General Motors Moves To Secure Its Own Critical Mineral Supply Chains

General Motors (GM

GM
) recently announced a strategic partnership  with California-based Controlled Thermal Resources (CRT) to secure “local and low-cost lithium,” for its Ultium battery packs. GM’s Ultium is a modular system wherein cells can be stacked vertically or horizontally, allowing up to 400 miles + range in its vehicles regardless of chassis design.  

The move indicates the increasing importance of critical minerals to auto-makers entering the electric vehicle market, and further highlights the security of supply chains that power the energy transition – EV components especially.  The agreement  with CTR will provide a local and secure supply of lithium for GM to use in the Ultium slated to launch in 22 vehicle models by 2023.

Lithium was listed a critical mineral by the U.S. Department of Interior (USDI) in 2018 along with 34 others deemed important to the economic and national security of the United States. The list includes 17 rare earth elements (REEs) which are used in semiconductor and battery production. The transition to renewable energy will require consistent supplies of these minerals.

However, the United States currently is reliant on foreign nations for its supply. Of the 35 minerals deemed critical by USDI, the U.S. was 100% reliant on foreign sources for 13 in 2019. In 2018 the U.S. sourced over 98% of its processed REEs from China, a trend that has continued into 2021. China’s capacity to produce refined critical minerals and REEs stems from low labor costs and lax environmental regulations, with its central government prioritizing international reliance on its supply.

Recognizing that reliance on Chinese supply could prove to be devastating in the future considering the increasingly troubled relations, the U.S. began to explore diversifying critical mineral supply chains during the Trump administration. Executive orders 13817 & 13953 both identified critical minerals as crucial to the U.S. economy and declared reliance on Chinese supply chains a national emergency.

The Biden administration expanded upon actions taken by President Trump by pledging funding for REE separation facilities and ordering a 100-day supply chain review. The results of the review yielded the creation of a Supply Chains Disruptions Task Force and recommendations for the Department of Defense, Congress, and private companies to develop mineral extraction sites in the continental United States.

In the case of lithium, the strategic mineral is typically extracted from brine pools and evaporation ponds in a costly and often carbon intensive process. CRT utilizes a new and sustainable “closed loop” process which reduces costs and emissions by using in situ geothermal energy. No GHG emissions are associated with powering the extraction process.

The majority of the battery-grade lithium hydroxide and carbonate for GM will come from CTR’s own Hell’s Kitchen Lithium and Power development in the Salton Sea Geothermal Field in Imperial, California. The Salton Sea reserve is home to a store of lithium brine which could potentially supply 40% of global demand.

Despite recent investments — including  the recently announced GM project – the United States is years away from ensuring a steady domestic supply of critical minerals and REEs. Securing domestic production to rival the Chinese will require deregulation, policy and resources commitment, and investment in mineral extraction facilities.

The transition to environmentally friendly sources of energy and transportation will require U.S. policymakers to consider expanding mineral sites in North America and the Western Hemisphere.

Expansive surveilling of potential mineral extraction sites in the U.S., Canada, & Australia is currently taking place through the Critical Minerals Mapping Initiative, where the U.S. Geological Survey, Geological Survey of Canada, and Geoscience Australia are identifying mineral caches to encourage the building of diversified supply chains among traditional allies. Coordination with Canada and Australia has encouraged the development of critical mineral projects which benefit the United States.

The Department of Defense granted $30 million in July 2020 to Australia’s Lynas mining corporation to build a rare earth refinement facility in Texas. Later, additional funding was allocated for the building of light rare earth refinement facility for metals used in consumer goods, such as smartphones and computers. Such projects highlight the importance of building relations with other nations to encourage diversification in the critical mineral supply chain. However, these efforts should not replace the expansion of mineral extraction and processing facilities led strictly by the U.S. private sector.

Despite GM’s project announcement, the Mountain Pass mine in California remains the only operating REE facility of its kind in the United States. Proximity is crucial for building defensible critical mineral supply chains and there are ample opportunities for corporations to facilitate a mining “boom” in the United States. However, environmental regulations have hampered efforts to build mining infrastructure in the U.S. despite generally clean extraction techniques.

The GM project has drawn skepticism from environmentalists who claim the lithium extraction is harmful to the local ecosystem. However, CRT engineers have assured the public that its closed loop extraction process is completely sustainable due to its use of geothermal heat to power extraction. Concerns over the environmental impacts of mining have delayed mine building, such as in Greenland where the environmentalist political party Inuit Ataqatgiit blocked a major critical minerals extraction project.

Environmentally friendly extraction techniques should accompany investment and expansion of critical mineral infrastructure. Energy transition to renewables and electric mobility should not equal de-industrialization.

To counter reliance on foreign-sourced rare earth, the U.S. must ensure a reliable supply chain in the Western Hemisphere, better yet in North America. By diversifying critical mineral supply, the likelihood of major trade conflict with China would decrease, ensuring the long-term health of national security and the economy.

With Assistance from Liam Taylor