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Updated critical minerals list a boon for Australian miners

Matthew CranstonOct 10, 2021 – 1.14pm
Washington| Australian miners stand to benefit from the addition of nickel to a critical minerals list designed to help the US fix supply gaps shortages in batteries and other energy technologies.

Australia produces 24 per cent of the world’s nickel, according to government data, and the metal’s inclusion on the list could spur development of new mines and expansion of existing sites both in the US and Australia. The metal is used to strengthen alloys found in batteries, electronics, military hardware and a range of energy technologies.


BHP nickel sulphate processing in Western Australia. Trevor Collins

Nickel processing is dominated by China.

Recommendations from the United States Geological Survey (USGS), which guide the final list likely to be released by the Department of Interior later this month, show nickel and graphite should be added to the list of minerals deemed critical for the economic and national security of the US.

The list is also crucial for miners seeking a share of the $US3 billion ($4.1 billion) in government subsidies that could soon be on offer to companies developing parts of the critical mineral supply chain. This will depend on whether Congress passes required bills in coming weeks.

While BHP is Australia’s largest nickel producer, it does not have any production in the US. In the US, Australia’s Rio Tinto and its Talon Metals (TLO) joint venture partner are among those who stand to gain through their Tamarack Nickel-Copper-Cobalt Project – one of very few nickel mines in the country.

For now, Lundin’s Eagle Mine subsidiary in Michigan runs the only operational nickel mine in the US, eventually accounting for 1.5 per cent of the world’s nickel. All of its output is shipped to China for processing.

The AUKUS military intelligence-sharing partnership is also tied to rapidly evolving battery-dependent technologies that rely on nickel and lithium, but whose production is dominated by China.

The Biden administration has already given preference for critical minerals supplies to trusted allies with high environmental and labour standards, such as Australia.

The USGS said in its report that greater reliance on foreign supplies and limited end-of-life recycling, had “elevated the risk of a supply disruption” of critical minerals essential for both established and emerging technologies, and that recent events, including “trade disputes, resource nationalism, and the global coronavirus further highlight the risk of disruptions to the US economy and national security”.

The USGS identified supply chains where there was risk of a single point of failure (SPOF), naming nickel and graphite as minerals where this could be the case. Nickel is a key component in lithium-ion batteries, used in electric vehicles and military technology.

“Demand for nickel for use in lithium-ion batteries is currently only a small percentage of its total demand, but that demand is expected to grow markedly,” the USGS report authors Nedal Nassar and Steven Fortier wrote.

Australia’s ambassador to the United States Arthur Sinodinos said: “The addition of nickel and graphite to the USG critical minerals list reinforces the significance of resilient and responsible US battery and [electric vehicle] supply chains.”

“Australia’s highly developed mining and metals industry produced 24 per cent of the world’s nickel in 2020, while the US produced less than 1 per cent. Australia is also emerging as a leader in battery-grade graphite production,” he said.

“As a partner and ally to the United States, Australia recognises the urgency of building a resilient US EV and energy industry through secure mineral supply chains. We are highly supportive of trade and investment of our abundant battery and critical minerals products with the US.”

Leaders of the so-called Quad group of countries last month formally agreed to map out supply chains for critical minerals, as well as draw up regulations to speed up the approval and development of projects and of supply agreements.

Talon Metals spokesman Todd Malan said the addition of nickel to the list would help the companies prioritise mining developments.

“Adding nickel to the US critical mineral list would be a smart move. The Biden Administration has made EV vehicle adoption a top priority while also making sure that the battery manufacturing supply chain is fully integrated in the US - from mining to recycling,” he said.

“The US is nickel-rich; it just needs to prioritise mine development and invest in a new approach to processing to provide the type of nickel required in EV batteries.”

US Battery Materials and Technology Coalition spokesperson Ben Steinberg said the addition of nickel and other minerals reflected Washington’s awareness of future threats to supply chains.

“The inclusion of nickel, zinc, and synthetic graphite on the US critical minerals list is the ultimate signal showcasing the US government’s focus on the need for battery materials in the US,” he said.

“In an electrified economy, battery development will serve as the engine of success and growth in the transportation, electricity, manufacturing, consumer electronics, defence industrial base, and other sectors. Developing the minerals domestically that unpin batteries is a national and economic security imperative for the country.

“US government and industry engagement with allied and partnered nations, like Canada and Australia, are critical to the development of a US battery industry.”

Uranium was left off the list because it is regarded as a fuel, the reliability and availability of which are addressed in a separate section of the US Energy Act.

The US National Mining Association’s Ashley Burke said uranium should be added.

“While it may be classified as a fuel mineral, it’s hard to imagine any mineral more important to our national, economic and energy security than uranium,” Mr Burke said.

“Regardless of its inclusion on this list, there’s no question we need to encourage greater domestic production and ensure we hold on to the knowledge base and capability to produce uranium domestically and not further cede the uranium market to geopolitical rivals.”

“The critical minerals list has certainly added visibility to the nation’s alarming mineral import reliance, the need to address duplicative mine permitting processes and to enhance mapping of and access to domestic resources,” he said.

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