The United States (US) reliance on foreign supplies of raw and processed critical minerals is pressing Washington to devise a strategy to secure short-, medium- and long-term solutions. Pressure only increased with the booming demand spurred partly by the Inflation Reduction Act’s (IRA) policies. The US goal to become carbon pollution-free electricity by 2035 and reach net-zero greenhouse gas emissions by 2050 requires a complete overhaul of the structure of critical minerals production and supplies within the country as well as abroad to meet future demand and build resilience from China. This Memo assesses recent progress and whether it can help deliver on the IRA provisions. The United States’ Strategy for Securing Critical Minerals Supplies: Can It Meet the Needs of the IRA? Download 0.43 Mo
To secure its critical mineral supplies, the US remains dependent from foreign countries. Graphite, manganese and many rare earth elements (REEs) are, indeed, rare occurrences in the country while deposits of nickel or cobalt are dwarfed by the giants in the Democratic Republic of Congo, Indonesia, or the Philippines.
With the aim of reducing these dependencies, the IRA, established in 2022, adopts a nationalistic approach to mineral sourcing by requiring a market-value based target for critical mineral content to benefit from its tax credits.
Thus, by 2027, to benefit from these tax credits, an electric vehicle should be built at 80% of the market value of critical minerals in its battery sourced domestically or from US free-trade partners (FTA). With a dependency on imports from non-FTA countries of 77% for cobalt and 46% for lithium and nickel, the IRA goals appear less than likely to be achieved.
This requirement of having 80% of the market value coming from an FTA-country or from the US, coupled with the “foreign entities of concern” provision in US legislation could significantly disrupt critical minerals supplies for US battery and car manufacturers.
On the domestic field, the US is trying to develop its own mining production, with three possible options:
- The opening of new mines, supported by the White House and the Department of Energy.
- The reprocessing of mine wastes, with around 100 000 abandoned mines in the US, whose exploitation often focused on a single ore.
- The recovery of byproducts from operating mines, whose potential strongly depends on economic considerations and on technical feasibility.
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- Briefings de l'Ifri