According to media reports, the Biden administration is exploring the possibility of implementing a federal price support mechanism for U.S. critical mineral projects to counter the impact of imports on the domestic market. Energy officials have revealed that the plan would establish a price floor for critical minerals produced in the U.S.
In other words, if market prices fall below the set floor price, the government would compensate mining companies for the difference.
Despite the Biden administration’s promise of $1 billion in subsidies, U.S. critical mineral projects still face ongoing challenges, with many projects being delayed or even canceled. This policy reflects Biden’s efforts to strengthen the domestic supply chain for critical minerals, ensuring the supply of minerals essential for clean energy technologies, such as lithium, nickel, and cobalt.
In 2022, the U.S. Geological Survey (USGS) released a new list of 50 critical minerals. These minerals are vital to the U.S. economy or national security, but their supply chains are highly vulnerable.
In December 2023, Michael Rowley, President and CEO of mineral exploration company Stillwater Critical Minerals Corp. (TSX.V: PGE, OTCQB: PGEZF), stated in an interview with METALS 100 that the company’s vision is to develop world-scale low-carbon critical minerals in North America, with a focus on their flagship project, the Stillwater West Ni-PGE-Cu-Co + Au project located in Montana, USA. With the involvement of geologists from Bushveld and Platreef and strategic investment from Glencore, the company plans to advance to the next phase of large-scale critical mineral supply. Additionally, Stillwater has projects in Canada.
Due to a significant decline in global critical mineral prices, U.S. projects find it difficult to compete, and many U.S. mineral processing companies still struggle to secure necessary financing. However, the Energy Department official explained that the Biden administration’s goal is to provide temporary financial support to help U.S. producers cope with the current market conditions, rather than offering long-term subsidies.
Previously, the United States had reached a series of agreements with many mineral-rich countries to “de-risk” the critical mineral supply chain. These agreements involve critical minerals such as lithium, nickel, cobalt, manganese, and graphite used for manufacturing electric vehicle batteries, rare earth elements for permanent magnets in wind turbines and electric vehicle motors, and copper and aluminum needed for power grids.
Meanwhile, the U.S. is also actively boosting domestic production capabilities, focusing on mining and building processing facilities.
