U.S. miners irked that Pentagon mineral stockpile plan bypas them
Reuters News - Feb 24, 2022 16:19:05
By Ernest Scheyder
Feb 24 (Reuters) - 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 www.reuters.com/worl...
of lithium, cobalt and other minerals to reduce its dependence on China.
President Joe Biden confirmed the plan at a White House ceremony
www.reuters.com/busi...
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 www.reuters.com/arti...
Ltd <INR>, 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 www.reuters.com/worl...
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 www.reuters.com/busi...
Corp <LAC>, which is also developing a large U.S. lithium mine.
"Stockpile purchases cannot completely sustain a new [domestic] 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 www.reuters.com/busi...
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by Biden's attempt to change U.S. mining laws www.reuters.com/busi... ,
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 www.reuters.com/arti...
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 [midterm] 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."
(Reporting by Ernest Scheyder in Houston; additional reporting by Trevor
Hunnicutt and Mike Stone in Washington; Editing by David Gregorio)
(ernest.scheyder@thomsonreuters.com; Twitter: @ErnestScheyder; +1-713-210-8512;
Reuters Messaging: ernest.scheyder.thomsonreuters.com@reuters.net)