shareholders
The board of under-siege Mineral Resources faced grilling in Perth over a governance scandal, amid unexpected expressions of support.
U.S. miners are clamoring for Washington to approve new domestic sources of minerals used to make weaponry, electric vehicles and other high-tech gadgets, frustrated that the Pentagon is working with non-American companies to stockpile the materials.
Reuters reported last week that the U.S. Defense Department plans to boost its reserves of lithium, cobalt and other minerals to reduce its dependence on China. President Joe Biden confirmed the plan at a White House ceremony this week.
Several companies working to open U.S. mines have sought to supply the Pentagon, hoping military deals will help secure other customers and financing. But even the most advanced of these projects are several years away from opening.
This presents a chicken-or-egg scenario for the military. The Pentagon has taken an “all-of-the-above” approach, noting Congress has deemed supplies from allies acceptable if no domestic supply exists. A White House official said government policy is to source products domestically first, if able.
American miners are frustrated the Pentagon is looking to Canada, Australia and elsewhere.
“What I would encourage the Biden administration to do is to focus on getting a few of these U.S. projects approved and finished,” said James Calaway, chairman of ioneer Ltd, which aims to build one of the largest U.S. lithium mines.
“The military should be contacting us and having serious conversations about how we can help boost domestic lithium supply.”
Russia’s invasion of Ukraine added further impetus to the push. Russia supplies about 10% of the world’s nickel, which is used to make stainless steel and EV batteries, and is also a major producer of iron ore, platinum and other metals.
The Pentagon has not yet reached out about the stockpile to ioneer or Lithium Americas Corp, which is also developing a large U.S. lithium mine.
“Stockpile purchases cannot completely sustain a new source of supply, but they can act as an important catalyst to reduce our dependence on unreliable foreign sources,” a Pentagon official said.
The National Mining Association, a trade group for U.S. miners, acknowledged that the Pentagon must source some metals from overseas, but said Biden should move faster to permit domestic mines to ensure long-term supplies.
“There are ample domestic resources and extremely promising projects that are currently in the permitting process awaiting approvals from the administration,” said NMA President Rich Nolan. He warned that permitting could be further delayed by Biden’s attempt to change U.S. mining laws, which have not been updated since the 19th Century. Biden has said any new U.S. mine must benefit local communities and not damage the environment.
“These projects would begin the urgent task” of increasing domestic supplies, Nolan said.
On Tuesday, Biden gave MP Materials Inc a $35 million Pentagon grant to help build equipment to process rare earth minerals in California. The company currently relies on Chinese processors and Chinese customers for all of its revenue.
The Las Vegas-based company declined to comment on whether the Pentagon has asked it to eventually supply the stockpile, but said it aims to “support the strengthening of the defense industrial base.”
Even as they try to develop domestic supplies, many U.S. mining executives conceded their industry is caught up in the latest geopolitical struggles over control of the minerals that will power technologies of the future.
“I think I know which way the wind is blowing, but it’s an election year,” said one industry CEO, who declined to be named citing a desire not to offend elected officials. “The business we’re in now is all politics.”
(By Ernest Scheyder, Trevor Hunnicutt and Mike Stone; Editing by David Gregorio)
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