As the United States continues to transition to a greener, lower-carbon economy, environmental activists are monitoring the human rights implications of extracting critical minerals. Producing more electricity from renewable energies, such as wind turbines and solar panels, will lessen our dependence on fossil fuels, thereby reducing the amount of carbon the U.S. produces, including the decrease in emissions generated from cars as electric vehicles (EVs) gain popularity. These technologies, however, depend on mineral mining for operation and storage, most significantly, batteries to hold an electrical charge. These are critical minerals, and here are five things to know about them.
- The transition to a low-carbon economy depends on mining for minerals
Critical minerals are required for batteries and other renewable technologies. “Critical minerals” is a term used by government agencies to describe minerals considered essential to national security and the economy that are vulnerable to foreign supply disruptions. The United States Government (USG) has identified around 50 critical minerals. Green energy minerals are those that are critical for the transition to a low-carbon economy. The USG has identified sixteen green energy minerals. Of those sixteen, eleven are also critical minerals. These minerals include lithium, cobalt, nickel, copper, and graphite. The Inflation Reduction Act (IRA) contains a list of critical minerals, including lithium, cobalt, nickel, graphite, tin, and aluminum. Renewable technologies such as solar, wind, and electric vehicles (EVs) rely on these minerals for their operation and, more importantly, for the batteries that hold their charge.
Lithium-ion batteries are currently the most widely available and cost-efficient form of battery. EVs are poised to be the most mineral-dependent of these technologies moving forward. Shane Lasley, of Metal Tech News, writes: “While each battery and automaker has its own special formula, the average lithium-ion battery powering a sedan-sized EV needs around 146 pounds of graphite, 88 pounds of nickel, 29 pounds of cobalt, and 20 pounds of lithium.”
- A “Gold Rush” has started in the race to acquire green energy minerals
The United States and the world are poised to experience a gold rush-style procurement of critical minerals for renewable energy and EVs. This is understandable and necessary– the United States needs to alleviate its massive carbon footprint. Transitioning to low-carbon technologies will ensure sustainable energy and the energy infrastructure for the future, position the United States as a world leader in green energy production and jobs, and safeguard national energy security. But the tricky issue of mining, which is environmentally destructive and intrusive for frontline communities, remains. Often, the narrative deems that we can either subject frontline and Indigenous communities to the worst effects of mining activities or fail in the fight climate change.
This is far from the truth; we can place comprehensive environmental protections, mine clean-up plans, and human rights protection policies to protect local and Indigenous communities and the environment while becoming a leader in fighting climate change. It’s just a matter of prioritizing human rights over profit margins.
- While U.S. politicians were debating whether climate science is real, China secured control of many of the world’s green minerals
The fossil fuel industry has led a years-long campaign to delay climate action in the United States. While U.S. politicians debated whether climate change science was “real,” the Chinese government recognized that the world would need to shift to low-carbon energy and began acquiring many of the world’s largest green energy mineral deposits. Both the Obama and Trump administrations missed this early window.
Critical minerals aren’t necessarily rare, and potentially significant despots of lithium have been found in the Salton Sea and Imperial Valley in Southern California, and hardrock deposits in Nevada are already beginning to be extracted. Known deposits of critical minerals are found in South America, which holds significant reserves of lithium. Chile, Argentina, and Bolivia, an area that is known as the lithium triangle, are estimated to hold over half of the world’s known lithium deposits, and reserves of cobalt can be found in the Democratic Republic of Congo, which holds an estimated 3.4 million metric tons of cobalt, almost half the world’s known supply, but is rife with human rights abuses and instability.
However, a big impediment to the United States being energy independent in this realm is that it is currently largely dependent on foreign sources for these raw materials as well as processing them into final products, which is mainly dominated by China. China overwhelmingly dominates the global refining of critical minerals. It also is a main player in manufacturing battery cell components. The IRA includes mining tax break language as a way to combat China.
Compounding this foreign dependence is the fact that the United States’ supply of domestic critical mineral deposits is mostly unmapped. As we’ve noted before, the majority of the mapped critical mineral deposits in the United States are known to be located within 35 miles of Native American reservations, with 97 percent of nickel, 89 percent of copper, 79 percent of lithium, and 68 percent of cobalt reserves and resources in the U.S.
- The U.S. law governing critical minerals harkens back to the California Gold Rush Era
Concerning the United States and the domestic mining of critical minerals, the main policy dictating mining activity is the General Mining Law of 1872. This law was born out of the California Gold Rush and allows mining companies to stake claims on public lands regardless of potential conflicts with other uses. This law lacks environmental protections and reclamation, as hardrock mining has been the country’s top toxic polluter for a significant time. Most importantly to U.S. taxpayers, hardrock mining has zero royalty provisions. “Under the law, mining companies may extract what are known as hardrock minerals — platinum, gold, silver, copper, molybdenum and others – without paying royalties to the U.S. government, unlike oil and gas companies that operate on federal land or in federal waters,” said Benjamin J. Hulac in his Roll Call article about the mining lobby.
The standard royalty, or tax rate, for oil and gas companies extracting on public land was 12.5 percent, which increased for new leases in 2022 to 18.5 percent. In comparison, companies extracting hardrock minerals on public land pay nothing. It is estimated that if hardrock companies paid a similar royalty to their hydrocarbon cousins, it would generate $800 million a year, which will increase exponentially with the expected increase in domestic critical mineral extraction in the decades to come. Oil and gas royalties totaled $2.931 billion in 2019.
- The Inflation Reduction Act spotlights domestic production of green energy minerals
In August, President Joe Biden signed the Inflation Reduction Act (IRA), which provides over $360 billion to address climate change, the largest climate bill in history, while reducing climate pollution by 40 percent below 2005 levels by 2030. The IRA sets forth incentives for the domestic production of critical minerals and “is chock full of mining industry benefits — including a large tax break to any mining company that can produce amounts of minerals central to energy transition products.” It also includes tax credits for EVs; however, there are numerous stipulations for how these credits are applied. For instance, the tax credit is contingent on the EVs being assembled in North America as well as certain amounts of the battery’s components being manufactured in North America. This was part of Biden’s plan to boost jobs and investment in the clean energy supply chain, which has already resulted in companies planning on building or expanding capacity in the United States. Tesla, which is not qualified for these tax credits, is suspending plans for battery cell production in Germany as it looks to try to qualify for EV and battery manufacturing tax breaks in the United States. The IRA also sets percentages of where the minerals are sourced from, needing to be from either domestic sources or free trade agreement countries. These percentages will increase over the next four years, from 40 percent in 2024 to 80 percent in 2026.
In a blog, David E. Bond and Brian Picone write: “Moreover, after a short transition period, the IRA would make vehicles ineligible for the credit if the vehicle battery contains “any” critical minerals or components sourced from countries such as China and Russia.”
The IRA has jump-started the U.S.’drive towards a low-carbon society, one that is desperately needed. But at the crux of this drive are the minerals required to allow that transition to happen. Without proper oversight, updated policies and laws, and a more robust human rights approach to working with local and Indigenous communities, we risk alienating these communities, perpetuating the same cycle of exploitation.