American Jobs to Build Electric Vehicles Excludes Miners

Mining jobs needed to produce the metals for processing into battery parts used to build electric vehicles in America will not be developed in the U.S. but in Australia, Brazil and Canada, mainly to avoid battles with environmentalists.

June 2, 2021, 11:00 AM PDT

By Irvin Dawid

Electric Cars

Sopotnicki / Shutterstock

President Biden's American Jobs Plan includes a $174 billion investment to make electric vehicles domestically and expand EV market share, "only one-third the size of the Chinese EV market," according to the White House fact sheet for the plan dated March 31. In the section headed, "Create good jobs electrifying vehicles," it adds:

His plan will enable automakers to spur domestic supply chains from raw materials to parts, retool factories to compete globally, and support American workers to make batteries and EVs.

The section is impressive, calling for the replacement of diesel-powered transit and school buses with zero-emission electric buses, and electrifying "the federal fleet, including the United States Postal Service."

However, Trevor Hunnicutt and Ernest Scheyder report for Reuters on May 25 (source article) that for politically expedient reasons, the part of the plan that deals with spurring the domestic supply of raw materials has essentially been dropped.

Rather than focus on permitting more U.S. mines, Biden's team is more focused on creating jobs that process minerals domestically into electric vehicle (EV) battery parts, according to [two administration officials].

The plans will be a blow to U.S. miners who had hoped Biden would rely primarily on domestically sourced metals, as his campaign had signalled last autumn, to help fulfill his ambitions for a less carbon-intensive economy.

Under the approach, the United States would rely on Canada, Australia and Brazil - among others - to produce most of the critical raw materials needed, while it competes for higher-value jobs turning those minerals into computer chips and batteries, according to the two sources.

Hunnicutt and Scheyder write that the main reason that the Biden administration changed its sourcing plans for the raw materials needed to process electric vehicle batteries was "to ensure the administration's EV aspirations are not imperilled as domestic mines face road blocks, the sources said, both from environmentalists and even some Democrats."

The reporters add that "the U.S. Department of Energy has awarded grants to help old coal mines find ways to produce rare earths. U.S. officials have also funded MP Materials Corp (MP.N), which owns the country's only rare earths mine, though it relies on Chinese processors."

But the bulk of Biden's approach is designed to sidestep battles with environmentalists and save capital for other fights, according to one administration source.

Reuters notes that the impact will be felt mostly by "smaller, U.S.-focused companies."

"We can no longer push the production of the products we want to places we cannot see and to people we will never meet," said Mckinsey Lyon of Perpetua Resources Corp (PPTA.TO), which is trying to develop Idaho's Stibnite mine to produce gold and antimony used to make EV battery alloys.

Partisan divide on mining

Reuters captured the opposing partisan viewpoints on mining expressed by Reps. Betty McCollum (DFL-Minn.) and Lauren Boebert (R-Colo.)

"It rings hollow when I hear everyone use this as a national defense argument, that we have to build new mines to have a greener economy," said McCollum, who has introduced legislation that would permanently block Antofagasta Plc's (ANTO.L) proposed Twin Metals copper mine in Minnesota.

"These 'not-in-my-backyard' extremists have made clear they want to lock up our land and prevent the mining of minerals,"  told a House Natural Resources Committee forum held the same day as Biden's Michigan visit [where he drove Ford's electric F-150 pickup truck].

Fox News anchor Dana Perino discussed the Reuters' report with guest Scott Lincicome, a senior fellow in economic studies with the Cato Institute, during America's Newsroom on May 26 and referenced the partisan controversy in a question as to why environmentalists would oppose domestic mining for metals needed for EV batteries.

"If the environmentalists are going to complain about it...They don't care that the resources would be stripped from other countries, just here in our country where we, I think, probably do it cleaner and better, and that provide jobs here? I can see why the miners are irked."

Lincicome responded that what was at stake was "the regulatory apparatus allowing people to gum up mining permitting operations, to sue to block these operations and thus giving [domestic] miners a disadvantage in the global market."

Contributor's comment: In reviewing past posts related to the electric vehicle investment component of the American Jobs Plan, it's interesting to see that the Obama administration also invested in promoting the domestic production of electric vehicles, sometimes with negative results, as the post from 2012 listed below reminds us.

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