This opinion column was submitted by Rich Nolan, president and CEO of the National Mining Association.
In the wake of Russia’s invasion of Ukraine, electric vehicles have emerged as a critical answer to energy insecurity. EVs offer an important tool to disentangle the US from the geopolitics of the oil barrel and to insulate American consumers from volatility at the gas pump.
Electric vehicles also hold the promise of putting a significant dent in the war chest of petro-dictators. While sanctions on Russia have proven biting, high oil prices mean Moscow continues to earn $20 billion per month on oil sales.
There’s a growing consensus that the EV moment has arrived. The auto industry is sprinting towards an EV future, and consumers are following with wait-lists for new EVs. Yet despite that momentum — and what it appears to portend for climate and energy security goals — an EV deployment chokepoint is emerging that policymakers are only beginning to grapple with.
Right now, there simply aren’t enough battery materials being produced to meet the auto industry’s voracious appetite. Carmakers are warning with ever greater frequency that the coming battery material shortfall could stop the EV revolution in its tracks.
RJ Scaringe, CEO of EV start-up Rivian, recently said the auto industry’s current semiconductor problems “are a small appetizer to what we are about to feel on battery cells over the next two decades.” From Rivian and Tesla, to Ford and GM, this concern over material shortfalls is universal.
The battery supply chain is already facing the pinch of rising material prices as the gap between demand and supply widens. Battery pack costs—which had been on a long downward trend—are now rising. That’s pushing up vehicle costs right when automakers and climate policy need them to continue to fall. Metals accounted for 40 percent of battery costs in 2015. Today, they account for 80 percent. Where the price of these metals goes, so does the cost of batteries and EVs.
Paying far more for battery metals might be a best-case scenario for some automakers. But with demand exploding and supply not keeping up, it’s likely that automakers are going to be millions of batteries short in the years ahead, as ambition outpaces a supply chain struggling to keep up. And the supply chain that does exist is completely dominated by China.
With US mineral import overreliance already at an alarming level, and investment in mineral demand growing far faster than supply, the US is poised to trade Moscow’s and Tehran’s influence over the oil market for Beijing’s dominance of mineral supply chains.
The Biden administration recognizes the scale of the minerals challenge and has taken important steps to begin to address it — including the use of the Defense Production Act to boost mineral production and processing. But a unified, whole-of-government minerals strategy does not yet exist. Worse still, there are policymakers determined to raise new barriers to domestic mineral production despite the urgent need to reinvigorate this pillar of our industrial base.
Led by House Natural Resources Chair Raúl Grijalva (D-Arizona), some lawmakers want to upend the nation’s General Mining Law. The proposed sweeping taxes, fees and duplicative regulations in this legislative effort come from a tired playbook that is astonishingly out-of-sync with the moment.
There is a need for mining policy reform, but that reform should serve to reduce barriers to domestic production — not raise them. As demand for minerals explodes — not just for batteries but for a range of technologies to underpin this energy transition — it’s critically important that the US shapes its mining policy to respond to the urgency of the moment.
While it takes just two years to get a new battery megafactory up and running, it regularly takes a decade or more to permit new US mines — if they are approved at all.
The US can build a secure, responsible mineral supply chain under existing world-leading environmental and labor standards that underpins EV deployment. But it won’t happen if we don’t rise at the moment and recognize the intersection of mining policy with our energy security goals. Building our electric future begins with mining it.
Rich Nolan is president and CEO of the National Mining Association.
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