1、THE MOSAIC APPROACH: a Multidimensional Strategy for Strengthening Americas CriticalMinerals Supply ChainReport prepared byDuncan Wood, Alexandra Helfgott, Mary DAmico, and Erik RomaninSUPPLYCHAIN稀缺资料共享TGdata_share2021稀缺资料共享TGdata_share2021l 3 Executive SummaryThe United States faces a troubling sce
2、nario when it comes to the supply chain for critical minerals. Rapidly increasing demand, under-developed national resources, intense international competition, and years of ne-glect in this issue area place the U.S. at a distinct disadvantage vis-vis China in securing access to the met-als and Rare
3、 Earth Elements that are vital for the energy transition and for geopolitical ambitions. This paper reflects the dialogue sustained by a high-level group of stakeholders in the summer of 2021 and argues that the United States must take a number of key steps to make the critical minerals supply chain
4、 more resilient.Central among these steps are: Government actions: Explicitly recognize the link between critical minerals on the one hand and geopolitical and cli-mate goals on the other Prioritize the development of national resources and processing facilities in the United States, while also embr
5、acing new technological solutions Focus on strengthening human capital in the critical minerals sector Streamline the permitting process for opening new mines Consider the stockpiling of critical minerals Private sector actions Lower the risk profile of mining for investors to facilitate investment
6、in the industry Seek long-term, fixed price contracts to guarantee supply Invest in new technologies to lower costs Invest in human capital through universities and community colleges, as well as lifelong learning approaches Highlight how mining contributes to a clean energy future International act
7、ions The U.S. must work with international allies and partners to develop new resources Leverage the USMCA and strong mining industries within North America Work with international partners to create a global regime for critical minerals that emphasizes minimum standards for ESG稀缺资料共享TGdata_share202
8、14 l The Mosaic Approach: a multidimensional strategy for strengthening Americas critical minerals supply chainIntroductionIn the summer of 2021, the Wilson Center convened a Critical Minerals Working Group, made up of stake-holders from industry, academia and civil society, to examine the vulnerabi
9、lities that exist in the supply chain, and to discuss how the private sector and gov-ernment can address them. This report draws on the major insights and recommendations of the impres-sive knowledge and experience of the working group and offers an alternative channel that feeds into the stakeholde
10、r engagement process called for in Presi-dent Bidens review of Americas supply chains.The working group identified three main vulnerabili-ties in the supply chain. First, the United States must face the ever-rising demand for critical minerals while constrained by chronic underinvestment in mining,
11、processing, infrastructure, and human capital. Sec-ond, the United States must compete on a global ba-sis against China and the European Union for access to critical minerals and must address the geographic concentration of both extractive and processing activities. To reference the most obvious exa
12、mple, Chinas dominant position in the supply chain stems not only from its ownership and control of critical minerals mines, but also processing facilities. Third, there is a governance challenge that impacts the first two vulnerabilities in which mining firms from the United States and other wester
13、n countries must adhere to justifiably stringent compliance measures in the areas of environment, society and transparen-cy/anti-corruption regulations, regardless of whether they are operating domestically or internationally. Permitting and legislative restrictions on U.S. min-ing firms place them
14、at a competitive disadvantage compared to Chinese competitors and provide a strong disincentive for developing resources within the United States.Our Working Group recognizes that there is no silver bullet to respond to these challenges, but rather the need for a “Mosaic Approach, ” involving action
15、 by both the private sector and the government at the national and interna-tional levels. In the private sector, there must be increased strategic investment in resource develop-ment and process-ing, technology, and human capital, which must accompany efforts to change the risk profile, real and per
16、ceived, of the mining sector. Furthermore, the industry must concretely improve relations with both decision-mak-ers and the general public. For the government, one of the most important steps to be taken is perhaps the easiest: the explicit and repeated recognition that critical minerals are an ess
17、ential component of both the United States geopolitical competitiveness and its fight to mitigate climate change. This acknowledge-ment by U.S. political leaders that neither climate nor geopolitical goals can be reached without secure access to critical minerals will help to bring about a paradigm
18、shift in thinking about the sector, and the required legislative and regulatory change needed to encourage investment in the extraction and process-ing, infrastructure, recycling, and human capital.Finally, the report examines international actions that must accompany these private and governmental
19、ef-there is no silver bullet to respond to these challenges, but rather the need for a “Mosaic Approach”稀缺资料共享TGdata_share2021l 5 forts. The United States and its allies must invest sig-nificant diplomatic and economic capital into building a more effective global regime for the governance of critic
20、al minerals extraction. The harmonization of standards at a global level will reduce the advantage currently held by Chinese firms and other geopoliti-cal rivals. Of particular importance will be efforts to increase transparency and anti-corruption measures. The United States must look to its allies
21、 and friends to play a more important role in the supply chain, and the U.S. must be willing to work with them to develop resources and standardize practices. The U.S. must also be open to using ally standards as a starting point, rather than reinventing the wheel through the development of new stan
22、dards which will not only cost time, but will also create discrepan-cies between standards across nations. Another key step is to recognize the urgency of the situation and prioritize action. The moves taken by recent U.S. administrations provide some hope, but efforts must be sustained and strength
23、ened. In that spirit, this report offers an optimistic perspective that focuses on solutions rather than obstacles. Veliki Krivelj mine of Zijin Bor Copper, one of the largest copper reserves in the world, owned by the Chinese mining company Zijin Mining Group in Bor, Serbia on May 2, 2021. Source:
24、Mirko Kuzmanovic/稀缺资料共享TGdata_share20216 l The Mosaic Approach: a multidimensional strategy for strengthening Americas critical minerals supply chainAn Uncertain Present and a Future Full of Concern: Mapping the Supply ChainIn its discussions, the Critical Minerals Working Group focused on some of t
25、he raw materials which are crucial for environmental sustainability goals, national security, and economic prosperity. These in-cluded lithium, nickel, cobalt, copper, and certain rare earth elements which are needed to manufacture lithium-ion batteries, motors of electric vehicles and windmills, as
26、 well as many other applications.1 Gov-ernments and business leaders have set ambitious goals in hopes of mitigating the dramatic effects of global climate change. These involve technological responses that depend heavily on critical minerals. Minerals such as lithium, nickel, and rare earth element
27、s already play an important role in the global economy, yet demand for these raw materials is pre-dicted to increase exponentially. To understand the critical minerals supply chain (CMSC), it is important to detail the scope of the demand of these minerals, their uses, and where they are located, ex
28、tracted, and processed. The U.S. and many international partners face an inherent disadvantage due to the geographical concentration of these minerals. Rare earth elements (REEs) are abundant throughout the earths crust,but only sufficiently concentrated to be mined and processed economically in cer
29、tain locations. China is one of such locations, possess-ing one of the largest known REE reserves in the world. The country constitutes about 44 million2. The majority of this ore is located in the Chinese autonomous region of Inner Mongolia. China mines the most REEs of any nation on earth and is r
30、espon-sible for nearly 65% of all extraction. This number is likely higher if we include black-market and unofficial REE mining in the Peoples Republic of China. Not only does China mine the most REEs, the majority of REE separation and processing also occurs in 44 millionmetric tonsChina has over 1
31、/3 of all REE ReservesSource: https:/ 7 China, with around 85% of all processing taking place in the country. In terms of REE mining, the United States is a distant second, extracting only about a quarter of the amount mined in China. The sole mine in the United States extracting REEs is the Mountai
32、n Pass mine operated by MP Materials Corp. in California which in 2020 contributed 16% of global supply of REEs, according to USGS3. Other notable miners of REEs are Myanmar and Australia.The lithium supply chain presents a different picture as it is dominated to a lesser extent by one country. The
33、largest proven reserves are in Chile, Australia, Argentina, China and the U.S. Lithium typically comes from rich underground brine deposits or hard-rock spodumene deposits. Australia is the lead producing nation, contributing about 46% of global mine production, predominantly from its hard-rock lith
34、ium deposits in Western Australia. China is in third place mining about 17% of lithium in 2019, al-though they are responsible for nearly 60% of global lithium processing. The U.S. has one smaller lithium mine, contributing 5,000 metric tons to the 350,000 metric tons of global supply4. Cobalt is in
35、tegral to the manufacturing of lithium-ion batteries and other advanced technologies. While there are a number of uses for cobalt, most cobalt that is mined is used to make lithium ion batteries (around 57% according to the Cobalt Institute5). The Democratic Republic of Congo (DRC) is the worlds lar
36、gest producer of cobalt, producing roughly 90,000 metric tons of the worlds 140,000 metric tons in 20196. The Copper Belt in Central Africa contains the worlds largest proven cobalt deposits with other significant deposits also located in Australia, Cuba, the Philippines, and Canada. In the US, coba
37、lt resources are primarily located in Minnesota and Idaho. Michigan is home to one cobalt-producing mine, but this mine only contrib-utes one percentage of global cobalt supply. While most of the worlds cobalt is mined in the DRC, many mines are owned by multination-al mining companies and investors
38、. Chi-nese-owned mining companies, including China Molybdenum, control about 70% cobalt mining and also refine 70% to 80% of the worlds cobalt. While less than 20% of DRC cobalt comes from artisanal and small scale mines, the unfair labor practices associated with these operations has tarnished the
39、reputation of cobalt and led to many Western OEMs seeking to reduce or even eliminate cobalt from their batteries.7 As many entities search for alternative sources of cobalt, some have looked to the ocean floor. It is estimated that over 120 million tons of cobalt can be found in manganese nodules a
40、nd crusts on the floor of the Atlantic, Indian, and Pacific Oceans. These resources will require time and large-scale investments to develop. Not only does China mine the most REEs, the majority of REE separation and processing also occurs in China稀缺资料共享TGdata_share20218 l The Mosaic Approach: a mul
41、tidimensional strategy for strengthening Americas critical minerals supply chainOther CountriesSouth AfricaRussiaPhilippinesPalau New GuineaMoroccoMadagascarCubaCongoChinaCanadaAustraliaU.S95,0003,6002,8006,3007001,9004,7001,8006,4002,3003,2004,700600COBALT MINING PRODUCTION (data in metric tons)Oth
42、er CountriesZambiaRussiaMexicoRepublic of KoreaMoroccoKhazakstanGermanyCongoChinaCanadaAustraliaU.SChileJapanPeruPoland3609102,0003802902,4009,8003,5001,0601,0603304706805401,60067001,100COPPER MINING PRODUCTION (data in thousand metric tons)Source for all pie charts on these 2 pages: USGS, Critical
43、 Minerals Yearbook (pg 8) (https:/pubs.usgs.gov/periodicals/mcs2021/mcs2021.pdf)稀缺资料共享TGdata_share2021l 9 ArgentinaBrazilChinaAustraliaU.SChilePortugalZimbabwe 40,0001,90090018,00014,0001,2006,200LITHIUM MINING PRODUCTION (data in metric tons)Other CountriesBrazilChinaCanadaAustraliaU.SCubaDominican
44、 Republic Russia Indonesia New Caledonia Philippines 1,100760,000320,000280,000290,000200,000170,0001,1001,100120,00049,00047,000NICKEL MINING PRODUCTION (data in metric tons)Other CountriesBrazilChinaAustraliaU.SIndia Russia Madgascar BurmaBurundiThailand Vietnam 3,000140,0008,00030,00017,00038,000
45、5001002,7001,0002,000RARE EARTH MINING PRODUCTION (data in metric tons) 稀缺资料共享TGdata_share202110 l The Mosaic Approach: a multidimensional strategy for strengthening Americas critical minerals supply chainIt is vital here to emphasize that cobalt demand is growing significantly. While the amount of
46、cobalt per vehicle is indeed reducing as battery chemistries shift, overall demand is multiplying so rapidly with the rise in demand for battery capacity that the DRC remains vitally important. Ocean floor and non-DRC supply provide alternative sources in the longer term, and recycling too, but duri
47、ng this decade the DRC is pivotal, which means that the U.S. government and private firms have little choice but to build ties with the country.Nickel and copper are two other metals integral to the global energy transition and national security. Copper production is dominated by Chile followed by P
48、eru, China, the United States, and the DRC8. Copper and copper alloys are utilized in building and infrastructure projects. Additionally, coppers conduc-tivity makes it a key mineral for electrical and elec-tronic products. Copper is essential for anode current collection, cell wiring, and for EV ch
49、arging infrastruc-ture. Due to the importance of electrification to meet global environmental sustainability goals, copper is a strategic and important resource. Nearly 80% of global nickel is used to produce super alloys and strong materials, such as stainless steel. The amount of nickel used for b
50、attery manufacturing is quickly increasing. The largest nickel producing countries in the world are Indonesia, the Philippines, Russia, New Caledonia, a French territory in the South Pacific, and Canada. The U.S. is home to only one nickel-producing mine, located in Michigan. Nearly all of U.S. prod
