Shoring Up The Critical Mineral Supply

The technologies that define much of modern life, including smart phones, televisions, and LED lights, rely on a limited number of relatively rare metals and minerals. But these consumer staples have recently gained new competitors for these essential resources. The push for renewable energy generation and vehicle electrification—sometimes called the green transition—has placed increased strain on critical mineral supply chains. For example, electric vehicles require six times the critical mineral resources of gasoline-powered vehicles, and a wind farm demands nine times the mineral input of a similarly sized natural-gas plant.

Experts expect the pressure on global supply chains to increase with the growing political support for the green transition and the market viability of renewable energy technologies. For example, limiting global warming to two degrees Celsius—a goal commonly used by climate scientists—would quadruple global demand for minerals critical to renewable energy systems. And achieving global net-zero carbon emissions would require supply equally six times current consumption of these minerals.

Ironically, the growth in demand for critical minerals presents serious environmental challenges. Critical mineral mining and processing is energy-intensive and highly dependent on fossil fuels. Merely scaling up existing practices would vastly increase carbon emissions from critical mineral mining, undermining the goals of the green transition. In addition, widely used mining methods produce great quantities of toxic waste, including dust, waste gas, wastewater, and radioactive residue. These methods also consume vast amounts of water, raising general concerns about groundwater pollution. Concerns about water use are especially pronounced in the arid regions where critical minerals are often mined, such as lithium in Nevada and parts of South America.

Experts explain that fulfilling the environmental promises of renewable energy will require improvements in critical mineral mining and processing practices. But, they note, it will also require recycling and reusing mineral-dependent products, such as lithium batteries and solar panels.

Western policymakers view dependence on minerals sourced from China—which dominates all levels of the global supply chain for nearly all critical minerals—as an economic and national security vulnerability. Many policymakers and scholars also raise concerns that China’s reliance on coal-fired power and its lenient approach to environmental regulation will worsen the environmental costs of critical earth mining and processing. And ongoing Chinese efforts to secure exclusive mining rights worldwide, especially in Africa, are likely to intensify existing national security and environmental concerns.

Accordingly, policymakers increasingly call for the United States and its allies to diversify supply chains by increasing domestic and foreign investment in critical minerals. With demand reaching unprecedented levels, many argue that these efforts are vital to ensure national security and reliable, sustainable governance over the global critical mineral supply. But the feasibility of these efforts is uncertain, given the possible conflict between President Donald J. Trump’s promises to scale back federal investment in renewable energy development and his protectionist, anti-China trade stance.

In this week’s Saturday Seminar, scholars discuss the critical mineral supply chain and the global shift to renewable energy.

• In a report for the Center for Strategic and International Studies, Daniel F. Runde and Austin Hardman argue that achieving the energy transition and securing national security amid the projected spike in demand for critical minerals requires a comprehensive federal response. Noting that at least six federal agencies are involved in drafting mining regulations, Runde and Hardman propose designating a lead agency to create a comprehensive federal plan for critical minerals. This approach would avoid “duplicative or clashing” critical mineral policy agendas, suggest Runde and Hardman. Streamlined federal control, they argue, would facilitate increased domestic mining and processing while laying a stronger foundation to pursue international partnerships.
• In a report for the International Energy Agency, C. Michaels, Alexandra Hegarty, and Joyce Raboca recommend enhancing supply-chain transparency and directing public spending to improve environmental, social, and governance practices in critical mineral extraction and processing. Transparency increases both the reputational benefits of good corporate practice and the reputational costs of bad practice at all levels of the critical mineral supply chain, Michaels, Hegarty, and Raboca explain. They argue that combining reputational incentives with robust public financing, such as renewable resource development tax credits, would motivate corporations to create an economically and environmentally sustainable critical mineral supply chain.
• In a recent report published by the Columbia Center on Sustainable Investment, Perrine Toledano, Martin Dietrich Brauch, and Jack Arnold of Columbia University discuss how to achieve circularity in the critical mining sector by recycling and reusing critical mineral resources to minimize environmental footprints. Toledano, Brauch, and Arnold examine circularity approaches in nine countries, noting that few have dedicated policies to encourage or achieve circularity in critical mineral use. To address this shortfall, they recommend that governments strengthen their regulatory frameworks, expand research and development funding, and implement better critical-mineral use monitoring systems. Toledano, Brauch, and Arnold conclude that achieving circularity in mining activities is crucial to reaching the Paris Agreement goal of net-zero carbon emissions by 2050.
• In a report for the Breakthrough Institute, researcher Seaver Wang and several coauthors explore the debate over clean energy’s environmental impact. The Wang team points out that technological innovations have greatly improved the efficiency of renewable energy systems, including by reducing material requirements for solar panels and offshore wind turbines. Wang and his coauthors argue that recycling programs and regulations promoting longer lifespans for clean energy technologies could further reduce critical mineral demand. They conclude that although room for improvement remains, the cumulative environmental footprint of renewable energy sources is already significantly smaller—two and twenty times smaller, respectively—than that of coal and gas.
• A recent report by the S. Government Accountability Office (GAO) urges the United States to diversify its sources of critical minerals, recommending increased reliance on nontraditional sources such as the byproducts of critical mineral extraction, processing, and use. GAO notes that these byproducts include mining waste and wastewater, as well as byproducts of coal and geothermal power production. GAO suggests policies such as tax credits and good Samaritan legislation to encourage the extraction of critical minerals from nontraditional sources while offering protection from environmental liabilities. Ultimately, GAO argues that this approach would reduce dependence on foreign suppliers and limit the net environmental harms of critical mineral use.
• In an article for the Center for American Progress, Mark Haggerty, Jackson Rose, and Toni Ruth explain that many mining zones, including areas where critical minerals are mined, function as “extractive economies” that fail to benefit local communities. The authors recommend federal policy inventions such as early impact planning to prevent unexpected infrastructure crises, community benefit agreements to diversify local economies, and asset-based revenue management to ensure economic and community stability. Haggerty, Rose, and Ruth argue that federal policymakers can draw inspiration from state efforts, including Montana’s Hard-Rock Mining Impact Act, which helps individuals in mining zones to negotiate with mining companies, and the mineral tax that Montana imposes on mining companies to replenish community funds.