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In the US demand for metals critical to the green transition continues to climb sharply. The combined demand for lithium, nickel and cobalt is expected to be 23 times higher in 2035 than it was in 2021. But at the same time the development of new mines that could help fulfil that need has reduced to a crawl.
Since 2002, only three new mines for crucial transition metals have entered production there. According to a report from S&P Global, on average it takes 29 years for a mine to go from discovery to production in the US. That's the second slowest in the world and compares to a global average of about 23 years.
The report says there are three key factors behind the tortoise-like progress; the litigious culture of the US, the complex process for getting permits on federal lands, and a low social acceptance of mining operations.
The US is not short of critical resources. Its reserves and resources of lithium are about twice that of Australia, which produces around half of the world's lithium. It has more copper than Canada and Australia combined. But uncertainty over the timelines for mines in the US has pushed investors to other countries.
Exploration budgets have been 57 pet cent higher in Australia and 81 per cent higher in Canada over the past 15 years. Adding to the problem, more than half of America's mining workforce, some 221,000 workers, is expected to retire by 2029. Today, the country is 100 per cent import reliant for 12 minerals the US government classifies as critical. It's over 50 per cent import reliant on 31 more critical minerals.
China in particular is a concern for the US. Chinese companies control 90 per cent of the world's processing capacity for rare earths and more than half the processing capacity for graphite, cobalt and lithium. Making matters worse, China recently banned the export of certain high-tech materials, including gallium, germanium and antimony, to America in response to US restrictions on semiconductor related exports to China.
America is making moves to reduce its reliance on China. In 2022 the US created the Minerals Security Partnership, which consists of 14 nations and the EU, to develop sustainable supply chains of critical minerals. The US also signed a critical minerals deal with Japan in 2023 and is pursuing similar deals with other allies.
But China's mineral projects benefit from subsidies, easier access to financing, superior processing technology, lower costs, and laxer environmental standards. Breaking its chokehold on the sector won't be easy.
