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Column: Trump 2.0 won’t reverse Biden’s critical minerals push
The Biden administration prioritized investing in America’s domestic industrial capabilities, particularly in the critical minerals sector, through substantial funding initiatives. A notable example of this investment is the $75 million earmarked for upgrading Constellium’s aluminum rolling mill in West Virginia, which underscores the commitment to revitalizing American industrial infrastructure. The bipartisan acknowledgment of the need to reduce dependency on foreign sources, particularly China, for critical minerals signals a political will that transcends party lines.
Former President Donald Trump initially addressed the reliance on foreign critical minerals in 2020, declaring it a national emergency. With Trump potentially returning to the presidency, this focus on self-sufficiency in critical metals is likely to gain renewed momentum, further strengthening investment efforts in the sector.
### Investing in Domestic Industrial Capacity
The U.S. Department of Energy (DOE) and Department of Defense (DOD) have invested billions to rebuild metal capacities in the country. The DOE has primarily focused on essential components for electric vehicle (EV) batteries, such as lithium and manganese. In contrast, the DOD has cast a wider net, targeting various metals, from antimony to zirconium, which are crucial for both defense applications and commercial industry needs.
According to the Biden administration, about $120 billion has been pledged in investments focused on domestic production of critical minerals and battery components. Since the implementation of the Inflation Reduction Act (IRA) in July 2022, the U.S. has seen announcements of 17 new battery plants, significantly increasing projected capacity. However, concerns arise regarding the actual mineral sourcing for these facilities—much of the investment appears concentrated in downstream production rather than on building the necessary mining and smelting infrastructure to support new manufacturing.
Despite funding allocations that suggest progress, many intended smelting projects remain in limbo. For instance, while Century Aluminum received a potential $500 million for a new aluminum smelter, no further developments have been reported since the initial announcement. The DOD’s collaboration with Australia’s Lynas Rare Earths on processing rare earth materials has also faced setbacks due to complications in the permitting process.
### Challenges in Mining Development
Developing new smelting capacities requires significant growth in mining operations, particularly for metals essential to modern technology. However, current trends indicate a disproportionate focus on lithium, neglecting broader metal supplies such as copper and zinc, which are equally critical for clean energy technologies.
Projects like Lithium Americas’ Thacker Pass are noteworthy, but they highlight a worrying trend where other mining ventures struggle against a convoluted regulatory landscape. Significant projects, including the Pebble mine in Alaska and the Twin Metals project in Minnesota, have been halted, reflecting tensions between environmental standards and the urgency of producing necessary materials for a sustainable economy. As political campaigns ramp up, Trump’s potential reinstatement may shift the balance towards a more pro-mining agenda.
### U.S.-China Dynamics in Mineral Sourcing
A renewed Trump administration could adopt a tougher stance on critical metal imports, particularly from Chinese-affiliated entities. For example, Talon Metals has been allocated federal funds for its Tamarack nickel project in Minnesota; however, it faces challenges in a market dominated by Indonesian nickel suppliers, which are largely under Chinese control.
While price and production capabilities may currently drive relationships in the nickel sector—evidenced by U.S. investments in Indonesian mining—this approach may clash with a nationalistic push to enhance American self-sufficiency. Under a potential Trump presidency, the narrative surrounding sourcing metals may shift, promoting tighter regulations around imports that could conflict with U.S. interests.
In summary, upcoming political transitions may significantly impact U.S. policies aimed at bolstering domestic mineral production. While current investments signal intentions to secure critical resources vital for energy transition, the challenges in mining capacity establishment and international supply chain dynamics present substantial hurdles that policymakers must address for long-term sustainability.
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