Biden and Newsom want to secure a domestic supply chain for critical minerals

President Biden is looking to California to help secure a permanent pipeline of critical materials essential to the tech industry that can boost the nation’s green energy production and its competitiveness.

Speaking Tuesday at a virtual roundtable with Gov. Gavin Newsom, the president touted a series of investments around the country, highlighting several in California, including a new $35-million contract that the Department of Defense has awarded a Las Vegas company to separate and process heavy rare earth elements at its facility in Mountain Pass, Calif. The goal of the contract with MP Materials will be to establish a permanent end-to-end domestic supply chain for the magnets used in electric vehicle motors, electronics and wind turbines.

Nearly 100% of the nation’s critical minerals are imported from foreign sources, including materials such as lithium and graphite, “which are badly needed for so many American products,” Biden told the group of gathered industry and community leaders.

“China controls most of the global market of these minerals, and the fact is that we can’t build a future that’s made in America if we ourselves are dependent on China for the materials, the power, the products,” he said.

U.S. officials have long emphasized that such a lag in competitiveness poses not only an economic risk, but also a national security one. Those concerns were driven home Tuesday as Biden joined the roundtable minutes after announcing economic sanctions against Russia for its latest military incursion in Ukraine.

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Minerals such as lithium, which is abundant in the Imperial Valley, are the building blocks for many technologies found in everyday products such as computers and household appliances, as well as green technology.

Among the projects Biden touted: Berkshire Hathaway Energy Renewables plans to break ground on a demonstration facility in April in Imperial County, where the company will test their lithium extraction process. It’s a multibillion-dollar investment in sustainable lithium production over the next five years. The company received $6 million for the project from the California Energy Commission.

Controlled Thermal Resources and EnergySource Minerals have also established operations in Imperial County to extract lithium from geothermal brine.

“These new investments are going to do more than create good-paying jobs. They are also going to set America up to lead the world in building a clean energy economy and a clean energy future,” Biden said.

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With such a positive outlook for a Californian critical minerals industry, Newsom said the state will focus “not just on the economic opportunity, but making sure that the growth and inclusion strategies include local hires, local benefits in a sustainable way.”

“We’re still doing a lot of the due diligence, but if it’s as big as it appears to be, this is a game changer in terms of our efforts to transition to low-carbon green growth and radically change the way we produce and consume energy,” Newsom said.

Silvia Paz, executive director of Alianza Coachella Valley, who attended the event, said that when her community hears about the excitement around lithium, “there is a cautious optimism.”

The Salton Sea, in northern Imperial County, faces environmental degradation, and her organization is concerned about the impact of the race to extract more lithium. The region also has high unemployment rates and was hit hard by the COVID-19 pandemic.

“[Could] this be a game changer?” she echoed Newsom. “Yes, it could, if done right.”

This means pursuing plans “in an environmentally friendly manner” and involving the local community from the beginning, so “that they can have a seat at the table when we’re talking about community workforce agreements and determining what percent of labor should come from the local region,” she said.

Global demand for critical minerals is set to skyrocket by up to 600% over the next several decades, White House officials said. For minerals such as lithium and graphite, which are used in electric vehicle batteries, the administration said, demand is expected to increase by as much as 4,000%.