US miners angered that Pentagon’s mineral storage plan bypasses them

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US miners are clamoring for Washington to approve new domestic sources of minerals used to make weapons, electric vehicles and other high-tech gadgets, and are frustrated that the Pentagon is working with non-US companies to stockpile the materials.

Reuters reported last week that the US Department of Defense plans to increase its reserves from https://www.reuters.com/world/us/exclusive-pentagon-boost-rare-earths-lithium-stockpiles-sources-2022-02-18 to increase lithium, cobalt and other minerals to reduce dependence on China. President Joe Biden confirmed the plan at a White House ceremony this week https://www.reuters.com/business/energy/biden-set-tout-us-progress-critical-minerals-production-2022-02-22.

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Several companies working to open US mines have attempted to supply the Pentagon in hopes that military deals will help secure other customers and funding. But even the most advanced of these projects are still several years away from opening.

This presents a chicken-and-egg scenario for the military. The Pentagon has taken an “all-of-the-top” approach, noting that Congress deems supplies from allies acceptable in the absence of domestic supplies. A White House official said the government’s policy is to source products domestically first whenever possible.

American miners are frustrated that the Pentagon is looking to Canada, Australia and elsewhere.

“I would encourage the Biden administration to focus on getting some of these US projects approved and completed,” said James Calaway, chairman of ioneer https://www.reuters.com/article/us-usa- mining -insight-idINKCN2AT39Z Ltd, which aims to build one of the largest US lithium mines.

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“The military should reach out to us and have serious discussions about how we can help increase domestic lithium supplies.”

Russia’s invasion of Ukraine gave further impetus to the push. Russia supplies about 10% of the world’s nickel, which is used to make stainless steel and batteries for electric vehicles, and is also a major producer of iron ore, platinum and other metals.

The Pentagon has not yet notified Ioneer or Lithium Americas of the stockpiles https://www.reuters.com/business/environment/us-judge-rules-lithium-americas-may-excavate-nevada-mine-site-2021-07 -24 Corp, which is also developing a major US lithium mine.

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“Inventory purchases may not fully sustain a new source of supply, but they can act as an important catalyst to reduce our reliance on unreliable foreign sources,” a Pentagon official said.

The National Mining Association, a trade group for US miners, acknowledged the Pentagon needs to source some metals from overseas but said Biden should move faster to allow domestic mines to ensure long-term supplies.

“There are abundant in-country resources and highly prospective projects currently in the permitting process awaiting administrative approval,” said NMA President Rich Nolan. He warned that approval could be further delayed by Biden’s attempt to change US mining laws https://www.reuters.com/business/energy/biden-set-tout-us-progress-critical-minerals- production-2022-02-22, which have not been updated since the 19th century. Biden said any new US mine must benefit local communities and not harm the environment.

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“These projects would address the urgent task” of increasing domestic supplies, Nolan said.

On Tuesday, Biden MP Materials Inc awarded a $35 million Pentagon grant to help build rare earth mineral processing equipment in California. The company currently relies on Chinese processors https://www.reuters.com/article/us-usa-rareearths-insight-idUKKCN2241KF and Chinese customers for all revenue.

The Las Vegas-based company declined to comment on whether the Pentagon asked it to eventually deliver the supply, but said it aims to “help strengthen the defense industrial base.”

As they seek to develop domestic supplies, many US mining executives admit their industry is caught up in the recent geopolitical infighting over control of the minerals that will power the technologies of the future.

“I think I know which way the wind is blowing, but it’s an election year,” said one industry CEO, who declined to be named because he didn’t want to offend elected officials. “The business we’re in now is strictly politics.” (Reporting by Ernest Scheyder in Houston; Additional reporting by Trevor Hunnicutt and Mike Stone in Washington; Editing by David Gregorio)

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