Canadian-US Critical Minerals Supply Chain Needed, Senators Say
At a hearing on Canada's role in helping the U.S. meet its climate goals, both Canadian politicians and senators talked about how they need to continue developing a partnership in critical minerals. Senate Energy and Natural Resources Committee Chairman Joe Manchin, D-W.Va., said it makes no sense "for us to so heavily invest in electric vehicles as a climate solution when that means increasing our reliance on China, because right now we’re not simultaneously increasing our mining, processing, and recycling capacity at the same rate in the United States.
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"The Canadians are ahead of us on critical minerals refining and processing, and we have much to learn from them about how they’re able to responsibly permit these activities in timelines that blow ours out of the water." He said that Canada and the U.S. could build a North American critical minerals supply chain, and emphasized that there should be domestic mining, not just importing from Canada.
At this point, China does 80% of battery material processing, 80% of anode production, 75% of lithium ion battery cell production and 60% of cathode production, he said.
Sen. John Barasso, R-Wyo., agreed, saying there is no way to meet the global demand for minerals for electric vehicle batteries without opening new mines in the U.S.
Witness Nathalie Camden, associate deputy minister for mines in Quebec, noted that Quebec produces 60% of aluminum consumed in North America. She also said that it's one of the rare jurisdictions that has lithium, nickel, cobalt, graphite and manganese deposits, all needed to make batteries. It also produces niobium, the only place in the Northern Hemisphere that does so.
"Cooperation must begin now. With non-market actors operating in this space, the only way we can be globally competitive is if we take advantage of our existing infrastructure and supply chains to maximize efficiency. When Canada and the U.S. secure offtake agreements and share resources, our dependency on non-allied nations and overall reliance on importing these materials changes for the better.
"Quebec is also a gateway to secure mineral imports from other trading allies, like Japan, South Korea, and the European Union, with which Canada has free trade agreements," she testified.
She noted that General Motors, in partnership with a South Korean and German firm, plans to open a cathode active material plant in Quebec, which is expected to open in 2025. She said the cheap and abundant hydropower in Quebec will make large-scale electric vehicle manufacturing in North America more competitive.
She also reminded the committee that the administration invoked the Defense Production Act about six weeks ago in order to more quickly build an electric vehicle supply chain. She said her office is already having discussions with the U.S. departments of Energy, the Interior and Commerce and the Pentagon on mining, thinking about co-investing, for instance.
Canada's Minister of Natural Resources, John Wilkinson, told the committee that Canada and the U.S. should make sure that trade irritants between them don't prevent coordination on critical minerals, developing modular nuclear power plants and getting to net zero electricity. He gave the examples of the solar safeguard tariffs on solar panels manufactured in Canada, and the proposed electric vehicle purchase tax credit, which is not in any active bill. The plank of the Build Back Better proposal would have offered the credit only to vehicles built in the U.S. after a phase-in period, and would have been more generous for U.S.-assembled vehicles from the start. He said such a policy would have "huge implications for the Canadian auto manufacturing sector."