WASHINGTON -- U.S. lawmakers on Tuesday moved closer to developing a national electric vehicle supply chain policy, with senators voicing bipartisan support for legislation designed to parry China's dominance in metals production and battery manufacturing.
The Senate's Energy and Natural Resources Committee held a hearing on the American Mineral Security Act, which would help streamline regulation and permitting requirements for the development of mines for lithium, graphite and other EV minerals.
The pending legislation would require a tally of metal reserves in the United States and seek to streamline permitting for the EV sector, an area where China already leads by a wide margin.
The bipartisan legislation, which seeks in part to codify a late 2017 executive order on U.S. mineral development by President Donald Trump, was sponsored by U.S. senators Lisa Murkowski, Joe Manchin and others.
"We are not doing ourselves any favors when we don't know what we have in our inventory," Murkowski, an Alaska Republican, said at the hearing, which was webcast. "I suspect we have more than we even think we do."
Even some existing U.S. mines are in China's orbit, with domestic production of so-called rare earth minerals reliant on Chinese processing and now caught up in the U.S.-China trade conflict.
"China has a huge head start," said Gavin Montgomery, a battery and mining analyst at the Wood Mackenzie consultancy. "They've just been at this a lot longer than the rest of the world."
Trump Administration officials from the Interior and Energy departments voiced support for the pending legislation.
"We are committed to producing domestically sourced minerals," Joe Balash, assistant secretary for land and minerals management at the Interior Department, said at the hearing.
Survey needed
Just how much cobalt and other minerals used to make EVs are actually in the United States is anyone's guess, as the nation has conducted little by way of a national survey.
Current estimates from the U.S. Geological Survey rely on corporate annual reports, historical data from the U.S. Bureau of Mines and other sources, according to USGS spokesman Alex Demas.
Finding out the mineral composition of a particular region requires sending staff into the field to take rock samples, a timely and expensive endeavor. Murkowski's legislation would require a nationwide reserve analysis for all minerals used to make EVs.
USGS data show, for example, that the United States has 35,000 tons of lithium in reserve, a figure that the agency and industry executives see as conservative.
Albemarle Corp. operates the only U.S. lithium mine, a facility with the capacity to produce about 6,000 tons annually. According to current USGS data, that means that one mine could deplete U.S. reserves within six years.
Several lithium projects are under development across the nation, including those from ioneer Ltd., Lithium Americas Corp. and Piedmont Lithium Ltd. Each aims to produce at least 20,000 tons of lithium per year, according to corporate presentations.
Loan guarantees needed
Jon Evans, president of Lithium Americas, told the hearing that the federal government should offer loan guarantees for U.S. mining and processing projects.
"Federal loan guarantees would confirm the government's commitment to the development of a critical minerals supply chain," said Evans.
Beyond physical reserves, concerns about the lack of U.S. processing facilities are also cause for worry.
China controls about 85 percent of the globe's cobalt sulfate processing, according to WoodMac data. Cobalt sulfate is the version of the metal used in lithium ion batteries.
eCobalt Solutions Inc. aims to produce 1,500 tons per year of cobalt once its Idaho project opens, though that is enough of the metal to make only about 300,000 EVs.
"The fact that China maintains a near monopoly on the critical minerals needed for our defense system makes no sense at all," said Manchin, a Democrat from West Virginia, which has a legacy of mining interests.
The Committee has not yet set a date to vote on the legislation.
Processing capabilities
The United States does have some processing capability. Albemarle and rival Livent Corp. process some lithium domestically. Syrah Resources Ltd. mines graphite in Mozambique and ships it to Louisiana for processing for use in making battery parts.
The United States is also reliant on China for rare earth processing, a group of 17 elements used to make electric vehicles and consumer electronics.
California's Mountain Pass mine, owned by MP Materials, must pay a 25 percent tariff to ship rare earths it extracts from its California mine to China for processing, the collateral damage in the ongoing U.S.-China trade war.
"All we seek is a level playing field to compete as a low-cost producer so we can help establish an EV supply chain in the United States," said James Litinsky, co-chairman of MP Materials.
But those facilities tend to be the exception and investors so far have been wary of funding new U.S. projects in part due to China's dominance, with concerns that any investment would be difficult to recoup.
"Ultimately, these projects have to stack up economically, even if U.S. politicians make it easier to get permitting," said WoodMac's Montgomery.
