Critical Minerals Production and Development
Chinese withdrawal symptoms
In the US, critical mineral status is determined by the United States Geological Survey (USGS) whose methodology is a supply-side approach using historical data to determine criticality within the context of the economy and national security. Critical minerals are those essential to the US economy, technology, or national security with a high supply risk.
Critical minerals are challenging to source due to limited global availability, geographic concentration of supply, or reliance on a small number of supplying countries. The International Energy Agency (IEA) estimates the world’s top-three producing nations control well over three-quarters of global output for lithium, cobalt and rare earth elements. The level of concentration is even higher for processing operations, with China dominating, processing nearly 60% of lithium, 65% of cobalt, and close to 90% of rare earths, according to Brookings.
Lithium production and development
Lithium took the spotlight in 2022 as the EV craze hypnotized Americans, but the mineral’s price plummeted 80% over 2023. The lithium market is immature compared to established metals like copper and high prices lead to demand destruction and new supply. With confusing futures pricing, market leader China made the market opaque, leaving it unclear what a realistic global reference point should be. Despite this, demand grows. US demand alone is predicted to increase 29% year-on-year through 2030, according to Fastmarkets data. To reach net zero, lithium will see the fastest growth among the key minerals, with demand up over 100-times its 2021 level by 2050, according to the IEA.
Global lithium supply is predicted to more than double by 2026. However, if prices remain low, this supply is unlikely to become available. US-based Albemarle held numerous spodumene concentrate and lithium carbonate auctions in 2024 to boost market transparency. The firm reported US$1 billion in losses in Q3 due to price drops. Albemarle owns the longstanding sole producing lithium mine in North America— the Silver Peak mine in Nevada— where lithium is produced from brine. US consumption majorly outweighs its production. That will change soon, according to Jonathan Evans, president and CEO of Lithium Americas: “The US produces roughly only 0.5% of the lithium consumed globally and only 2% of it is processed in the US. Thacker Pass will dramatically change that by initially increasing US output of lithium by up to 8 times and scaling up from there with production expansion plans.”
Lithium Americas’ Thacker Pass is on schedule to begin operations in 2027. Recent investments moved the project into major construction in 2024. General Motors will contribute US$625 million in cash and letters of credit, while the US Department of Energy will provide a US$2.26 billion loan under the Advanced Technology Vehicles Manufacturing Loan Program for financing the construction of the processing facilities. “The DOE’s support to advance Thacker Pass to production will significantly improve domestic output of critical lithium supply to meet the growing domestic need. This essential loan helps Lithium Americas reduce dependence on foreign suppliers and secure America’s energy future,” said Evans.
The DOE is looking to the Silver State to supply the country long term, bringing another supplier to the table in 2024: American Battery Technology Company (ABTC). The DOE awarded ABTC US$ 57.7M to build a commercial-scale lithium hydroxide refinery, “to process claystone from our property into battery-grade lithium hydroxide. We completed the pilot plant in 2024 and recently began producing battery-grade lithium hydroxide” said Ryan Melsert, ABTC’s CEO and CTO.
The plant will be supplied by the company’s 21-million-ton LCE resource. The firm is working to build a commercial-scale refinery with a 30,000 t/y capacity.
In October 2024, Australian-based Ioneer received its federal permit for its Rhyolite Ridge lithium-boron project, making it first US lithium project approved by the Biden Administration as part of the county’s efforts to accelerate domestic critical mineral production. "Our initial Phase One project is expected to produce about 22,000 t/y of lithium. This deposit can potentially supply enough lithium to power more than 50 million electric vehicles, assuming current efficiency levels," said Bernard Rowe the managing director.
The US relied on China for 70% of its lithium-ion batteries in 2023, according to an analysis by the Atlantic Council. Displacing this amount by 2030 is unlikely, to say the least. However, investments in lithium-ion batteries increased around 7-fold since the enactment of the Inflation Reduction Act in 2022. With president Donald Trump’s claims of dismantling the IRA, this investment will likely dwindle.
Rare earths production and development
Rare earths are used in magnets, which underlie everything that powers modern technology, from electric vehicles and renewable energy systems to advanced medical devices and consumer electronics. China’s REE production increased at the beginning of this century and peaked at 95% of the global share by 2010. It decreased to 60% in 2019, according to Brookings. This number may be an underestimate, however. “China controls 85% of the oxides and an alarming 97% of the metal used for magnets. This creates serious risks for global supply chains. If China were to limit exports, it could halt production in critical industries, such as defense and healthcare”, said Nicholas Myers, CEO and co-founder of Phoenix Tailings, a company producing neodymium and dysprosium from recycled magnets.
The US has just over a 10% share of global REE production. MP Materials is the only significant REE producer. The company is minority owned by Shenghe Resources, a partly Chinese-state-owned company that is also the sole purchaser of its output.
Creative measures are required to reduce the US’s 95% import reliance. Energy Fuels saw this as an opportunity: “Past efforts by US, Australian, European and Canadian companies to compete in the critical minerals space, particularly against China, have been largely unsuccessful. Our solution involves creating a new supply chain using byproduct monazite and our Utah facility to produce advanced rare earth materials,” explained Curtis Moore, SVP of marketing and corporate development.
So far, the effort has been successful. “In 2024, we installed a circuit capable of producing up to 1,000 t/y of neodymium praseodymium oxide (NdPr), enough for a million electric vehicles,” Moore added.
Investors are still learning how to evaluate REE projects, as China dominated the market for so long. Some hold that China is using depressed prices to secure global offtake agreements with projects struggling to secure financing. Idaho Strategic Resources is being strategic in their approach to circumvent this, said Travis Swallow, stakeholder and corporate development lead: “Our cash flow from our gold operations allows us to advance our REE projects despite this downturn. The Idaho National Laboratory supports our approach, understanding that reprocessing waste will not meet future demand.”
Antimony, manganese and zinc development
Manganese is a key component of EV batteries. Zinc creates protective coatings for solar panels and wind turbines. For perspective, a 100 MWh solar panel park requires 240 tons of zinc, according to the World Economic Forum. Manganese is a non-substitutable metal for all steel production. The U.S. is 100% import reliant for manganese and 76% for zinc. “China controls about 96% of the high-purity manganese sulfate monohydrate (HPMSM) market with only two HPMSM plants outside of China”, said Brian Savage, CEO of Electric Metals, an exploration company. HPMSM is a non-replaceable element in EV batteries and energy storage systems.
One of the few advanced mining projects in the US, South32’s Hermosa manganese-zinc project in Arizona, was confirmed as the first FAST-41 mining project in May 2023, which will introduce efficiency into the federal permitting process. In 2024, South32’s board approved a US$2.16 billion Final Investment Decision to develop the Hermosa project’s zinc deposit. “It has the potential to be one of the world’s largest zinc producers. The feasibility study for Hermosa’s zinc-lead-silver deposit also showed an expected initial operating life for the mine of approximately 28 years, with potential for further exploration upside,” said Pat Risner, president of Hermosa at South32.
Antimony is critical for national defense as the metal is used in ammunition, night vision goggles, infrared sensors, bullets, precision optics, and the electronics industry, including semiconductors, cables and batteries. In August 2024, China announced export restrictions on six antimony related products and gold-antimony smelting technology. 63% of US antimony imports are from China; now, the country must look elsewhere. A significant site exists within the country’s borders, according to Jon Cherry, CEO and president of Perpetua Resources: “We plan to produce approximately 148 million lb/y of antimony, which will supply about 35% of the US demand.”
With global tensions rising, the government is wasting no time: “In September 2024, Perpetua Resources received its Final Environmental Impact Statement and the Draft Record of Decision authorizing the Stibnite gold project. Perpetua is on track to receive our Final Record of Decision by the end of 2024. The US military invested US$75 million. We also received a letter of interest from the US Export-Import Bank for up to US$1.8 billion to assist with capital costs,” continued Cherry.
Dynamics are already shifting: “With China limiting exports and dominating the global market, prices surged from US$12,000/t to US$25,000/t. This trend is likely to continue. An antimony bull market could be even more dramatic than a gold bull market due to its strategic importance and constrained supply”, said Christopher Gerteisen, CEO of Nova Minerals, a firm advancing an antimony-gold project in Alaska with hopes of producing antimony trisulfide, essential for munitions, within 18 months.
There is no doubt that the US’s supply of critical minerals is dominated by foreign control. President Donald Trump declares that narrative will change, with a potential 60% tariff on all Chinese imports. He walks a thin line. A domestic-only strategy for critical minerals is unfeasible. Geologically, many of the minerals are either not found in the US or are not economically viable to extract domestically. The US holds less than 1% of the world’s nickel, cobalt, and graphite reserves, only 1.3% of the world’s rare earth elements, and 1.5% of the world’s manganese. Such dramatic measures will likely only raise national debt while elongating the timeline to achieve net zero.
Article header image courtesy of Lithium Americas