August 31, 2023
Thinking about the longer term threats to the US’ economic growth, there are few so glaring as the federal government itself. Specifically those in it who side with the president’s “green” agenda.
Both Bob and I both have said here before that undermining our fossil fuel-based economy without having a viable replacement is effectively slow-motion economic suicide.
And the fact that doing so also makes us completely dependent on our chief geopolitical rival for the materials necessary to achieve that dream, throws gas on that fire.
It’s a serious problem they’re creating with their eyes wide open…
Take Lithium
If there is one metal associated with the green movement, it’s lithium.
Today, batteries are made with combinations of cobalt oxide, manganese oxide, iron phosphate, nickel manganese cobalt oxide, titanate, and aluminum oxide. BUT no matter what metals are used in combination, lithium is always in there.
Currently only a fraction of critical battery resources, like lithium, are produced in the US.
And it’s not for lack of supply. While Chile and the “Lithium Triangle” countries along with Australia are the dominant sources, the US also has some significant reserves. According to the US Geological Survey (USGS) the US contains roughly 750,000 metric tons of lithium reserves. That adds up to over 4% of the world’s supply.
Or take rare earth elements… They’re another key component not only in the green space (for magnetic motors and wind turbines) but for national defense and much of today’s modern technology as well…
REEs are critical to defense technology as modern weapons can’t be built, repaired, or maintained without them. Everything from F-35 fighter aircraft to cellphones depends on rare earths, as do critical space technologies, electronics, and semiconductors.
Believe it or not, the US was once self-reliant when it came to domestically produced REEs. Unfortunately over the past 15 years it has become 100% reliant on imports because of “cost factors.”
Today the top three producers of REEs in the world rank as China, Russia, and Malaysia. But that’s a little misleading as China produces roughly 70% of the world’s supply.
But that’s not all…
They also process and refine roughly 70% of the world’s cobalt, about 35% of the world’s nickel, upwards of 70% of the world’s lithium and nearly 90% of the REEs supplied to the world.
What have we got going in the US?
We are home to just one active lithium (key ingredient for electric vehicle batteries) mine, which barely produces enough to power 80,000 EVs annually. We have just one nickel mine up and running. The only cobalt mine opened its doors last fall only to suspend activities earlier this year. There is zero graphite and zero manganese mining.
Consider the Reality
An article in the EpochTimes pointed out that under “current regulations, it takes an average of 16 years for a permit to be awarded.”
Stop and think about that for a second. Sixteen years just to get permits!
A mining company that applied in 2020 likely won’t get permitting until 2036! And even then it’s a financially risky business.
Once greenlighted, REE projects are capital-intensive and take a great deal of time to turn a profit. Due to these difficulties and the uncertainty of earning a positive return, most established mining companies have steered away from the REE business.
The Biden administration’s idea of advancing a green economy is throwing billions into “green energy” projects via the Inflation Reduction Act and the BiPartisan Infrastructure Bill.
But throwing it all into projects where we don’t even have access to raw materials is going to be a waste of billions…
Humbly yours,
Tim Collins
Editor, Streetlight Daily