Timelines for brand spanking new US mines amongst longest on this planet | Invesloan.com

Good morning and welcome back to Energy Source, coming to you from New York. 

Ohio senator JD Vance took centre stage last night at the Republican National Convention in Wisconsin, where he accepted the nomination as Donald Trump’s presidential running mate. 

The VP pick is a good show of cards of how energy policy might look in another Trump administration. Vance has embraced oil and gas production, dismissed climate change and attacked the Inflation Reduction Act, President Joe Biden’s landmark climate law, which Trump has vowed to terminate if elected president. 

But Vance also exemplifies the irony of Republican attacks on the energy transition. Ohio is among the top two states for solar manufacturing investments and among the top five states for solar capacity additions. Today, First Solar is opening the largest solar research centre in the country in north-west Ohio, where it also operates one of the biggest factories in the western world. 

Today’s newsletter looks at the painstakingly long timelines to develop new mines in the US, which pose a risk to the country’s pace of decarbonisation and energy security.

Thanks for reading,

Amanda

Decades-long timelines for new US mines pose risk to transition

When it comes to building new mines, the US moves like a tortoise. 

Mining companies in the world’s largest economy face some of the longest timelines globally to develop new sources of supply as the US scrambles to secure enough metals for the energy transition.

It takes on average almost three decades for a mine to go from discovery to production in the US, the second-longest in the world behind Zambia, a new analysis from S&P Global which was published this morning found. The global average is about 23 years.

The long timeline comes as US demand for metals such as copper, lithium and nickel is expected to grow exponentially over the next decade to meet the needs of electrification and decarbonisation, with the country racing against China to secure foreign sources of supply. 

“If this endowment can be tapped, if it can be brought online quicker, there’s slightly more of a chance of the energy transition happening at a pace that people hope for,” said Keerti Rajan, one of the authors of the report. “The US could be more independent in its resources in the energy transition.” 

The Inflation Reduction Act turbocharged the pace of the country’s energy transition with lucrative subsidies that restrict companies from sourcing minerals from China in electric vehicles and batteries.

China is the source of the majority of the world’s graphite and rare earths production and dominates the processing of critical minerals, refining more than half of the world’s supplies for lithium and cobalt, according to a Lazard report released last year.

S&P estimates that global demand for copper, dubbed “the metal of electrification”, must almost double over the next decade to be on track for net zero by 2050. In the US, demand for lithium, copper and cobalt is expected to be 23 times higher in 2035 than it was in 2021.

The risk of shortfalls comes as the US possesses enormous reserves of these metals. S&P estimates that the country’s endowment of lithium is about twice that of Australia, the producer of half of the world’s lithium, and that the US has more copper resources than Canada and Australia combined.

“The US isn’t living up to its potential in terms of mineral production,” said Frank Hoffman, another of the report’s authors. The report examined 268 operating and non-operating mines around the world.

The authors point to the litigious culture of the US, along with the complex process for federal lands permitting and lack of a social licence to operate, as reasons why the US lags its western counterparts on mining development.

Uncertainty over timelines has pushed investors to other countries, with spending on exploration in Canada and Australia far exceeding the US.

“To say that the US is underperforming when it comes to domestic mineral production is putting it kindly,” said Rich Nolan, president and chief executive of the National Mining Association, which helped finance the report, in a statement released this morning.

Nolan told Energy Source earlier this year that the long timelines for mining development in the US were “the largest impediment to our ability to succeed”. 

Since 2002, only three new mines have entered production in the US. Numerous projects, including Rio Tinto and BHP’s Resolution Copper project in Arizona and Northern Dynasty Minerals’ Pebble Project in Alaska, have waited for more than 29 years since discovery and have yet to enter production. 

While Democrats and Republicans have called for permitting reform, the parties have struggled to reach a consequential deal. Some environmentalists and indigenous groups have warned that streamlining the approvals process risks harming communities on the frontline of projects.

In 2022, Biden invoked a Cold War-era statute, the Defense Production Act, to boost the domestic production of critical minerals. The US is also betting on supplies from its allies, signing a critical minerals deal with Japan in March 2023 and negotiating similar agreements with trade partners such as the EU to bolster supply.

This year’s minerals report from the US Geological Survey found that the country was 100 per cent import reliant for 12 minerals classified as critical and more than 50 per cent reliant on imports for another 29 of those commodities.

“This is a question of new energy security: will the US solely build gigafactories, or will it also begin to have some semblance of domestic or allied self-sufficiency for mineral production?” said Milo McBride, a fellow at the Carnegie Endowment for International Peace. 

“If not, then the longer-term macro questions are, how will US-China relations play out, and to what extent will critical minerals like graphite or rare earths get caught in the crosshairs?”

Job Moves

• Deborah Kross joins Florida-based developer Origis Energy as senior vice-president of capital markets. She joins from Wells Fargo.

• Fortescue named Apple Paget as its permanent chief financial officer, Shelley Robertson as chief operating officer, and Navdeep Gill as secretary.

• Katie Jackson will lead Rio Tinto’s copper division, succeeding Bold Baatar, who will serve as chief commercial officer. Jackson was a former executive VP at Shell. 

• Air Products appointed Eric Guter as vice-president of investor relations, succeeding Sidd Manjeshwar. Guter currently serves as vice-president of hydrogen for mobility. 

• Thai renewable company Energy Absolute appointed Somchainuk Engtrakul as board chair and acting chief executive and Vasu Klomkliang as acting chief financial officer, replacing Somphote Ahunai and Amorn Sapthaweekul, respectively, who resigned after fraud accusations.

Power Points

Energy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu, Tom Wilson and Malcolm Moore, with support from the FT’s global team of reporters. Reach us at [email protected] and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.