President Joe Biden said on March 31st he will invoke the Defense Production Act to boost domestic mining, and secure U.S.-based sources of critical minerals that are key to developing clean energy technology. This comes in wake of the Russia/Ukraine conflict, as the U.S. increases Russian sanctions and the administration reduces imports. Russia is a key global supplier of battery metals used in electric vehicles, like nickel, copper, and lithium. Prices of these and other metals continue to rise, as industry experts believe that demand will outstrip supply in the coming years, whilst manufacture of electric vehicles continues to grow at a rapid pace.
The United States Geological Survey released their new list of 50 mineral commodities critical to the U.S. economy/national security this February. The 2022 list adds nickel and zinc while removing helium, potash, rhenium, and strontium. According to a recent Moody’s report, Russia controls 15 percent of zinc and 6.1 percent of the global nickel trade, respectively. Although, the U.S. does not directly depend on Russian sources for energy and metals, it does receive exposure from importing European goods manufactured using Russian energy.
The Defense Production Act of 1950 was modeled after the WWII “War Powers Act”; which President Harry Truman invoked to produce steel for the Korean War and President Donald Trump called on to boost mask production during the COVID-19 pandemic.
Canada has also followed suite, as the government sources say that the nation’s federal budget to be released on Thursday will include an investment of about $1.6 billion U.S. to shore up their production of critical EV minerals. Canada has a robust mining sector and is a key global producer of copper, nickel and cobalt and hosts mineral projects for rare earth elements, lithium, graphite, and vanadium. The contribution of Canada’s minerals and metals sector to Canada’s gross domestic product (GDP) was $107 billion in 2020, representing about 5% of the nation’s total GDP.
Last month the government announced that it will financially support two facilities that will manufacture battery materials for EVs and a battery gigafactory, but no announcements for contracts for mineral extraction or refining have been made thus far.
