The technology that undergirds decarbonization requires a lot of minerals, and those minerals are often found or processed overseas — really often in China. The Biden administration thought this was a problem, so as it subsidized the domestic use and manufacture of solar panels, wind turbines, and battery-electric vehicles and the deployment of green energy, it also tried to nudge the critical mineral industry mining and refining industries to be more American, with subsidies for battery plants and loan guarantees for lithium mines.
The Trump administration halfway agrees with its predecessors: It wants to see an American minerals industry, but it isn’t so much interested in the renewable energy part. During his Day One fusillade of executive orders, the president hammered the wind industry, scrapped the Biden administration’s goals for vehicle electrification, and encouraged faster permitting for nearly every type of energy generation other than wind, solar, and storage.
While new clean energy projects won’t disappear overnight, the growth trajectory of the sector may be imperiled, which in turn means that incremental future demand for critical minerals in the United States has likely diminished. Demand certainty is incredibly important for the mining sector — it takes an estimated 29 years from resource discovery to production in the United States, according to S&P — as exploration is a highly uncertain and expensive process. Because of this, the industry as a whole is already incentivized to undersupply the market, explained Arnab Datta, the managing director of policy implementation at Employ America.
“If there’s uncertainty about demand, it will hold back investment,” Datta told me. “If you under-invest, you get suboptimal profits. If you over-invest, the risk is bankruptcy.”
Many minerals projects the Biden administration greenlit and supported were closely tied to downstream decarbonization goals. The nearly $1 billion loan guarantee for the Ioneer Rhyolite Ridge refining project for lithium mined in Nevada, for instance, would “finance the on-site processing of lithium carbonate that would support production of lithium for more than 370,000 EVs each year,” the Energy Department’s Loan Programs Office said in an announcement on January 17.
In December, the LPO issued a $750 million conditional loan guarantee for a synthetic graphite facility in Tennessee that was “expected to produce 31,500 metric tonnes per year of synthetic graphite, which can support the production of lithium-ion batteries for approximately 325,000 EVs each year.”
And America’sfirst graphite processing plant, which supplies Tesla’s battery-making operations from Vidalia, Louisiana, does so with help from a $100 million Department of Energy loan.
The Trump approach to stimulating investment is still evolving — the Department of Energy doesn’t yet have a confirmed secretary — but it appears to focus largely on permitting mining and refining projects with a focus on the defense industrial base.
The executive order “Unleashing American Energy” asks agencies to “identify all agency actions that impose undue burdens on the domestic mining and processing of non-fuel minerals and undertake steps to revise or rescind such actions.” Trump also asked the secretaries of the interior and energy to make “efforts to accelerate the ongoing, detailed geologic mapping of the United States,” and “ensure that critical mineral projects, including the processing of critical minerals, receive consideration for Federal support.”
Many of the minerals used for renewables and clean energy projects also have defense applications. The most obvious exampleare the suite of minerals found in batteries — lithium, cobalt, graphite — which are as key for powering electric vehicles as they are for building drones.
“If you’re going to make a Venn diagram of what critical minerals you need for sustainable energy technologies, battery technologies, solar cells, and electricity infrastructure, that circle of critical minerals sits inside of the circle of critical minerals that you need for defense purposes,” explained Catrina Rorke, the senior vice president for policy and research at the Climate Leadership Council.
But renewable energy applications can quickly outpace defense. According to the Breakthrough Institute’s Seaver Wang, “In many cases the business for these projects would be difficult to sustain on the defense applications alone unless DOD is throwing tons of money to make those projects too big to fail.”
The F-35 fighter jetuses around 900 pounds of rare earth elements, and the Pentagon is looking at maintaining a fleet of about 2,400. A single offshore wind turbine, meanwhile, can use up to thousands of pounds. To get a sense of how much rare earth metal even a modestly sized offshore wind operation requires, you’d have to look at something like a destroyer, which needs over 5,000 pounds of them.
Not all analysts see a strong tension between the Trump administration’s renewable energy policy and its critical minerals policy, however. Morgan Bazilian, director of the Payne Institute and a public policy professor at the Colorado School of Mines, told me that it was “simplistic” to say “you need supply and demand to meet somewhere.”
“There’s still going to be a need for copper whether or not the U.S. builds a lot of transmission lines,” Bazilian said. “There’s still going to be the need for light and heavy rare earths, and there’s a need for tellurium and nickel on global markets. The problem is not robust demand in the United States, which is one piece of the pie.”
No matter what these minerals are used for or where their ultimate destination is, the United States is desperately looking for any foothold in mining and processing in order to compete with China, which dominates many sectors of the industry.
“What we need to do now is to get some domestic mining and processing going,” Bazilian said. The U.S. “doesn’t have to be dominant or be the biggest producer of these things. We need to get on the map a little bit. We have precious little going on.”
Even if U.S. demand slows, “I don’t think it will stop,” Bazilian said. “I don’t see that in itself kneecapping anything.”
Regardless of the level of demand, it will need mines and processing facilities to meet it, which requires permitting and financing. What investors and companies looking to open mines and refining facilities need is not just assurance of demand over the long term, Rorke explained, but also the go-ahead to build.
“If you’re only focused on the demand side,” Rorke said, “you’re really investing in a long-term problem because you are not matching it with the supply that can come on to satisfy that demand over the long term.”
Editor’s note: This story has been updated to correct Datta’s affiliation and title.
Thermasol
