By Andrew C. Jarocki
The Hull-Rust-Mahoning Mine is one of the largest active open pit mines in the US. Photo Credit: CC/Wikimedia Commons/Chipcity
The rise of electric vehicles and other energy technologies will dramatically increase demand for strategic minerals. As a result, domestic mining has a new importance to the national interest and the US must invest in the entire mineral supply chain to avoid overdependence on rivals.
The Future of Driving…and Warfighting?
To the average American, the advent of electric vehicles (EVs) means more sleek Teslas cruising city streets. However, EVs are increasingly catching the attention of a customer who operates on chaotic battlefields far from home: the United States Army.
“Let’s be clear. We’re behind. We’re late to meet on this thing,” said Lt. Gen. Eric Wesley, director of the Futures and Concepts Center at Army Futures Command.
“All of the various nations that we work with,” Wesley told Defense News in 2020, “they’re all going to electric power with their automotive fleet and right now…we are not there.”
An unclassified report from the Army’s Tank Automotive Research, Development and Engineering Center (TARDEC) sets a goal by 2025 to develop “vehicle concepts that take advantage of electric powertrains.”
The tactical potential of EVs is vast. On the battlefield, research suggests that electrification can reduce vehicle audible signatures by a factor of five and reduce thermal signatures by a factor of ten. No need for gas also means fewer resupply convoys to forward deployed units, a significant source of casualties in Iraq and Afghanistan. Off the battlefield, the dramatically fewer moving parts of electric powertrains could mean fewer maintenance costs for an Army already facing less generous budgets.
It’s no surprise then that the TARDEC report makes clear the Army’s push to “develop and integrate efficient quiet power systems onto manned and unmanned vehicles…to demonstrate expanded capabilities and energy savings.”
(Interestingly, TARDEC also wants “vehicle electrification to support directed energy weapons and future communication systems.” The country should pray that Elon Musk does not also get the idea to build EVs capable of shooting lasers.)
As the Army hires partners to help it prepare for a future fleet of 225,000 EVs and experts forecast domestic EV sales to reach nearly 7 million annually by 2025, a future national security need is becoming clear: more batteries. Lots more batteries.
The Mineral Problem
Raw materials make up 79 percent of the cost of EV batteries, especially lithium, cobalt, nickel and graphite, according to the Center for Strategic and International Studies (CSIS). This places a special importance on securing an ample supply of minerals if the US will have any hope of a strong domestic battery industry.
The current battery supply chain is covered in “Made in China” stickers, both literally and figuratively. CSIS estimates that China currently accounts for roughly 67 percent of global battery capacity.
President Joe Biden has called for billions of dollars to ramp up American battery production, stating that the US is “running way behind China.”
However, Beijing’s most crucial advantage is a commanding lead in the upstream production and refinement of minerals necessary for batteries manufactured anywhere. A team of geologists and economists recently determined that China is the largest producer for 16 of the 23 commodities identified as having the greatest supply risk, including cobalt.
“Mining and processing operations for cobalt are highly concentrated in two countries, the Democratic Republic of the Congo and China, and there is a close tie between the two countries” reported the International Energy Agency (IEA) in a recent study of world minerals.
“The supply chains for cobalt could therefore be highly affected by regional incidents…or policy changes in these countries” added the agency, also noting that “China has influence over many assets in the DRC through foreign direct investment.”
It is not crazy to imagine China attempting to use their commanding market position to push for diplomatic wins. Japan quickly released a captured fishing captain in 2010 after Beijing throttled rare earth element exports in response.
It is unclear how actually effective such a tactic would be in future scenarios. However, it is certain that even an attempt to do so would force the US to scour the global commodities market for more expensive replacements to continue battery production. As these minerals become increasingly important inputs for the defense industrial base and wider domestic markets, it seems foolish to leave such a possible vulnerability unaddressed.
American policymakers must make far-sighted decisions today, as the problem of mineral supply is not one that can be fixed quickly once it finally arrives. The IEA notes that it takes over 16 years for the average mining project to move from discovery to first production.
The Homegrown (Home-dug?) Solution
Northeastern Minnesota may initially seem to have little to do with geopolitical struggles, but just beneath the beautiful forests and lakes lies the answer to the nation’s mineral needs.
The Duluth Complex, a geological formation stretching across the region, contains an estimated 95% of the nation’s nickel reserves, 34% of the nation’s copper, 88% of the cobalt, 51% of the platinum and 48% of the palladium.
Mining this rich complex was formally proposed in 2009. However, a single shovel has yet to break ground. Fierce litigation over permits means the decade-long deadlock will likely continue into the foreseeable future.
In a 2017 executive order, President Donald Trump created the policy goal “to reduce the Nation’s vulnerability to disruptions in the supply of critical minerals” by “increasing activity at all levels of the supply chain, including exploration, mining, concentration, separation, alloying, recycling, and reprocessing critical minerals.”
This need is recognized across partisan lines. The Biden Administration’s recent comprehensive report on supply chains highlights “critical materials for high-capacity lithium-ion batteries – particularly Class I nickel, lithium, and cobalt – as primary upstream supply chain vulnerabilities.” The report comes to the conclusion that “new responsible domestic extraction should focus on critical materials where the U.S. has known reserves significant enough to establish an economic base supply.”
To make real progress on this worthy goal, the federal government can undertake three practical steps.
First, federal regulators should treat mining and exploration permit applications with national security importance. This would mean expedited review by relevant federal agencies (like the Army Corps of Engineers) of projects that target proven deposits of critical minerals like the Duluth Complex. Additionally, federal authorities could open more land to exploration for strategic minerals.
Second, relevant Congressional committees and the National Security Council should be tasked with studying what incentives could be created to attract more investment in mineral production, processing and refinement in the United States.
Lastly, federal agencies should dramatically increase research on mitigating negative effects of mining for critical minerals. The environmental concerns about the impact of mining are real and legitimate. To address these concerns, federal funding must be dramatically increased for research on safer extraction technologies and practices to minimize risks to local communities. Research could also spur new improvements in recycling or innovation. For example, the Department of Energy offered $30 million in funding for research on alternatives to rare earth materials in 2011 after China sparked fears about supply.
It’s important to recognize that state agencies play an equal role in ultimately approving mining projects and refineries. Mining companies and local organizations can also be more effective than any public actors in guaranteeing safe and successful projects, such as the famous Good Neighbor Agreement between stakeholders in Montana. Federal dollars and support could be used to nudge parties towards this kind of model.
While every local situation is unique, these steps will allow Washington to at least make more clear in every case the national security importance of the mineral supply chain.
Tomorrow’s Tech Needs Today’s Minerals
While EVs are an excellent example, other emerging energy technologies also demonstrate the critical importance of the mineral supply chain.
Advancements in wind, solar and geothermal production (now 11.1% of America’s electricity) provide new sources that could strengthen America’s energy security. A diversified basket of effective power sources is a smart insurance policy, ensuring no disaster or attack could turn off the lights entirely by knocking out only a single type of energy.
The World Bank estimates over 3 billion tons of minerals and metals will be needed to build these new energy sources and storage capabilities on a large scale in the coming years. If the US wants to be well-positioned to take advantage of these innovations, it must pay more attention to the supply of raw materials that will soon be in fierce demand.
The promise of these technologies of the future will rely entirely on the mineral supply chain America can secure today.
Andrew Jarocki is the Editor-in-Chief of the Realist Review. He graduated from the University of Notre Dame with a Political Science degree in 2020.