May 26, 20219:07 AM AEST

EnergyExclusive: Biden looks abroad for electric vehicle metals, in blow to U.S. miners

Trevor HunnicuttErnest Scheyder

5 minute read

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U.S. President Joe Biden delivers remarks after touring Ford Rouge Electric Vehicle Center in Dearborn, Michigan, U.S., May 18, 2021. REUTERS/Leah Millis/File Photo

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U.S. President Joe Biden will rely on ally countries to supply the bulk of the metals needed to build electric vehicles and focus on processing them domestically into battery parts, part of a strategy designed to placate environmentalists, two administration officials with direct knowledge told Reuters.

The plans will be a blow to U.S. miners who had hoped Biden would rely primarily on domestically sourced metals, as his campaign had signalled last autumn, to help fulfill his ambitions for a less carbon-intensive economy.

Rather than focus on permitting more U.S. mines, Biden's team is more focused on creating jobs that process minerals domestically into electric vehicle (EV) battery parts, according to the people.

Such a plan would help cut U.S. reliance on industry leader China for EV materials while also enticing unions with manufacturing work and, in theory, reduce pandemic-fueled unemployment.

The U.S. Commerce Department is organizing a June conference to attract more EV manufacturing to the country. Biden's proposed $1.7 trillion infrastructure plan earmarks $174 billion to boost the domestic EV market with tax credits and grants for battery manufacturers, among other incentives. The department declined to comment.

"It's not that hard to dig a hole," said one of the sources. "What's hard is getting that stuff out and getting it to processing facilities. That's what the U.S. government is focused on."

Under the approach, the United States would rely on Canada, Australia and Brazil - among others - to produce most of the critical raw materials needed, while it competes for higher-value jobs turning those minerals into computer chips and batteries, according to the two sources.

Securing the full supply chain from metals to batteries does not require the United States to be the primary producer of the raw materials, said one of the sources.

A full strategy will be finalized after a year-long supply chain review involving national security and economic development officials.

Biden officials want to ensure the administration's EV aspirations are not imperilled as domestic mines face road blocks, the sources said, both from environmentalists and even some Democrats