Biden’s boneheaded mining policy: A danger to U.S. mineral security
Albemarle Corp. spokesman Marcelo Valdebenito holds a bottle of liquid lithium carbonate at a lithium mine on Aug. 24, 2022, in Salar de Atacama, Chile. Albemarle, based in Charlotte, N.C., is expanding mining operations there to meet the rising global demand for lithium carbonate, a main component in the manufacture of batteries, increasingly for electric vehicles. (John Moore/Getty Images)
It’s time to face reality: Pursuing a policy of boosting U.S. mining — and breaking China’s grip on the production of metals essential for our clean energy transition — should be a no-brainer.
It would insulate our nation from mineral embargoes, strengthen our economy, provide revenue and jobs and bolster the production of renewable energy needed to reduce global warming.
The recent jump in mineral prices — and increasing tension in U.S.-China relations — underscores the need to strengthen our supply lines now. Yet the Biden administration is continuing to adhere to policies that act as a disincentive to U.S. mining and could lead to shortages of vital metals such as lithium and cobalt in the future.
Instead of adopting a sensible mining policy to increase mineral security, the administration has been following an impossible dream of diversifying our supply from abroad. But that alone won’t solve our mineral dilemma.
The reality is that the World Bank and International Energy Agency expect global demand for battery metals to skyrocket within a few years. It’s imperative that we increase domestic mining and decrease our dependence on China. But our dependence on China for battery metals is growing, and we are banking on a nonsensical policy that will make it rise faster than it already is.
Crazy as it may seem, the administration now wants to impose a royalty tax of as much as 8% on the value of what is mined in the United States. If Congress passes the tax, it would lead to even greater dependence on foreign minerals, because it would put a damper on domestic mineral exploration and production.
The administration’s tax plan — which was recently proposed by an interagency group, led by the Interior Department — helps explain our current predicament. It appears to be saying one thing and doing the opposite with regard to U.S. mineral production.
President Biden has said we need to boost U.S. mining for minerals essential for clean energy technologies, but his administration is now calling for a royalty tax plus a fee on the tons of material moved during mining and reclamation — known as a “dirt tax” — that would likely end up discouraging new mine development and forcing some existing mines to close. Nor has the administration done anything to implement changes in the mine permitting process that were included in the climate law that Congress passed some time ago.
The truth is that on any given day, something could go terribly wrong in U.S.-China relations. But the White House has shown no sense of urgency in the need to break China’s hold on global extraction and processing of minerals.
Because of fumbled policies, the U.S. relies on China for half of the battery metals that our government deems critically important. Are we talking danger here, or what?
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