Climate Change, China, and Critical Minerals

There is no getting around the reality of the greenhouse gas effect. Carbon dioxide and methane trap heat; acting like a blanket, they make the earth warmer. It is no wonder, therefore, that temperatures have risen since the Industrial Revolution.

Before getting to the challenges posed by climate change, I want to make clear that I’m a fan of cheap and abundant energy. Think about this way: would you rather be born ten thousand of years ago in a cave? Yes, the air would have less pollution, but your life expectancy would have been around 30 years. Would you rather live in a world without air conditioning in the summer and heat in the winter? Would you prefer scrounging for your daily meal or do you prefer accessing inexpensive food from all around the world, whether it be pineapples, mangos, avocados, bananas, or coconuts? Would you prefer living in a world without cars, trains, and air planes?

As much as I love the creature comforts that come from cheap and abundant energy, it is a fact that the pace of warming has increased in the past 40 years and that 20 of the warmest years on record have taken place since 1989. The most recent report by United Nations Intergovernmental Panel on Climate Change scares me with its predictions. As such, I’m persuaded by my friend, Dan Cantor, a veteran player in the renewable energy business, that we need to build a fully renewable grid which uses battery technology to store energy. Such a grid would provide clean energy on those cloudy and windless days and during times of peak demand.

While Dan has convinced me on this subject, I’m interested in how the transition to clean energy will require greater production of nickel, graphite, cobalt, lithium, and polysilicon. In The Role of Critical Minerals in Clean Energy Transitions, the International Energy Agency (IEA) documents how humans will need a huge increase in the production of these minerals. There is also the need for increased amounts of aluminum and copper, as each electric vehicle contains about 400 pounds more of the former aluminum and about 150 pounds more of the latter than a conventional car. It isn’t just clean energy technologies that require rare earth minerals. We need these minerals to produce fighter jets and navy vessels, appliances and computers.

Currently, China is the leading processor of copper, lithium, nickel, cobalt, and graphite. In terms of polysilicon, which is critical for the production of solar panels, China could produce more than 95 percent of the world’s polysilicon in the near future, according to a new report from the IEA. Further 50 to 60 percent of the world’s global refining capacity for cobalt is located in China. China also dominates the supply chain for electric-vehicle batteries, controlling 80 percent of the world’s raw-material refining, 77 percent of battery-cell capacity and 60 percent of component manufacturing. Finally, lithium-ion batteries depend on access to graphite, and China was the world’s largest graphite producer in 2017.

By comparison, America’s only primary nickel mine, located in Michigan, is expected to close in 2025. Further, the Silver Peak Mine in Nevada is the only operating lithium mine in the United States, despite rich lithium deposits existing in California, Arkansas, North Carolina, and Maine. As Gavin D. J. Harper writes in the American Affairs Journal, “This dependency of the United States on foreign sources creates a strategic vulnerability for both its economy and military.”

It isn’t just the strategic vulnerability, it’s that China is committing “crimes against humanity.” After the holocaust, we said, “Never again!” Yet here we are, once again ignoring major human rights violations.

Xinjiang is an autonomous region in the northwest of China, with a Muslim ethnic minority population of more than 12 million. The U.S. government and others say is the scene of genocide against local ethnic minorities including the mostly Muslim Uyghur inhabitants. Muslims in Xinjiang have been imprisoned in conception camps, and there are also forced sterilization campaigns.

According to William Reinsch of the Center for Strategic and International Studies, nearly every silicon-based solar module is likely to have some Xinjiang silicon in it. China has been able to drive down the cost of solar panels because they use of coal-fired electrical plants in western China to produce the metallurgical-grade silicon and they use slave labor. In short, I fear a world of increase climate change, but I also fear a world where the Chinese Communist Party dictatorship dominates. It isn’t just the geopolitical challenges and human rights challenges. As Allysia Finley observes in the Wall Street Journal, “China doesn’t share our stringent environmental standards.”

Consumers are attracted to electric vehicles for their clean reputation, and it is true that electric vehicles, over their whole life cycle, are cleaner than gas powered cars. But electric cars are more energy intensive in manufacture, and they rely on the use of critical materials and technology metals which are challenging to pro­cure.

So what can we do about all this??

First, we need to increase domestic production of raw minerals. As David Banks summarizes, “There is no building an American EV industry and secure battery supply chain without ramping up domestic production of lithium and other essential battery metals like nickel, cobalt and graphite.” In launching “A Federal Strategy to Ensure a Reliable Supply of Critical Minerals” in 2019, the Trump administration made the correct call to direct the U.S. Department of the Interior (DOI) to search for domestic sources of critical minerals, collect information enabling their extraction, and expedite permitting to allow projects to go ahead. Also, while I’ve never been a big fan of industrial policy where government picks and supports private companies, I agree with the recently passed CHIPS and Science Act, as it would provide over 50 billion dollars to the U.S. semiconductor industry. I also think it was a good idea that President Joe Biden invoked the Defense Production Act to spur the domestic production of solar panels and other energy-related equipment. And we should not let “not-in-my-backyard-ism” get in the way of domestic mineral production.

Second, in order to reduce the negative impacts associated with mining, we need to improve recycling processes. Thankfully, researchers at Princeton University have developed an inexpensive way to recycle lithium batteries and have spun off the startup Princeton NuEnergy to commercialize and scale the operation. Other Li-ion battery recycling advancements include ACE Green Recycling’s recent announcement that it will build and operate an emissions-free lead-acid and Li-ion battery recycling park in Texas. Li-Cycle announced that it would process materials at its lithium-ion battery recycling plant in New York to recover nickel and cobalt materials for use in new batteries. 

Third, we need to embrace nuclear energy. As former Indiana governor and current Purdue University president, Mitch Daniels, writes in a recent op-ed piece for the Washington Post, “Eliminating fossil fuels without deploying more nuclear energy would entail huge new mines to extract minerals like copper, aluminum and lithium, vast land areas to host the wind and solar capacity of which some advocates dream, toxic disposal challenges of batteries and worn-out windmills and solar panels on a scale that makes handling nuclear waste seem trivial.”

In sum, building a clean economy means more raw minerals and improved recycling processes. It’s better if we mine closer to home than in places like China, Russia, and the Democratic Republic of Congo. Also, the more we invest in resources at home, the less we prop up a dangerous and ruthless dictatorship.