Sunday, May 29, 2022

Biden could invoke Defense Production Act for critical minerals as soon as this week

Doing so would add critical minerals such as lithium, nickel, graphite, cobalt and manganese to the list of items covered by the 1950 Defense Production Act, a law enacted amid the Korean War that allows the president to use emergency authority to make large orders of a certain type of product or expand productive capacity and supply.

The White House will work closely with the departments of Energy and the Interior to implement the presidential determination under the Defense Production Act, the source said, adding that a presidential determination signed by Biden would “in no way” bypass or supersede permitting or environmental review processes for mining these minerals.

Biden announces new investments in mineral production to address supply chain shortages

The source also said that the actions being considered aren’t loans or direct purchases for critical minerals; Instead, they would fund feasibility studies, co-product and by-product production at current operations, as well as productivity and safety modernizations.

Both Biden and his predecessor Donald Trump invoked the Defense Production Act during the Covid-19 crisis. A decision by Biden to use this authority for the domestic production of critical minerals would come as Russia’s war on Ukraine and the resulting energy shocks have impacted supply chains for nickel — and caused nickel prices to spike.
The Intercept first reported the Biden administration was considering using the act to increase production of critical minerals. Bloomberg first reported the action could come as soon as this week.
Earlier this month, Democratic Sen. Joe Manchin of West Virginia and Republican Sens. Lisa Murkowski of Alaska, Jim Risch of Idaho and Bill Cassidy of Louisiana wrote a letter to Biden, asking him to invoke the Defense Production Act to domestically produce and process critical minerals such as lithium and graphite.

“China not only leads the world in manufacture of lithium-ion batteries, but also in the processing of the minerals and raw materials required in lithium-ion battery manufacturing,” the senators said. “Our dependence on foreign-sourced cobalt and lithium is elevated as the processing of both is dominated by China.”

Manchin also recently talked about his concerns about relying on foreign supply chains dominated by China to make batteries for electric vehicles. The West Virginia senator is Democrats’ key vote for a climate and economic package, and has recently started talks with the White House on a new package, he told CNN.

This story has been updated to note that the Intercept first reported the Biden administration was considering using the Defense Production Act for this purpose.

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