Solar and wind energy are pushing up the need for minerals and metals that make these technologies feasible, as are electric cars. However, the supply chains necessary for these solutions’ rapid and large-scale deployment to combat climate change are falling behind. More than anywhere else, this is true for the United States.
When it comes to a careful energy transition, the United States has a wealth of mineral resources, but its reliance on mineral imports has reached alarming heights, having doubled in the last two decades as the United States’ share of global mining investment has steadily declined. These resources range from lithium and nickel to copper and rare earths.
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Currently, in Congress, this measure would impose harsh additional royalties and taxes on production, weakening the industry’s competitiveness and undermining any efforts to restore production and establish supply networks, as well as the energy transition and American industrial demand in America.
This measure would not only undermine attempts to restore the nation’s industrial base at the front end, but it would also eliminate the chance to restore thousands of family-supporting jobs in areas where investment and job creation are frequently limited. Working in a sector that makes long-term investments pays out handsomely for the ordinary American miner. Instead of cutting down on mining, the U.S. has to ramp it up.
Royalties, taxes, and fees paid by U.S. mining enterprises are already in the 40 to 50 percent range, comparable to those paid by other major mineral-producing nations. It would undermine the viability of current operations and send a clear signal to miners to move abroad if this legislation were to pass, pushing the United States far beyond the top limit of that range.
According to the International Energy Agency, worldwide lithium consumption is expected to rise by 40 times by 2040, with cobalt and nickel demand increasing at least 20 times that amount. The need for copper will more than double, as will the need for rare earth minerals. A U.S. future powered only by electric vehicles may need a worldwide lithium supply of more than double present levels.