Mine industry balks at move to increase electric battery production

Amid growing calls from the American public and fossil fuel industry stakeholders to increase domestic drilling, the Biden administration is taking a different approach to the country's energy crunch by increasing the supply of raw materials needed for electric vehicles. But critics suspect the move may have unintended consequences.

The White House recently authorized the Defense Production Act, an executive action that is available to the sitting president. In this instance, invoking the Defense Production Act will provide miners with the resources needed to acquire more minerals — such as manganese, graphite, cobalt and lithium — that can be leveraged for electric vehicle production and to manufacture the batteries that electric vehicles run on.

To ensure that the drilling for these minerals don't compromise the strides the United States has made in carbon emission reduction, the White House noted it will work in tandem with the Department of Defense to maintain "strong environmental, labor, community and tribal consultation standards."

This latest action by the Biden administration is part of a multi-pronged effort to bring some semblance of balance and normalcy to the energy supply chain. With a war being waged in Ukraine, hyperinflation pushing prices increasingly higher and more individuals returning to the workplace after COVID-19 protocols had many people telecommuting — thus increasing the demand for gas — the combination of these factors has only further destabilized the economic landscape. With more access to the resources needed for alternative energy, supporters of the administration's actions say the latest move will help to diminish the nation's reliance on fossil fuels.

Nickel is a key ingredient for electric vehicle batteries.

NMA warns supply chains aren't ready
However, critics of the president's policy don't believe it will be beneficial — in fact, it may even be harmful. Speaking on behalf of the National Mining Association, NMA President and CEO Rich Nolan warned that the directive from the White House could create more demand than the domestic minerals supply chain can reasonably satisfy. That's largely because many of the minerals required to make electric vehicles are primarily imported from overseas.

"[T]he approaching minerals demand wave is set to strain every sector of the economy and requires an urgency in action from government and industry never before seen," Nolan said. "Unless we continue to build on this action, and get serious about reshoring these supply chains and bringing new mines and mineral processing online, we risk feeding the minerals dominance of geopolitical rivals."

According to the Office of Energy Efficiency & Renewable Energy, between 2016 and 2019, more than half of the lithium the United States imported derived from Argentina and approximately 36% came from Chile, which borders Argentina to the west.

The Natural Resources Defense Council, meanwhile, said that while the Biden administration's actions are laudable, the president must urge miners to use all due discretion in terms of how these strategic minerals are obtained. In short, the preservation of the environment must be prioritized. 

"Rather than just digging up or importing more, we should start with improved recovery and waste reduction throughout supply chains," said Bobby McEnaney, senor lands analyst for the NRDC.

He added these materials should be recycled to ensure the U.S. maintains its commitment to environmental sustainability.