Welcome to the latest issue of the Technology Metals Report (TMR), brought to you by the Critical Minerals Institute (CMI). In this edition, we compile the most impactful stories shared by our members over the past week, reflecting the dynamic and evolving nature of the critical minerals and technology metals industry. Among the key stories featured in this report are President Joe Biden’s initiatives to restrict Chinese electric vehicles (EVs) citing national security concerns, the American Council for an Energy Efficient Economy’s report naming the Toyota Prius Prime SE as the greenest car in America, and insights into the lithium market with investors remaining keen despite a price plunge. We also delve into the broader context of these developments, including the potential solution to the rare earth crisis through tetrataenite, BYD’s exploration for a factory location in Mexico, and the ongoing challenges and opportunities facing the global electric vehicle and critical minerals markets.

This week’s report also highlights various strategic collaborations and developments, including the significant challenge posed by China’s EV industry to Detroit’s Big Three automakers and Australia’s navigation of a critical minerals market meltdown amidst declining prices for key exports such as iron ore, nickel, and lithium. Furthermore, we cover Lynas Rare Earths Ltd.’s (ASX: LYC) call for government vigilance in the volatile nickel market, China’s lithium-ion battery industry facing excess inventory and production capacity issues, Energy Fuels Inc.’s (NYSE American: UUUU | TSX: EFR) record net income and uranium production ramp-up, and Mercedes-Benz’s adjustment of its electrification goal. These stories underscore the rapidly changing landscape of the technology metals and critical minerals industry, spotlighting strategic collaborations, market dynamics, and the critical role of innovation and policy in shaping the future of sustainable technology and energy.

Biden Calls Chinese Electric Vehicles a Security Threat (February 29, 2024, Source) — President Joe Biden has initiated measures to potentially restrict the entry of internet-connected Chinese electric vehicles (EVs) into the U.S. market, citing national security concerns over their ability to transmit sensitive data to Beijing. The Commerce Department has launched an investigation into these security threats, marking the beginning of a broader strategy to prevent low-cost Chinese EVs from undermining U.S. automakers. This move comes amid growing tensions between the U.S. and China over trade and technology, with Biden emphasizing the need to protect the domestic auto industry from unfair Chinese practices. The investigation, a result of discussions with major automakers and unions, could lead to new regulations on vehicles using Chinese software, which is feared to collect extensive data on American users. This action is part of Biden’s wider efforts to bolster U.S. technology restrictions against China and maintain competitiveness in the global auto market.

The ‘greenest’ car in America might surprise you (February 29, 2024, Source) — A new report from the American Council for an Energy Efficient Economy challenges the common perception that electric vehicles (EVs) are the greenest cars in America by naming the Toyota Prius Prime SE, a plug-in hybrid, as the top environmentally friendly vehicle. The Prius Prime SE can travel 44 miles on electricity before switching to hybrid mode, combining electric and gasoline power. The report assesses over 1,200 vehicles on their road and manufacturing emissions, including pollutants beyond carbon dioxide. Despite the growing market for EVs, the report emphasizes that a car’s green credentials depend on factors like weight, battery size, and overall efficiency, not just its electric capabilities. Plug-in hybrids like the Prius Prime offer a balance for drivers by allowing short electric commutes and longer gas-powered trips, presenting a practical alternative amidst America’s evolving charging infrastructure. Critics argue that fully electric vehicles remain the best option for environmental benefits, especially as renewable energy sources increase. However, the report suggests the importance of offering consumers a range of environmentally friendly choices to suit different needs.

Lithium Investors Are Looking Beyond Price Plunge, Chile Minister Says (February 28, 2024, Source) — Despite a recent downturn in lithium prices, investors remain keen on new lithium projects in Chile, as confirmed by the country’s Mining Minister, Aurora Williams. This interest is fueled by the long-term prospects associated with the global shift towards renewable energy and electric vehicles, rather than short-term price fluctuations. Chile, home to the world’s largest lithium reserves, has seen prices drop significantly since the introduction of a new public-private partnership model aimed at attracting investment while ensuring major deposits remain under state control. Despite this, major international companies like Rio Tinto Group and Tsingshan Holding Group have continued discussions with Chilean authorities, demonstrating a sustained interest in the sector. Chile plans to offer exploration rights in certain salt flats, with the possibility of private investors gaining either minority or majority stakes depending on the strategic importance of the area. This initiative is part of a broader effort to maintain Chile’s status as a key player in the global lithium market, amidst growing competition and as the country also seeks to bolster its position in the copper industry.

Navigating the Climate Change Storm of ESG Withdrawal and Climate Change Commitment (February 28, 2024, Source) — Recent decisions by JPMorgan, State Street, and Pimco to exit Climate Action 100+ (CA+), amid political pressures, have sparked debate over the fate of global ESG initiatives. Nevertheless, CA+’s extensive network, including over 700 members and its collaborations with high-emission companies for a low-carbon transition, exemplifies the resilience of ESG efforts. Despite these withdrawals, the broader commitment to ESG principles, especially in the extractive industries with initiatives like Copper Mark and Responsible Steel, remains robust. This commitment is further reinforced by regulatory measures against greenwashing and heightened public activism for environmental protection and equitable benefits. These trends underscore that, far from diminishing, ESG remains a crucial driver of corporate strategy and societal expectations, suggesting a sustained impact on global business practices.

Tetrataenite as a solution to the rare earth crisis (February 28, 2024, Source) — The rare earth crisis, pivotal for modern technologies such as electric motors and wind turbines, stems from the scarcity and environmental impact of mining rare earth elements like yttrium and neodymium. As demand for these materials grows due to their importance in reducing fossil fuel reliance and combating climate change, shortages are anticipated. A potential breakthrough in 2023 by an international research team suggests tetrataenite, a meteorite mineral with similar magnetic properties to rare earths, as a solution. Unlike its natural slow formation in space, the team discovered a method to synthesize tetrataenite on Earth rapidly using common materials like iron, nickel, and phosphorous, potentially offering an alternative to address the rare earth crisis.

Chinese automaker BYD looking for Mexico plant location, executive says (February 28, 2024, Source) — Chinese electric vehicle manufacturer BYD is scouting locations in Mexico for a new factory, targeting the local market to enhance its share, as stated by BYD Americas CEO Stella Li. With an annual production capacity of 150,000 cars, the company plans to finalize the plant location by year-end. Recently surpassing Tesla in global EV sales, BYD’s expansion into Mexico signals a potential competitive challenge to U.S. auto companies, amidst concerns from the Alliance for American Manufacturing about low-cost Chinese cars impacting the U.S. auto sector’s viability. BYD’s strategy focuses on serving the Mexican market, particularly eyeing central and southern regions for factory sites. The company’s cost competitiveness is attributed to early investments in EV technology and extensive vertical integration. BYD also announced the launch of its Dolphin Mini EV in Mexico, priced significantly lower than the cheapest Tesla, aiming to make electric cars accessible to more Mexican consumers. However, challenges remain, such as the limited network of charging stations in Mexico.

China’s Electric Vehicles Are Going to Hit Detroit Like a Wrecking Ball (February 27, 2024, Source) — China’s electric vehicle (EV) industry, led by automakers like BYD, poses a significant challenge to Detroit’s Big Three (Ford, General Motors, and Stellantis). Despite recent profits and optimistic forecasts for 2024, these American giants are struggling with their EV sales goals amidst the rapid emergence of affordable and efficient Chinese EVs. BYD, in particular, has sold millions of electrified vehicles, expanding its global manufacturing footprint to meet increasing demand. The competitive pricing and technological efficiency of Chinese EVs underscore China’s evolving industrial capabilities, transitioning from basic manufacturing to complex, high-tech production including cars and batteries. This shift represents a broader challenge to American automakers, who must navigate a changing market landscape while addressing structural vulnerabilities in their business models, heavily reliant on sales of trucks and SUVs to a niche market. The U.S. government faces a delicate balance of supporting domestic industries through subsidies and trade restrictions while fostering a competitive environment that encourages innovation and adaptation to the global shift towards electrification.

Australia’s Precarious Position: Navigating a Critical Minerals Market Meltdown (February 26, 2024, Source) — Australia is at a critical juncture, facing a significant downturn in the prices of key exports such as iron ore, nickel, and lithium, which underscores the country’s vulnerability due to its heavy reliance on these commodities and its dependence on China, its main buyer. The global implications of this market meltdown are profound, with the economic viability of mining and refining operations being challenged, as demonstrated by Lynas Rare Earths Ltd.’s (ASX: LYC) struggles at its Kalgoorlie ore processing plant. The decline in the nickel industry has uncovered manipulations of market prices, reflecting China’s strategic dominance over the global supply chain for rare earth elements and other critical minerals. In response, Australia is attempting to reduce dependence on Chinese processing by offering subsidies to local mining and processing operations, while also dealing with the economic repercussions of collapsing metal prices. This situation necessitates a strategic reevaluation of Australia’s role in the global minerals market, exploring options like underwriting national processing facilities to enhance the value of its mineral exports and diversify its economic base amidst changing global trade dynamics.

Rare earths leader Lynas warns govt on nickel fallout (February 26, 2024, Source) — Lynas Rare Earths Ltd. (ASX: LYC), a leading rare earths producer, has highlighted the importance of government vigilance in response to the nickel market’s volatility and its broader impact on the mining sector. The company reported a 74% decrease in net profit to $39.5 million for the half-year ending December 31, attributing this decline to subdued prices for critical minerals, largely due to China’s dominance in supply. Despite the market challenges, Lynas, the largest producer of rare earths outside China, emphasizes its strategy of being a low-cost producer to sustain profitability even in a weak market. Lynas is expanding its operations, including projects in the United States, and making contingency plans for potential disruptions in supply chains, such as sourcing sulphuric acid due to the possible closure of BHP’s nickel refinery. The company’s experience underscores the interconnected nature of the minerals industry and the need for strategic planning and government engagement to ensure resilience and competitiveness, especially in securing sovereign supplies of critical minerals.

China’s lithium-ion battery industry faces excess inventory, production capacity as EV market downshifts: industry analysts (February 25, 2024, Source) — China’s lithium-ion battery industry, pivotal in the global EV market, is navigating through a phase of excess inventory and production capacity due to decreased demand for electric vehicles. Analysts predict a challenging year ahead, with companies facing losses amidst a price war triggered by overcapacity. The situation has led to significant price drops in lithium carbonate and battery cells, exacerbated by reduced subsidies for EVs. With production far exceeding installation into products, further price declines are expected. The market is undergoing a clearing phase, with expectations of breaking even next year. Investment in new capacity is likely to decelerate. Despite a forecasted slowdown in domestic EV sales growth, the global lithium market faces a ballooning excess supply, raising concerns over the long-term growth prospects for lithium. Top battery and lithium mining firms may only see profitability by 2025, as the industry grapples with these challenges.

Energy Fuels Announces 2023 Results: Record Net Income and Earnings per Share, Uranium Production Ramp-Up, and Near-Term Production of Separated Rare Earth Elements (February 23, 2024, Source) — In 2023, Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) announced significant achievements including a record annual net income of nearly $100 million and the commencement of uranium production across three mines, aiming for a production rate of 1.1 to 1.4 million pounds per year by mid-to-late 2024. The company highlighted a strong balance sheet with over $220 million in liquidity and no debt. Revenue was primarily driven by uranium sales, with significant contributions from rare earth elements (REE) and vanadium. The sale of the Alta Mesa project funded investments in uranium and REE production. Energy Fuels is preparing for the near-term production of separated REEs, anticipating to become a leading producer outside of China. With a focus on growth, the company is also exploring expansions into additional uranium and REE sources, aiming to significantly increase production capabilities while capitalizing on market opportunities in both sectors.

Mercedes-Benz delays electrification goal, beefs up combustion engine line-up (February 22, 2024, Source) — Mercedes-Benz announced a postponement of its electrification target by five years, aiming for electrified vehicles to comprise up to 50% of its sales by 2030, a shift from the initial 2025 goal focused mainly on all-electric cars. This adjustment reflects a broader trend among automakers recognizing the slower-than-anticipated adoption of electric vehicles (EVs), as investments in EV technology and capacity have surpassed current demand. CEO Ola Kaellenius highlighted that even in Europe, a complete switch to electric vehicles by 2030 is unlikely, noting that EVs currently represent a small fraction of total sales. Mercedes-Benz reassured investors and customers of its commitment to refining its combustion engine vehicles alongside its EV ambitions, with plans for a significant lineup refresh by 2027. The announcement, coupled with a €3 billion share buyback program, positively impacted the company’s stock, which saw a 5.9% increase. However, challenges such as economic slowdowns, supply chain issues, and geopolitical tensions have led the automaker to anticipate lower sales and reduced profitability for 2024.

Investor.News Critical Minerals Media Coverage:

• February 28, 2024 – Navigating the Climate Change Storm of ESG Withdrawal and Climate Change Commitment https://bit.ly/3SXymnP
• February 26, 2024 – Australia’s Precarious Position: Navigating a Critical Minerals Market Meltdown https://bit.ly/3uWQoOZ

Investor.News Critical Minerals Videos:

• February 29, 2024 – PDAC President Raymond Goldie Bolsters Toronto’s Status as Global Mining Investment Capital in Lead-Up to PDAC 2024 https://bit.ly/42VBDss

Critical Minerals IN8.Pro Member News Releases:

• March 1, 2024 – Voyageur Pharmaceuticals Ltd. Announces Closing of Private Placement https://bit.ly/432eRzi
• February 29, 2024 – Ucore Rare Metals to Present at the 2024 PDAC Conference https://bit.ly/3TglcUa
• February 28, 2024 – First Phosphate and Craler Sign MOU for the Development of Global Logistical Competencies to and from the Saguenay-Lac-St-Jean region of Quebec, Canada https://bit.ly/49xD5DI
• February 27, 2024 – American Rare Earths to present at two leading industry conferences in March PDAC and International Battery Seminar https://bit.ly/49uaFuu
• February 27, 2024 – Nano One Commences Feasibility Study for First Commercial LFP Plant and “Design-Once-Build-Many” Growth Strategy https://bit.ly/3TaFtum
• February 27, 2024 – Media Advisory – Neo Performance Materials Inc. Fourth Quarter 2023 Earnings Release & Conference Call https://bit.ly/3uSkeUQ
• February 26, 2024 – Appia Reports High-Grade Total Rare Earth Oxide Results up to 22,339 ppm or 2.23% on Diamond Drill Hole #1 Within Target IV at PCH IAC Project, Brazil https://bit.ly/48DKQHe
• February 26, 2024 – Kraken Energy Commences Drilling at Harts Point & Provides Corporate Update https://bit.ly/49r02bS

ESG, does the bell toll for thee?

Given the recent hullabaloo around the decision of three major US financial institutions – JPMorgan, State Street and Pimco – to withdraw from Climate Action 100+ (CA+), one might think so. In addition, Blackrock announced it would remain engaged, but through its European-based offices. It appears the three financiers who have withdrawn are bowing to pressure from some Republican politicians claiming that CA+ activities are in violation of US antitrust and securities laws. But before we accept the perception that this is a death-knell for global ESG efforts, let’s take a look at a few important factors about this group, its activities and relative effectiveness, as well as broader ESG “infrastructure.”

CA+, the world’s largest climate investor group with over 700 members (important factor number one) works with high-emitting companies across the global supply chain to help them transition to a low-carbon economy. Its efforts are coordinated by five investor networks including the UN-backed Principles for Responsible Investment (PRI) whose “green” standards underpin several industry initiatives such as Copper Mark and Responsible Steel (important factor number two). CA+ “clients” include Grupo Mexico (mining), PEMEX (Mexico’s largest state-owned oil company), Aramco (Saudi Arabia’s oil company), and UltraTech Cement (Indian construction materials), illustrating its expansive reach (important factor number three). So, while of course disappointing and dismaying, the withdrawal of the three US financial institutions should not crush CA+ efforts.

Turning to the broader ESG situation, the above-mentioned industry initiatives (Copper Mark and Responsible Steel) are examples of how particularly the extractive industries have acknowledged the importance of fully integrating sustainable and ethical practices into their operations. The International Council on Mining and Metals (ICMM), a voluntary membership mining group founded by several of the industry’s largest companies including Rio Tinto Group (NYSE: RIO | LSE: RIO), Freeport-McMoRan Inc. (NYSE: FCX) and BHP Group (ASX: BHP | NYSE: BHP) among others, also has developed a series of Principles to help guide companies in sustainable extraction activities from mine inception to closure. While the initial impetus for many of these actions came from NGO scrutiny of end-user products and subsequent pressure from those companies on their suppliers to ensure “clean” and ethical extraction, the extractive companies have gone beyond that starting point to collectively develop measures whose costs and benefits make sense to the industry. (One example of early pressures would be smelters who began to insist to their mine suppliers that they needed to be able to certify their product as child-labor free, or the famous “blood diamonds” campaign.) While some companies are choosing to place their ESG procedures under safety and security in their internal organizations, they nonetheless are adhering to sustainable practices and most companies now have sustainability reports on their websites and for their Boards and investors.

These are pragmatic decisions by companies facing intensified scrutiny by governments and societies. Regulatory measures related to ESG standards continue to multiply, sometimes in a confusing fashion, a point which needs to be addressed. For instance, the European Union recently enacted a law imposing financial penalties on companies found to be “greenwashing,” usually defined as a company making bold statements without any substantiating operational or financial evidence that the claimed activities are real.

Perhaps most importantly, so-called real people are seized with the core of ESG, i.e. that environments should be protected and benefits shared. Over the past few years, several notable examples include protests in Greenland which forced a government transition and a rewrite of a proposed mining project; Serbia, where again a government fell amid accusations that the proposed mining contract did not adequately compensate the country, and most recently Panama, where a company was forced to cease operations with potentially disastrous financial results. This heightened activism is unlikely to disappear, providing a cautionary tale that the social license to operate will continue to become more costly for companies who are perceived to not be doing enough in the ESG realm.

Bottom line? ESG is not on the ropes, despite the hype, and companies who want to thrive are adapting to survive.

Welcome to the latest issue of the Technology Metals Report (TMR), brought to you by the Critical Minerals Institute (CMI). In this edition, we compile the most impactful stories shared by our members over the past week, reflecting the dynamic and evolving nature of the critical minerals and technology metals industry. From the Inflation Reduction Act’s challenges for the American EV industry to China’s lithium market developments and Treasury Secretary Janet Yellen’s strategic visit to Chile, our report covers a wide array of developments crucial for stakeholders. The unveiling of Tesla Inc.’s (NASDAQ: TSLA) lithium refinery in Texas, alongside CATL’s confirmation of its lithium mine’s normal operations, paints a picture of the industry’s efforts to navigate through pricing volatilities, supply chain complexities, and geopolitical tensions. Moreover, the significant moves by major financial institutions in the uranium market and Gecamines’ strategic overhaul in the DRC underline the shifting paradigms in the mining and investment landscapes of technology metals.

This TMR report also highlights the broader implications of these developments on the global stage, including efforts to diminish reliance on China for essential metals, the impact of Tesla’s pricing strategies on the used EV market, and the strategic dialogues around rare earths markets. The visit by US Treasury Secretary Janet Yellen to Chile is spotlighted as a key initiative to bolster ties around critical minerals, emphasizing the urgency of diversifying supply chains amid growing demands for green transition materials. Additionally, the narrative around the challenges posed by the Inflation Reduction Act for Tesla and the US car industry, coupled with BHP’s cautionary stance on the Australian nickel sector, illustrates the complex interplay between policy, market dynamics, and strategic resource management. As we delve into these stories, our aim is to provide a comprehensive overview that informs and stimulates discussion among policymakers, industry leaders, and stakeholders, navigating the intricate pathways towards a sustainable and competitive future for critical minerals and technology metals.

MP Materials swings to quarterly loss on falling rare earths prices (February 22, 2024, Source) — MP Materials Corp. (NYSE: MP) reported a fourth-quarter loss, attributed to declining rare earths prices and increased production costs, despite expectations of a larger deficit. Amidst unsuccessful merger discussions with Lynas Rare Earths Ltd. (ASX: LYC) and competition from Chinese firms, CEO Jim Litinsky emphasized the potential for mutual learning and cost reduction among companies. Despite a 2.7% drop in shares on Thursday, a slight recovery was observed in after-hours trading. The company experienced a significant shift from previous year’s profit to a $16.3 million loss. Sales of rare earths concentrate to China decreased by 34% due to lower production at its Mountain Pass mine, exacerbated by facility issues. However, MP is advancing in refining rare earths domestically, with ongoing projects in California and Texas, and has initiated production in a new facility in Vietnam.

Stalling the American EV Industry: The Unintended Consequences of the Inflation Reduction Act’s Attempt to Bypass China for Critical Minerals (February 22, 2024, Source) — The Inflation Reduction Act (IRA), integral to President Joe Biden’s environmental strategy, seeks to transition the American automotive industry towards a US-centric electric vehicle (EV) supply chain, reducing reliance on Chinese materials. This shift, exemplified by initiatives like Tesla Inc.’s (NASDAQ: TSLA) lithium refinery in Texas, aims to enhance the competitiveness of American-made EVs. However, the IRA’s stringent requirements for sourcing materials domestically or from approved countries by 2024 pose significant challenges, complicating efforts by major manufacturers to maintain affordability and quality. Jack Lifton, an expert in the field, highlights the complexity of creating a new EV supply infrastructure and the strategic challenges of overtaking China’s advanced position in the EV sector. The article emphasizes that realizing the IRA’s vision demands innovation, strategic foresight, and time, presenting both obstacles and opportunities for the U.S. automotive industry in its quest for sustainability and energy independence.

Battery factories: Europe’s mechanical engineering companies are lagging behind (February 22, 2024, Source) — The report “Battery Manufacturing 2030: Collaborating at Warp Speed” by Porsche Consulting and the German Engineering Federation (VDMA) highlights the expansion of battery factories, with around 200 set to be constructed worldwide in the next decade, predominantly in Europe. Despite this growth, European mechanical engineering firms are trailing behind their Asian counterparts, particularly in supplying high-tech equipment for these factories, with only 8% of such technology currently coming from Europe. This low market share limits Europe’s influence on technical development in the battery sector. The study suggests that to avoid technological dependency and enhance their market position, European companies must aim for at least a 20% market share, requiring significant growth and collaboration to offer integrated factory solutions competitive with turnkey plants from China. The study emphasizes the potential for growth and the critical need for European firms to innovate and collaborate to secure a substantial stake in the rapidly expanding battery production technology market, estimated at 300 billion euros by 2030.

“This is a very important article, because it illustrates that the EV battery manufacturing industry has become technologically dependent upon Chinese manufacturing technology for efficient and economical production. Is this the beginning of the end for any attempt by the non-Chinese world to catch up? No, we’ve already reached that point, and what other manufacturing industries in the West are circling the drain?” – Jack Lifton, CMI Co-Chair & Co-Founder

China’s CATL says its lithium mine operating normally (February 22, 2024, Source) — Chinese battery giant Contemporary Amperex Technology Co. (CATL) has confirmed that its lithium mine in Jiangxi province is operating normally, amidst market speculation of a halt due to falling lithium prices. The Jianxiawo mine, rich in hard rock lepidolite and a subsidiary of CATL, faced rumors of reduced or stopped production due to economic challenges. However, CATL asserts production is ongoing as planned, despite market rumors suggesting otherwise. After the Lunar New Year holiday, it was noted that only one of two production lines resumed operation. The mine, which began phase-one production recently, aims for a 200,000 tons capacity of lithium carbonate equivalent (LCE) upon completion of all phases. Despite high production costs compared to current market prices, analysts predict significantly lower output this year than initially expected, with potential delays in future expansion due to these costs. The speculation had earlier boosted Australian lithium stocks.

China’s lithium carbonate futures jump on talk of environmental crackdown (February 21, 2024, Source) — On Wednesday, China’s lithium carbonate futures prices experienced a significant rally, driven by market speculation regarding potential environmental inspections in a key production area. This speculation raised concerns about possible output restrictions, leading to a 6.35% increase in the most-active July contract on the Guangzhou Futures Exchange, reaching 99,600 yuan per metric ton. Speculation centered around Yichun, a major lithium production city in Jiangxi province, facing environmental checks that could limit operations for producers failing to properly manage lithium slag. Despite these rumors, major producers in Jiangxi continued their operations as planned, with some undergoing scheduled maintenance. The price surge, reflecting concerns over supply constraints, followed a rally in Australian lithium stocks prompted by rumors that Chinese battery maker CATL had closed its Jianxiawo mine.

Yellen to Visit Chile in Push to Boost Ties on Critical Minerals  (February 21, 2024, Source) — US Treasury Secretary Janet Yellen is scheduled to visit Chile next week as part of an effort to strengthen the United States’ ties with Chile, focusing on the South American nation’s significant role in the green transition through its contribution to renewable energy policies and as a supplier of critical minerals. This visit is a strategic move by the US to diversify its critical minerals supply chain and reduce its dependence on China, which currently leads the market for essential metals necessary for energy transition technologies. Chile, possessing one of the world’s largest lithium reserves, is seeking foreign investment to expand its capacity within the global battery supply chain. The visit, which follows Yellen’s attendance at a G20 finance ministers’ meeting in Sao Paulo, aims to deepen bilateral economic relations, particularly in the context of Chile’s potential to benefit from President Biden’s green stimulus program due to a free-trade agreement with the US, thereby supporting North American electric vehicle production.

Tesla’s price cuts are driving down car values so much that EV makers are sending checks to leasing firms to compensate them (February 21, 2024, Source) —  Tesla’s price reductions have significantly lowered the resale value of used electric vehicles (EVs), prompting automakers to issue compensation to leasing companies like Ayvens to cover these losses. This adjustment comes as the industry is pushed to sell more EVs to avoid fines, with leasing firms seeking protections against further depreciation in the $1.2 trillion second-hand car market. The demand for used EVs fell due to Tesla’s price cuts, affecting companies that play a vital role in the corporate car market. To mitigate risks of depreciation, negotiations for buyback agreements and re-leasing options are underway. Regulatory pressures for lower fleet emissions compound the issue, as unstable used-EV pricing challenges the transition to electric mobility by 2035. Corporate shifts, like SAP SE discontinuing Teslas for employees, underscore the broader impacts of volatile EV pricing on the industry.

Biden’s EV Dreams Are a Nightmare for Tesla and the US Car Industry (February 20, 2024, Source) — The Inflation Reduction Act (IRA), initiated by President Joe Biden to foster a US-centric electric vehicle (EV) supply chain and reduce reliance on Chinese components, poses significant challenges for Tesla and other American car manufacturers. Despite Tesla’s initial steps towards compliance, including sourcing batteries from within the US and building a lithium refinery in Texas, the company’s substantial procurement of Chinese lithium-ion batteries underscores the complexity of shifting away from China’s supply network. The IRA mandates stringent sourcing requirements for battery components and raw materials, aiming to cut China’s dominance in the EV sector. However, these measures have compelled carmakers to navigate a difficult transition, risking the affordability and competitiveness of EVs. As Tesla, GM, Ford, and others strive to adapt to these evolving standards and develop alternative supply chains, they face the daunting task of balancing economic, environmental, and strategic objectives in a rapidly changing global market dominated by geopolitical tensions and the strategic distribution of critical minerals.

Goldman, hedge funds step up activity in physical uranium as prices spike (February 20, 2024, Source) — Investment banks Goldman Sachs and Macquarie, along with some hedge funds, are increasingly engaging in the uranium market, driven by a spike in uranium prices to 16-year highs. While many banks remain cautious, these institutions are actively trading physical uranium and, in Goldman’s case, its options. This shift is fueled by utilities’ need for new supplies amid shortages. The interest in uranium is also growing among hedge funds and financial institutions, a notable change after the sector’s stagnation post-Fukushima disaster. Uranium prices have doubled over the past year, reaching $102 a pound, prompted by production cuts from top producers and a renewed interest in nuclear energy as a means to reduce carbon emissions. Goldman Sachs has also introduced options on physical uranium for hedge funds, marking a significant development in the market. This increased activity reflects a broader appeal of uranium to financial investors, with notable investments in physical uranium as well as equities related to the sector.

Gecamines plans overhaul of mining JVs in world’s top cobalt supplier (February 20, 2024, Source) — Gecamines, the state miner of the Democratic Republic of Congo, is seeking to renegotiate terms of its copper and cobalt joint ventures to increase its stakes and gain more control. Aiming to leverage global demand for minerals essential for the green energy transition, Gecamines plans to secure better off-take contracts and ensure local representation on venture boards for improved asset management. The strategy addresses past oversights, focusing on rectifying prolonged indebtedness and insufficient investment by some partners. Recent deals, like the one with China’s CMOC Group, exemplify Gecamines’ efforts towards securing equitable terms, demonstrating a push for enhanced returns, community benefits, and transparency in the world’s top cobalt supplier and a leading copper producer.

Industry Leaders Lifton and Karayannopoulos China’s Influence on Rare Earth Prices and Markets Today (February 19, 2024, Source) — In an insightful interview, Jack Lifton and Constantine Karayannopoulos delve into the complexities of the rare earths market. Karayannopoulos, wary of current market trends, notes a decline in prices for key elements like neodymium and praseodymium and maintains a cautious outlook due to the industry’s cyclical nature. Lifton points out the impact of China’s economic struggles on low rare earth prices, advocating for strategic investments in mining and processing at this juncture. Both experts discuss the discrepancy between market expectations and reality, particularly in the context of China’s economic growth and the slower-than-anticipated expansion of its magnet industry, vital for electric vehicle production. They emphasize the significance of investing in raw materials and processing to navigate and leverage China’s market dominance effectively, offering a comprehensive view on economic trends, geopolitical strategies, and investment opportunities in the rare earths sector.

BHP says Australian support for nickel miners ‘may not be enough’ to save industry (February 19, 2024, Source) —  BHP Group (ASX: BHP | NYSE: BHP) warned that Australian government efforts to support the nickel industry might not suffice amid challenges, as a write-off in its nickel operations led to a nearly 90% drop in first-half net profit. The crisis in Australia’s nickel industry is due to a price collapse from a supply glut in Indonesia. Despite government measures like production tax credits and royalty relief, BHP’s CEO, Mike Henry, suggested these might be inadequate due to structural market changes. BHP, facing a $3.5 billion pre-tax impairment charge on its Nickel West operation, is contemplating suspending its activities there, despite healthy nickel demand from the electric vehicle sector. However, Henry highlighted copper, potash, and iron ore as stronger growth areas for BHP. The company announced a higher-than-expected interim dividend, reflecting robust copper and iron ore performance, and anticipates stability in commodity demand from China and India.

US Bid to Loosen China’s Grip on Key Metals for EVs Is Stalling (February 19, 2024, Source) — The U.S. is striving to diminish its reliance on China for crucial metals like gallium and germanium, vital for electric vehicles and military technology. Efforts have been hampered by the diminished efficacy of the U.S. National Defense Stockpile and budget cuts, revealing vulnerabilities to supply shocks. Despite the Biden administration’s initiatives to diversify metal sources through international deals and domestic projects, China’s control over the global metal supply remains strong. Recent legislative reforms aim to enhance strategic stockpiling and procurement flexibility, but challenges in establishing a coherent strategy and securing stable mineral supplies continue. The situation underscores the complex dynamics of global supply chains and the critical nature of these metals for technological and defense applications.

JPMorgan, State Street quit climate group, BlackRock steps back (February 15, 2024, Source) — JPMorgan Chase and State Street’s investment arms exited the Climate Action 100+ coalition, a global investor group advocating for reduced emissions, withdrawing nearly $14 trillion in assets from climate change initiatives. BlackRock scaled back its participation by shifting its membership to its international arm. These moves follow the coalition’s request for members to intensify actions against companies lagging in emission reductions. Despite political pressure from Republican politicians accusing financial firms of antitrust and fiduciary duty breaches, none cited politics as a reason for their departure. State Street cited conflicts with the coalition’s new priorities, which include engaging policymakers and public emission reduction commitments, as misaligned with its independent approach. BlackRock aims to maintain independence while prioritizing climate goals for its clients.

Investor.News Critical Minerals Media Coverage:

• February 22, 2024 – Stalling the American EV Industry: The Unintended Consequences of the Inflation Reduction Act’s Attempt to Bypass China for Critical Minerals https://bit.ly/3T8IpYE
• February 22, 2024 – Revolutionizing Energy Storage with NEO Battery Materials’ Strategic Advances in Silicon Anode Technology https://bit.ly/3T5rO80

Investor.News Critical Minerals Videos:

• Industry Leaders Lifton and Karayannopoulos China’s Influence on Rare Earth Prices and Markets Today https://bit.ly/3SNSuZk

Critical Minerals IN8.Pro Member News Releases:

• February 22, 2024 – American Rare Earths Announces A$13.5m Placement to advance Halleck Creek Project https://bit.ly/3wuU1fB
• February 22, 2024 – First Phosphate Project Receives Letter of Support from Mario Simard, Canadian Parliamentary Deputy for the Riding of Jonquière, Québec https://bit.ly/3SQAP3i
• February 21, 2024 – Nano One Adds 4 More Lithium Battery Manufacturing Patents in Asia – Boosts Total to 40 https://bit.ly/3I6EmFL
• February 21, 2024 – Power Nickel Expands on High Grade Cu-Pd-Pt-Au-Ag Zone 5km northeast of its Main Nisk Deposit https://bit.ly/433eJj3
• February 20, 2024 – American Clean Resources Group Acquires SWIS Community, LLC, an Environmental Water Technology Company https://bit.ly/3T6iSis
• February 20, 2024 – First Phosphate Provides Update on Plans for a Purified Phosphoric Acid Plant at Port Saguenay, Quebec https://bit.ly/4bINVs4
• February 20, 2024 – Western Uranium & Vanadium Receives over $4.6M from Warrant Exercises https://bit.ly/3UI3DxH
• February 20, 2024 – Appia Unveils Significant REE, Cobalt and Scandium Assay Results From 47 RC Drill Holes at the Buriti Target Within Its PCH IAC REE Project, Brazil https://bit.ly/3ST4GIG
• February 20, 2024 – Fathom Nickel Announces the Closing of Its Second and Final Tranche of Private Placement https://bit.ly/3wjSSr7
• February 20, 2024 – Canadian GoldCamps to Earn 50% of Murphy Lake for $10M Exploration Spend https://bit.ly/4bBbtz0

To become a Critical Minerals Institute (CMI) member, click here

My biggest takeaway from COP26 is not so much climate action and emission reduction, but the message of sustainability. Without focusing on the importance of sustainability one risks thundering down a path of unintended consequences. What do I mean by this? Several years ago I read that if we could convert all coal fired power generation to natural gas it would achieve the Kyoto emission target. I can’t confirm if this is completely accurate or not, regardless it would have been a large step in the right direction (despite still being a fossil fuel based solution). At the time it would also have been achievable with existing, available resources and bought the world some time to continue building out renewable resources, which is the ultimate end game. However in 2021, with the lack of energy investment over the last several years due to a combination of factors, that isn’t the case today, and we are starting to see parts of the world where renewables haven’t developed enough by themselves to even keep people warm this winter. Meanwhile, the fossil fuel alternatives aren’t any longer as readily available as backup and may still not even provide enough for home heating. I understand the urgency of eliminating coal fired power, but if there aren’t enough alternative power options to keep people warm then who knows what happens next.

That’s why I think in order to successfully green our economy and reduce our global carbon footprint, the focus has to be on how to do it sustainably. One company that has to be at or near the top of the list in the transition to clean energy in a sustainable way is Nano One Materials Corp. (TSX: NANO). Nano One is a clean technology company with a patented, scalable and low carbon intensity industrial process for the low-cost production of high-performance lithium-ion battery cathode materials. The technology is applicable to electric vehicle, energy storage, consumer electronic, and next generation batteries in the global push for a zero-emission future. Nano One’s One-Pot process, its coated nanocrystal materials, and its Metal to Cathode Active Material (M2CAM) technologies address fundamental performance needs and supply chain constraints while reducing costs and carbon footprint.

Another facet of sustainability that is very applicable today is the supply chain. Currently, the cathode supply chain is long and complex. Nano One manufactures its cathode materials directly from nickel, manganese, and cobalt metal powder feedstocks rather than metal sulfates or other chemical salts. The metal powders used are one fifth of the weight of metal sulfates, avoiding the added costs, energy, and environmental impact of first converting to sulfate and then the shipping and handling of waste. The manufacturing process for all of its Cathode Active Material (CAM) uses lithium feedstock in the form of carbonate rather than of (lithium) hydroxide, which is costly, corrosive and harder-to-handle. The process is feedstock flexible which enables improved optionality of sourcing of raw materials. Nano One’s technology aligns it with the sustainability objectives of automotive companies, investment communities and governmental infrastructure initiatives.

On Tuesday, November 10, 2021, Nano One announced the goal of building a fully integrated and resilient battery supply chain in North America, which must include responsible mining of battery metals, onshore refining, environmentally favorable cathode material production, and recycling. The Company believes there is a once-in-a-generation opportunity to create a secure and cost competitive supply chain that is domestically integrated with a low environmental footprint. Accordingly, Nano One is shifting its LFP (lithium-iron-phosphate) cathode material strategic direction to large emerging markets outside of China, starting in North America, and has ceased joint development activities with Pulead Technology Industry.

LFP production is free from the constraints of nickel and cobalt, and although its origins are deeply rooted in Canada, its growth over the last decade is almost entirely based in China. Recent LFP cell-to-pack innovations have driven costs down and enabled greater EV range, setting the stage for EV pioneers to shift to LFP. The need has never been greater for a sustainable, responsible, and secure supply of LFP materials and batteries, to be established and supported in North America and Europe, proximal to where the EV’s are manufactured. Canada has clean energy assets, responsibly sourced critical minerals, and a rich history in LFP technology and manufacturing. By leveraging these opportunities with the Company’s simplified low-cost approach to cathode production, Nano One seeks to create a resilient value-added North American LFP supply chain in a collaborative ecosystem with a smaller environmental footprint.

There you have it. A company that sees the bigger picture and embraces sustainability in an effort to advance clean technology while reducing both costs and the overall carbon footprint. If this were a video, at this point I would simply drop the mic and walk away. Since it’s an article and I need a conclusion I’ll finish off by saying Nano One has the potential to have its technology in every EV built in North America and Europe, and that’s going to be a pretty big number in the not too distant future.