Weighing the Impacts of Critical Mineral Mining

Guest

Ernest Scheyder

Senior Correspondent, Reuters

Transcript

Ernest Scheyder [00:00:03] Everything is battery powered now. When I started to look at leaf blowers and the battery powered leaf blowers, I said, okay, well, where is the copper coming from in this battery? Where is the nickel coming from? That a seven year old in the in the Congo, in the Democratic Republic of Congo dig the cobalt out of the ground that went into this leaf blower. And I couldn’t find any answers at all about that. And that’s just one device among the thousands that are now permeating our everyday lives. So we have to be thinking through where we get these materials.

Jason Bordoff [00:00:32] The energy transition requires a lot of minerals lithium, copper, cobalt, nickel and other materials that are collectively known as critical minerals are vital components of most clean energy technologies. And according to the International Energy Agency, getting on track for net zero will mean a six fold increase in demand for these minerals by 2040. But mineral production has a mixed history. Without proper protections, mining can have negative impacts on environmental health, labor practices and indigenous communities. Therefore, the prospects for a just energy transition will depend both on meeting future demand for critical minerals and also on doing so in a just and sustainable way. What does the next decade hold for the mining industry? What challenges will critical minerals pose for energy and geopolitics? And what can be done today to overcome these challenges? This is Columbia Energy Exchange, a weekly podcast from the Center on Global Energy Policy at Columbia University. I’m Jason Bordoff. Today on the show, Ernie Shiner. Ernie is a senior correspondent for Reuters covering the green energy transition and critical Minerals. He’s also the author of a great forthcoming book, The War Below Lithium, Copper and the Global Battle to Power Our Lives. The war below details the complex choices facing our world as the energy transition accelerates. Ernie’s previously covered the American shale oil Revolution, politics and the environment. Ernie joined me to discuss critical minerals supply, the geopolitics of these supply chains, and what a cooperative approach to environmental and indigenous rights might look like. I hope you enjoy it. Ernie Shiner. Welcome to Columbia Energy Exchange. Great to have you with me.

Ernest Scheyder [00:02:30] It’s great to be with you, Jason.

Jason Bordoff [00:02:32] And congratulations on the book The War Below Lithium, Copper and the Global Battle to Power Our Lives. I read it this weekend and really enjoyed it. I’m sure everyone listening will as well. So I know there’s a lot of work. Congratulations.

Ernest Scheyder [00:02:44] Thank you. Yeah, I’m excited to share these stories with the world. And I think it’s a topic that will be widely digestible and a topic that matters to all of us. If we want to go green, if we think the clean energy transition is the way to fight climate change, we have to be having a discussion about where we get the minerals and minerals that power all of these devices and technologies. And really, it’s a book about community and choice because frontline communities all over the world face these tough decisions about whether we should dig up holy lands that are important to indigenous communities or ecologically sensitive places or just our backyards, or people don’t want mines. So there’s tough choices facing us all. And I’m excited to share this book with everyone.

Jason Bordoff [00:03:28] Yeah, I’m excited for people to read it. There’s been, you know, a market increase in critical minerals. I think a broader understanding of what it actually takes to power a clean energy economy. I was just in Paris a week or so ago for the first ever ministerial summit that the IEA had over critical minerals. And just one after another, you see more and more attention being brought to this issue. You know, you and I have interacted a lot over the years, and I think that all started when you were in covering energy, but about a different revolution taking place, the shale revolution. That’s right. The oil and gas that was being pulled out of the ground in new and innovative ways in the United States. Just talk a little bit about kind of now focusing on writing a book about critical minerals and, you know, some of what you just described. There are there are there are tradeoffs. And how do we think about local communities and what the impacts are? You know, I’m curious what you what you brought to that work from being a reporter in the oil and gas sector and what you see as similarities, differences, What are the challenges and what motivated you to focus so much time writing this book on all the metals that we need? Sure.

Ernest Scheyder [00:04:38] Well, before I wrote about metals and minerals, my I should say my day job is at Reuters where I’ve been writing about energy and had the great opportunity to write about energy related topics for almost 15 years. And my current area of focus is around metals and minerals. Before that, as you said, Jason, I did write about the oil and gas space and had the opportunity to live in North Dakota for almost two years for Reuters. And I did enjoy it. You know, a lot of people do chuckle when I say I lived in North Dakota, but I was based in Williston on the far western edge of the state and really the epicenter of the state’s oil and gas boom and a lot of fracking technology.

Jason Bordoff [00:05:15] In many ways, it was the epicenter of where the shale oil revolution sort of started. Right. And kind of spread to Texas next. But North Dakota and Williston and the Bakken was where a lot of that got started.

Ernest Scheyder [00:05:25] Yup. And I had moved there from from New York. And so when I would go back to New York and visit folks, I would often get the question fracking, good or bad. And oftentimes these are people that would show up to a party in a yellow taxi powered by gasoline or be drinking out of a red solo cup made from petroleum products or had used personal care products or or wearing polyester. And so there’s no easy answers there. And that’s often where I would talk to folks about, is it requires that a really detailed look at the supply chains for our daily lives. And so the binary is fracking good or bad is perhaps not the way to frame the question. And when I transitioned about 4 or 5 years ago to look at the mining industry, I started to get a lot of the same questions from folks, but in a more curious or nascent way, because at the time electric vehicles weren’t quite as prominent as they are today and they’re still not widely prominent, that that will change, though. And we also started to get a lot more questions around just climate change in general. If oil and gas is contributing to a changing climate, what are the options to help abrogate that? And it became obvious right away that it would require a lot of lithium, a lot of copper, nickel, rare earths and other metals and minerals. So what are the choices that we’re willing to make here? And I started to see a lot of the same parallels in my reporting for Reuters as I drove into this new space and really starting to see the opportunity to write a longer story, exploring these questions and looking really at the human side of this. For the people that live on the front lines of this this big transition, really, you know, too often, I think especially the United States folks just are used to exporting the production of many of the products in their daily lives without thinking about what are the choices that we’re willing to make. One of the key projects that I explore in the book is a proposed copper mine about an hour. Phenix, Arizona, that Rio Tinto and BHP, two of the world’s largest mining companies, would like to do. It would be an underground mine. Unfortunately, the copper deposit sits below an Indigenous holy site that the San Carlos Apache tribe consider as the home to their religious deities. And so the question here, it involves a lot of areas around U.S. federal law and indigenous rights. And so there’s a lot of competing legal and court battles going on right now. But at its core, this is a question about what do we value more? Should we destroy this indigenous holy site that the Senkakus Apache consider as important to their religion as St Peter’s Basilica is to the Roman Catholics or the Temple Mount is to to members of the Islamic faith. And so the question becomes like, should we just dig up and destroy it for copper to be put into our electric vehicles and other devices? And this is not a question that you and I are going to solve on this talk today, Jason and Naomi, on this.

Jason Bordoff [00:08:25] I have I have high ambition for our podcast.

Ernest Scheyder [00:08:27] We are well, we are going to get there. Okay. And I like the positivity. What I hope those are folks who think through the tough questions there. And it’s not just electric vehicles, right? I mean, I think too often people look at electric vehicles nowadays is something that they can’t afford and that’ll change in a few years. But everything is going electric. I have a chapter in the book on leaf blowers because it was to me, it was such a great encapsulation of the huge electrification change taking over our lives. Everything is battery power now. I got a house a few years ago and I said, I’m going to, you know, do the suburban dream and more my own line. And when I started to look at leaf blowers and the battery powered leaf blowers said, okay, well, where is the copper coming from in this battery? Where is the nickel coming from that a seven year old in the in the Congo, the Democratic Republic of Congo dig the cobalt out of the ground that went into this leaf blower. And I couldn’t find any answers at all about that. And that’s just one device among the thousands that are now permeating our everyday lives. So we have to be thinking through where we get these materials.

Jason Bordoff [00:09:35] Yeah, a lot of issues in what you just said to come back to, most notably as a fellow New Yorker, but one who lives in an apartment building, I have no no explanation for why you want to mow mow the lawn, but that’s besides the point. But it did. And I can picture the vista you’re talking about. I think. I think you’re referring to the resolution Copper mine, which. Yes. Yeah, that one which I had the chance to visit when my collaborator Megan O’Sullivan and I led this task force process for the Aspen Institute looking at critical minerals. And we brought the whole task force out there so you can picture the landscape you’re talking about. And of course, we met with tribal leaders and company leaders and local community officials and, you know, very different perspectives. We can we can come back to I was struck I kind of highlighted in the book the just coming back to where you started, which is how to think about similar challenges that are raised in in this some of these new metals we need for clean energy to what you covered in oil and gas you wrote mines are dusty increased truck traffic used dynamite for blasting that can rattle windows and crack foundations. Many mines have polluted waterways, produce toxic waste, require astronomical amounts of water. Of course, all the gas has CO2 emissions. And that’s the major challenge we have to solve. So but but a lot of what you wrote there is, is what you know, a lot of the concerns were with significant increase in in shale activity across the United States, of course, and trying to figure out how to do that in a way that accounted for those local environmental impacts. And you talked about community impacts, but there are a broader set of environmental impacts. I, I maybe I’ll ask you, I was picked I picked up a book expecting to read about metals and minerals. And I read I read a lot about unique and rare types of wild flowers and plants and just explain to people listening why that is.

Ernest Scheyder [00:11:28] Sure. So the core really of The Warbelow is a story of the proposed Rhyolite Ridge lithium project in western Nevada and a company based in Australia called Pioneer, Not Pioneer, but iron ore. So Pioneer without the Pea would like to dig this open pit mine that has one of the largest deposits of lithium in the United States. Very, very prolific deposit. The problem, though, is that a rare flower known as Tim’s buckwheat loves that soil. And this flower is found nowhere else on the planet besides this one spot. So this this flower loves the lithium. You know who loves lithium? Like every single battery manufacturer in the world, has been jumping all over themselves to get access to this lithium. So you can imagine this company’s big push to get this lithium out there. But the flower went through this big saga and it has been declared endangered by the US Fish and Wildlife Service. Also, there was another twist. Three years ago, about 15,000 of these flowers just mysteriously died. No one was really sure at first what caused them, and it created this big tension point around did somebody go out and dig them up? The answer, of course, was no. What actually happened was it was an extremely dry part of the year and a bunch of squirrels went out and not at the roots of these flowers. So you had a bunch of them that were killed or murdered, depending on your perspective. And so it’s created this huge uproar in the conservation community around issues of biodiversity. And so therein lies another tension point. We’ve talked about climate change, but is that going to supplant or be considered more important than biodiversity? And a lot of voices would say that biodiversity is just as important or even more important than addressing climate change. And so what I saw in the Twilight Ridge saga was a chance to really form the core of the spine of this entire narrative here. And so we do follow the main executive at Pioneer, James Calloway, who is a former oil industry executive, and sees really the opportunity here in this lithium project to help leave the planet better and cleaner than he found it. And he’s going up against a conservationist who is very ardently pro biodiversity and says the choice isn’t that black and white. We need to be protecting species no matter the cost. And we were talking about resolution just a few minutes ago, Jason, But I think that that choice for that question is amplified even more so here at Rhyolite Ridge. Like what? What matters more than the lithium or the plant that’s above it. And so the book looks at both the company and the conservation group that are for and against the project, and then also the sheer efforts by the company itself to build greenhouses, to hire botanists, to perpetuate seeds, to do all these sorts of botanical investigations that you just don’t normally think a mining company or an energy company in general would traditionally invest in. But this company has invested millions of dollars in this, and it’s got a lot of attention. President Biden and the rest of his administration gave this company more than $700 million of loans. So that would be the first lithium project in the United States to get a loan from Jigar Shah’s Department of Energy loan program. That’s a huge vote of confidence in the administration. But at the same time, as I mentioned, the U.S. Fish and Wildlife Service declared this flower endangered. So that just further peels back the onion for me at least, as to is one part of the federal government not talking to the other part because what still needs to happen here, the company still needs to get a mining permit, which is extremely difficult to do in the United States right now. And if they can’t get the mining permit, then they don’t get that loan from the Department of Energy and they don’t dig out that lithium and all that. Lithium does not go to the battery industry. I mentioned a bunch of people jumping over themselves for it. Ford Motor has signed a deal for lithium deposit for the supply of lithium from this project right next to Ford is very, very eager, among others for this. So, yes, as you were saying, yes, sensibly, it’s a book broadly about mining, but it’s also about a lot of the choices that are going into this. And mining is not just sort of a one track topic. There’s sort of many moving parts here. And I think that the flower for me encapsulates that stark choice.

Jason Bordoff [00:15:54] And I’m wondering, like when you were finished the reporting, did you feel like that stark choice was more or less real, more or less the case, meaning it’s a striking example and you sort of say, are there tradeoffs? Do we have to power? Do we care more about the climate or do we care more about a rare wildflower, a rare wildflower? But some might say, well, you don’t have to make those choices. There’s a lot of lithium in the world. There’s a lot of copper in the world. Go do it somewhere else. Just give our listeners the sort of sense of the scale we’re talking about what’s needed for this clean energy transition and are they real tradeoffs or is it a false choice? Do we have, you know, a lot of other options? So I would.

Ernest Scheyder [00:16:31] Point to sort of two examples. One is right now the world’s two largest lithium producers are Chile and Australia. And both have very prolific reserves and very different types of geological deposits. But the point that I would make is that they’re very far from the United States. And if we care about carbon emissions, one area to reduce carbon emissions is in transportation. So if you think right now about taking lithium out of the ground in northern Chile, then you have to process it into either lithium carbonate or lithium hydroxide. We can sort of geek out on that if you want. I might be way too in the weeds, but you then you get a ship to the coast, then you probably got to ship it to a cathode manufacturer in Asia because there’s no cathodes being made in the United States right now. And then you’ve got to have it put into a battery, whether that’s in Japan or China. But then you have to have that battery put into the electric vehicle. So let’s just say it’s Tesla. So then you’re shipping that battery back across the. Pacific Ocean to the United States, to a testing facility where somebody buys it. And so that’s an extremely long supply chain. And so one of the pushbacks, at least from the mining industry, is if this is a huge area of focus, if we’re talking about reducing carbon emissions, well, then why are we having a giant ship go across the Pacific Ocean twice with this lithium? Why shouldn’t we produce it domestically? Also post-COVID, there’s been a lot of focus on supply chains and domestically producing more of our own. That’s one of the goals of the Inflation Reduction Act that Senator Manchin and others pushed for. And, of course, is sort of more I’m not going to say minerals independence because I think that that’s sort of a. That’s sort of an impossible goal, but sort of maybe decreasing the reliance on sort of far flung places across the world. I mean.

Jason Bordoff [00:18:11] I guess one response to that would sort not to sorry to interrupt would be like, you know, we’re going to have if we’re going to get to these climate goals at some point, we’re going have to figure out how to decarbonize shipping. And so there may be climate benefits to manufacturing closer to home. But but but I don’t think it’s in my view, you tell me if you disagree, it’s probably not feasible or desirable or cost effective to say everything has to be done at home. We’re still going to need global trade.

Ernest Scheyder [00:18:35] Yes. Yeah, No, I would definitely I would definitely agree with you there. I think the more that consumers become aware of these long supply chains and I think Covid helps sort of push that forward, I think the more people are going to start to ask what is the carbon emissions of the products that I’m buying? You know, some electric cars that you see advertised on television now very cleverly will say, you know, zero emission at the tailpipe. And that’s true because there’s no tailpipe. But but, you know, what is the emission to actually produce everything that went into that? And I think increasingly you’re going to start to see consumers demand that on the showroom floor. Okay. What was the emissions that went into the nickel or the copper or the lithium that’s in this battery that I’m buying? Because the battery is the most expensive part of an electric vehicle and the most intense and material intensive part. So you’re going to start to see that. And the other point that I would make, Jason, is, is that one of the things that I started to notice over and over and over again as I was reporting out this book, is that everyone said we can do this elsewhere. We can have this tech take place elsewhere. And that’s, you know, a very human answer. I certainly understand that. You know, I talked to we spent a lot of time in Gaston County in North Carolina, which is just outside Charlotte, major booming metropolis, one of the fastest growing cities in the United States, also happens to be sitting on top of a giant lithium deposit that a company would like to dig out and sell. And this company has a deal with Tesla. But the question becomes, you know, should we be digging out this pastoral farmland in this area that’s sort of relatively close to a major metropolis. A lot of folks there will say, no, this is not the place that we should go. When I spent a lot of time in Arizona, we mentioned resolution very arid part of the United States. A lot of folks said we need a lot of water to produce copper, which is true. So they said we should go to a place where there’s a lot of water. And they pointed to Minnesota, where the Twin Metals, which is a company controlled by Chili’s. And if Augusta would like to take an underground mine to produce copper and nickel. But the concern there is because there’s so much water, it’s connected to the Great Lakes that if you had a leak with some of the chemicals that are used in the production process, you could pollute the entire Great Lake Great Lakes ecosystem. And so the rejoinder from those folks is, well, there’s too much water here going on in Arizona. So, you know, when you sort of have each of these issues compounded at each site, you can sort of imagine that that becomes a sclerosis and nothing ends up happening. And so what I hope folks come away with when they read the book is just a deep think about what goes into to all of these devices. You know, I mean, the phone folks are listening to this podcast on right now. Where is the copper from? That’s in the wiring inside that phone. You know, these are things that I hope folks think through a lot more and the choices that we make, if we want to have things like the iPhones to listen to this great podcast.

Jason Bordoff [00:21:28] So when you I mean, you gave one reason why you might want to onshore or near shore supply chains, the emissions associated with transport over large distances, maybe even a more dominant one lately has been national security concerns. And the very prominent role that China plays, particularly in many of these supply chains, particularly refining and processing as much as the actual mining. I just curious if you could talk a little bit I know you’re a reporter, so you’re telling stories. You don’t necessarily have opinions, but I want your opinions after doing this reporting. You know, is that risk overblown? How significant a concern should there be? Do we do if we have a very if China is a very significant player in these global supply chains for critical minerals? Did you leave this project more or less concerned about that?

Ernest Scheyder [00:22:17] I would say that that China has taken a huge step forward because the United States and other Western nations have taken a step backwards, had taken a step backwards. So one of the areas that that I would mention is around rare earths, which are this grouping of about 17 or 18 very minor metals. And they are a great analogy would be like the pepper on a steak, right? They’re used in very small amounts, but they have huge impacts on different devices, different electronic devices. So two types of rare earths go into magnets that can help turn power from battery into motion. An electric car, the device that vibrates your iPhone when you get a vibration on your iPhone, that that is a rare earth. Laser guided missiles and 13 fighter jets are rare earths. So there’s there’s sort of a huge use of them across the. Economy. Now, the United States founded really the moderate risk industry. Related to the Manhattan Project during and then after World War two and and California, we had the mountain past mine that became the world’s largest source of these. And it was a huge, dominant producer of the rare earth europium, which is the rare earth that’s used to make color TVs red. So you can imagine in the 50s and 60s, you’re really starting to see more color TVs go mainstream. The color red in there came from this California mine. The problem is that in the decades after that, China began to slowly increase its scientific research into this area, while the United States and other Western nations began to decrease. So they put a lot more focus into this space at the time that the United States put more focus on biofuels and other areas.

Jason Bordoff [00:23:53] I mean, as you say, I think in the 1980s, most of the world’s rarest came from the United States and then and then China, that that position shifted.

Ernest Scheyder [00:24:02] Correct, Correct. Yeah. So so now you’ve got the position where China controls 75 or 80% of this global industry. They also control much of the brainpower behind it. So you talk to a lot of rare earth industry executives nowadays and they talk about not being able to find the talent or if you wanted to take a class in rare earths, if you were at a mining school, and there aren’t that many in the United States, you know, your options would be few and far between. The first.

Jason Bordoff [00:24:28] In the country was Columbia, just so you.

Ernest Scheyder [00:24:30] Know. Yes, that’s right. Yes. Yes. School after both of our hearts. So I guess it’s a long winded way of answering your question. But I would say China has invested in the the brainpower, the person power and the technology into a lot of these parts of the supply chain. And that’s going to be hard to beat. Not impossible, but definitely hard to beat there. And we have seen this, especially in the rare earths processing space. It’s a very complex and time intensive and labor intensive process that’s got to be calibrated perfectly. And so China has spent spent decades really perfecting the process after it, in large part learning it from the United States and other Western nations. And now you’ve got companies in the United States and Australia and elsewhere trying to get their own processing equipment up and running, and they’re running into a lot of roadblocks. I’m not saying they’re completely insurmountable, but but they do pose a huge challenge there. So that’s that’s part of the sort of the broader landscape, the chapter of the book that looks at the mountain past the mine in California. I spent a lot of time looking at the courtroom drama about how the previous owner of this site went bankrupt. And this consortium, led by a Chicago hedge fund that was partnered with a Chinese company, actually won this out of bankruptcy. And the reason I spent so much time on that is because it just shows how much a lot of us industry right now is reliant on. The Chinese know how to get by part of the supply chains back up and running, which is ironic on many, many, many levels. And another thing that I really wanted to bring to the reader and say to her and him, this is a thing that needs to be considered as you think through these supply chains. I don’t think that’s original question. I don’t think it’s a US versus China thing so much as they’re thinking through where China has taken its industry the past 15, 20, 30 years. And what does the United States to others need to do in response.

Jason Bordoff [00:26:23] And the goal of diversifying supply chains, some of it more, more domestic. But then what the real challenges to doing that are political permitting. You know, everything you map out in the book, story after story for different metals. I’m curious if you ended more optimistic or pessimistic about our ability to overcome these. You know, if I remember correctly, the Epilog sort of talks about the Department of Energy Loan Guarantee program, does something, but then on some other part of the government can’t give a permit. And the impression I took from the Epilog was we’re moving in fits and starts and stumbling. And then and I think you said, you know, and and at the same time Bolivia was needed to expand its one of its mines and it went with China with a partner and it was pretty easy to move really fast and the money shows up. So I just kind of wonder if you left this being like, Yeah, it’s possible, but that’s not what’s happening today.

Ernest Scheyder [00:27:18] In my reporting at Reuters and also reporting for the book, you know, constantly exploring how one part of the U.S. federal government does not talk to the other. At least it doesn’t seem that way from the outside. And in talking with sources for the book, we know that that folks are very focused on their particular area, which makes sense because that’s what they’re tasked with. If you’re tasked with deciding if there is a red flower, is an endangered species, you’re sort of heads down on that. If you’re tasked with a financial instrument and doling that out, that’s what your head’s down at. But we started to see a lot of parts of the government not talk to each other. And I think that can change. We’ve had some recommendations as part of the the committee that’s looking at reforming the U.S. mining law, which has been the same mining law in place since 1872. And one of those recommendations was always having sort of a centralized clearinghouse so that companies can know what exactly they have to get through in order to obtain a mining permit or at least get a yes or a no. And Jason, you mentioned the great working group that you had with Megan at Harvard. Know, I mean, one of the recommendations was around permitting reform. One of the things that I heard constantly when I was reporting out this book was a lot of companies saying they just don’t know what they need to do. So they imagine that you, Jason, you own a thousand acres in Nevada and you say, I want to mine copper, just hypothetical. What do you need to do to get that mine up and running? That there’s no central place where you can go to say, hey, I would I, you know, tell me, you know, what are the ten permits I need? Who are the places I need to visit and show my plans to. That there’s no central clearinghouse. So it’s a very opaque process. And what that ends up doing is engendering a lot of frustration. And that came out in some chapters of the book. One of the one of the projects about getting one of the chapters is this project in northern Idaho from Perpetua Resources, which is controlled by John Paulson, the big gold financier. And Paulson’s very interested in this large gold deposit, which also happens to be intermingled with a lot of antimony, which the Pentagon really, really wants. But the company is fighting with the other with other federal regulators about whether they can get a permit to operate the site where at the same time, the Pentagon is giving the company money. So it’s sort of this big paradox here. So, yes, I do think the problems are solvable, but I think it’s going to take a lot of folks coming together and saying, what are the steps that needed to be taken? Because in that hypothetical example, about thousand acres that you own in the western United States, it’s nobody knows what the process is right now. It’s not clear at all. And it could be a lot clearer.

Jason Bordoff [00:29:55] We talk often about critical minerals. It’s like a big bucket of things. Talk about which minerals and metals you focus on in the book and why and how they’re different, how they’re similar and which ones people should kind of be most familiar with. Concerned about?

Ernest Scheyder [00:30:12] Sure. Yeah. So it does tend to be a term that we bandy around a lot that can be sort of confusing to the uninitiated. The book primarily focuses on lithium and copper, and that’s why they’re in the subtitle, and that is that for many reasons, lithium, because it powers lithium ion batteries that are really anchoring this this transition away from fossil fuels. That may change in 20 or 30 years to sodium or other materials. You know, I think the jury is still very much out on that right now. But for right now, lithium ion batteries are where we’re at. And the next generation beyond lithium ion batteries is called solid state, which uses even more lithium. So you see companies like Albemarle and others really doubling down on lithium, and it is considered a critical resource. Different governments, the European Union, the United States and others have their own lists of what they consider a critical mineral or critical resource. Lithium is on both of those lists. And as we’ve discussed, China, for obvious reasons, has really focused heavily on the lithium space. Copper was a more interesting one for me. Copper is not considered a critical mineral by the United States government for for a host of reasons that that really irk the copper industry, as you would imagine. The argument is, is that there’s a lot of copper out there. The copper industry is a lot more established. Copper recycling is a lot more common right now than the recycling of, say, lithium. You know, I grew up in Maine. Sort of a sad aside, growing up in Maine is if you had a house that was being built or was or had been abandoned, people would just leaf through the basement and take out copper pipes because they knew if you could take it to to a depot. And depending on what the price of copper was at that time, you could, you know, you get a huge chunk of change there. And so the industry is a little more developed. But when you just look at the sheer demand projection numbers around copper, S&P, the IEA, many others have done really detailed reports on this.

Jason Bordoff [00:32:09] I mean, you have a chapter called Electricity Means Copper, and.

Ernest Scheyder [00:32:13] That focuses on a huge part of that chapter, focuses on the free Port Macquarie and Morenci Mine in Arizona, which is this gargantuan giant mine. It’s the largest mine in North America. You can see it from outer space. And I had a great opportunity to go there and take a huge tour of the facility and you just get blown away by the sheer magnitude of what’s required to produce what’s called copper, copper, cathode or sheets of copper that that are turned into those pipes to go into houses or in wires that go into your iPhone. And so you get a sense of the scale of of this entire operation here. So that’s what I was really I really felt copper was important, too, to look at there. I mentioned the Twin Metals project earlier that has copper, but it also has nickel. And nickel is used in some electric vehicle batteries. It. Also is right now one of the main producers is Indonesia. And so you’ve got a lot of miners there that will tear up rainforests just as, you know, as destructive as it sounds, to get to the nickel underneath it. And so there’s a huge outcry. Should we be digging up rainforests in Indonesia, which has one of the world’s largest supplies of this metal in order to power electric vehicles and other electronic devices? Are there other places we should be mining? So that’s the future I look at. I mentioned rare earths, and given the geopolitical implications, felt that that was an extremely important to talk about. And also Cobalt the Democratic Republic of the Congo has some of the largest cobalt reserves in the world. And I talked about this a little earlier. Seven year olds and other young children are some of the primary miners really right now on this. They’re part of what’s called the artisanal mining movement. And what it basically is, is is families will sneak onto a site and mine cobalt, and there’s a network of folks that will buy that that rock off of these people and sell it into the global refining network. So you have no clue if the device that you’re carrying came from cobalt that was mined by a young child in Central Africa. And so that exposes sort of stark choices like are we comfortable having that process remain, that status quo remain, or are we comfortable digging into the northern United States where there’s large cobalt reserves that might result in tearing down part of a forest? But at least we’re helping to secure more cobalt? I don’t think the history is nearly that black and white, but it’s one that I hope readers think through as they get through the war below.

Jason Bordoff [00:34:44] I mean, just for some, you know, there are striking numbers in your book, like the average Boeing 747 has 135 miles of copper wiring. That’s a lot of copper. A lot of copper. And then you sort of go through everything else in there. What do you make of some of the I forget when this news was announced and approximate was maybe after you finished writing it, but in terms of how the politics and geopolitics of this playing out, you talk about Ford’s effort to build more domestic capacity for things like battery manufacturing, for some of the security resilience reasons that you talked about that this administration target, that politicians on both sides of the aisle talked about, They’re doing that in partnership with a Chinese company that has some of the technology and then and just announced that they were putting that on hold. And there are a lot of political and geopolitical challenges trying to move move this forward. Yeah.

Ernest Scheyder [00:35:38] What I found really interesting about the four Seattle, that tie up, which is now been iced, as you said, was the immediate reaction from the mining industry. I inir that the company that we were discussing earlier that that’s dealing with this rare flower issue was very, very concerned when Ford announced the Seattle deal and immediately contacted Seattle excuse me, immediately contacted Ford to sort of ask through how its lithium was planned to be used, because one of the key push, one of the key approaches by iron ore is making sure that its lithium is used to mystically. And so that was a key approach by Executive Chairman James Calloway, who we feature in the book, as well as other executives in the company. And so Ford said that, no, indeed, it’s going to be used domestically. And and for me, that, you know, who knows where the Ford Seattle saga will go. Right? I mean, we can be having this conversation in ten months and we could still be on ice or could, you know, be canceled or it could be, you know, shovels in the ground. I mean, for me, what was more interesting there is around this broader question of minerals independence, or at least reducing foreign dependance. And if we are going to truly be mineral, produce more of our own metals and minerals, are we comfortable if we export more of those, those sort of completely undo everything that we’ve been talking about in terms of, you know, reducing transportation emissions, among other things? And I think you’re starting to see a lot more miners sell themselves to the American public as ways to domestically produce copper, lithium, nickel, etc.. And so if you start to export those or even sell them to a company that might be considered less than friendly with the United States, I think you’re going to see a huge backlash and you’re starting to see a lot of companies realize that. And I think that’s encapsulated in the Ford Seattle situation.

Jason Bordoff [00:37:30] Can you talk a little bit about how people understand what we’re finding and processing? Is we you talk in the book about the challenges with mining, and it can have environmental impacts that can harm endangered wildflowers. A lot of the issue with diversification of the supply chains globally is about the refining and processing Is that much easier problem to solve just to build manufacturing plants? Or does that pose many of the same challenges that expanding mining does?

Ernest Scheyder [00:37:58] So I would say that it poses different challenges and it requires more expansion. Sieve view of what we’re finding is like I think, Jason, when you and I talk about refining and we may just sort of given our background to be thinking of like an oil refinery, you’re used to, you know, you take the liquid out of the ground, you can put it in a pipe sent to a facility. You get your kerosene or your jet fuel or your gasoline or your other petroleum based products. And then you, you know, off you go. With the transition refining looks different for each metal and mineral for lithium, you’ve got to turn it into the several sort of steps after you take it out of the ground. But the sort of end product will be via a series of refining steps, what’s called the lithium carbonate or lithium hydroxide. And different manufacturers have different desires. Lithium hydroxide is good for longer range batteries, but you’ve got to use it right away. So you have to think about having a refining and processing facility sort of near your end. Customer. Lithium carbonate can be stored longer, but it’s sort of less bang for your buck. To use a technical term, copper is more well known, but you tend to use an electrolysis process to to produce it. Nickel refining is has many different steps than lithium refining, for instance, and as does cobalt. So each is a little bit different. And so there’s not sort of like a central facility where you can just send rock to and then expect different forms of metal to come out the other end. And then in reverse processing. We talked to him minutes ago about the mountain pass. Trouble is trying to get where is refining back up and running in California. And that’s just an entirely crazy process. Not to geek out too much, but I mentioned rare earths are 17 or 18 groupings of metals and minerals and you have to extract them each in that order as they appear on the periodic table. So there is one rare earth called cerium, which is wildly popular in the Earth’s crust. There’s just tons of it, but it’s just not a huge market for it. So in order to get to neodymium, which is extremely in high demand right now, you’ve got to take out the cerium first. So imagine spending a lot of money on a big facility that takes out a huge chunk of a product that you can’t even use, or if you can sell it, you’re selling it for a very, very low price just to get to the more value of one. And if you do that for each town, you take out of the ground and you just sort of do the math in your head and you can see the economics can be kind of really, really, really, really jarring right there. And and China has been willing to our conversation really about China. China’s been willing to operate at a loss or use its market power or to screw with global prices in a way that advantages its own domestic manufacturers in a way that U.S. and Western companies have not or cannot do. And so that has really affected the supply chains here. And I’ll get back to the refining.

Jason Bordoff [00:40:49] So what does that mean for the role of policy if you were, I don’t know, in in a policymaking role or making policy recommendations, you can do my job for me for a bit, you know, Do you think markets work? And if world needs more minerals, the markets will will reflect that prices will go out, more capital will come in in response. Yes, we need to figure out how to engage with communities and have the right environmental regulations and permitting. But but beyond that, what what would what do you think you would want to see based on your book reporting from the federal government or partners of the federal government in other countries?

Ernest Scheyder [00:41:25] Yeah. One of the things I was really intrigued by, as I pointed out more of the book was that the mostly the Pentagon, but other parts of the government had doled out grants to various parts of the supply chain. You know, I mentioned Perpetual in Idaho. The Pentagon has supported the Mountain Pass project in California. Those are just two examples of many mentioned that, of course, iron ore on tap for this large US Department of Energy loan. And and this is financial incentives. But what a lot of miners, especially junior miners say, is they would love to have guaranteed purchases. So they would love to have the Pentagon, for instance, if the Pentagon wants F-35 fighter jets that require rare earths, you can’t have it F-35 fighter jet without rare earths. Well, a lot of rare earths companies are saying, you know, I’d love to get my project off the ground, but in order to do that, I’ve got to go to a bank and ask for, in some cases, a billion, $2 billion or an associate a consortium of banks. That’s really hard to do given how volatile the market has been over the past 10 or 20 years. So they’re saying we would love to have the Pentagon say we are going to buy X percent of your rare earths when you come online. And so the US government and many Western governments, many governments in general would struggle to set prices for rare earths. But industry is saying, you know, we would love to have a guaranteed buyer. Buy American is sort of the term that’s bandied around a lot. And so, so far we’ve seen more financial support, whether that’s loans or grants for a lot of these projects. I’m curious to see if we start to see more Buy American and how that could or would take off and if that would have an impact on the financials of. The industry, because you’re right, you’re not going to be able to control the price. And China could flood the market or, you know, screw with the market to benefit its own manufacturing industry again. China’s threatened as recently as a few years ago to to block exports to the United States. So if the government were to go to a junior project and say, hey, we’ll buy X percent of your production, would that lift the industry? I’d be curious to explore that and see what could come of it.

Jason Bordoff [00:43:28] I mean, I take it the IRA, it was aimed at doing a bit of that by linking tax credits to, Yes, deduction at home or an FDA country is again, I think in the epilog you note, you know, Bolivia’s like, well, we’re not an FDA country, so I guess that doesn’t work for us. We’ll go somewhere else.

Ernest Scheyder [00:43:41] Bolivia We haven’t a chance to talk about it too much, but sitting on the world’s largest lithium resource and not an FDA country. And so it is been very open to talking to Russian President Vladimir Putin or Chinese President Xi Jinping and and ultimately did decide to partner with a Chinese company, Seattle, to produce its lithium there. We’ll see where that goes.

Jason Bordoff [00:44:03] Yeah, sort of. It was a good example in the book showing how geopolitics plays into a lot of these decisions. You know, this conversation and I guess a lot of the book, too, like many of these conversations, has focused on the question of where we’re going to get all these metals from, where we’re going to do all this mining, and are there tradeoffs with what it does to landscapes or the ecosystem? I wrote a piece recently that tried to suggest, yes, we absolutely need to do more mining, but but maybe if we’re smart about it, not quite as much as we think we do because of innovations in technology and battery chemistry, the kind of electrolytes we use, substitutes, recycling. I’m curious if you, in your research, looked at the demand side of this problem and whether it made you more or less optimistic that that could be a big part of this, that addressing the clean energy transition needs?

Ernest Scheyder [00:44:52] So recycling does form a huge part of the narrative here. And I look at JB Straubel at Redwood and Aja at Life Cycle and and looked at sort of the business models, especially looking at life cycle and fascinated by their hub and spoke network, which is they’re taking across North America and now they’re expanding into Europe and looking at Asia. And so I definitely see recycling as growing to be the dominant producer of these metals and minerals in about 20 to 25 years. I mean, I hesitate to even, you know, sort of prognosticate that that sort of widest range. I think it’s anyone’s guess when we get to what’s called a truly circular economy, the idea that you take your old iPhone or your old electric vehicle or your old, you know, leaf blower from your backyard and you recycle the battery inside to reuse the metals and minerals. You can redo that over and over again. You can’t do that with gasoline for for obvious reasons. I so I do see recycling getting there. One of the executives that I quote in the book runs a major lithium company, Alcan, and he admitted that they’ve got about a 20 or 25 year shelf life on digging holes in the ground. I’m sort of being euphemistic here, but his point was that we’re going to get to that point where we’ve reached critical mass in terms of the amount of lithium that we need sort of as a world. And so we’re going to get to a point where we’re going to need fewer mines and we’re going to need more recycling facilities. And I don’t think we’ve hit that inflection point yet, but we will. And as we start to see more developments in battery recycling and we start to see more facilities just be built around the world, then I think we’re going to start to see fewer mines and more recycling facilities. But it’s going to take time to get there. One of the other technologies that I explore in the book is called Direct Lithium Extraction, and it’s the idea of taking lithium from brine. You can make a brine being salty. Water deposits are found in Chile and Argentina, in Bolivia, parts of the United States. And you basically filter out the lithium using a process that is, you know, sort of like a household water softener. It’s a little more complex than that, but that’s sort of the rough, rough idea. And a lot of companies have tried to make this work. No one has succeeded at commercial scale of just using drunk lithium extraction independently. And so the race is on who will be first. And the promise there is if you can make this work, then you don’t need a hole in the ground. Then if you live just outside Charlotte, you don’t have to watch your pastoral farmland be dug up. And if you love that rare flower, do you need to have that rare flower disappear in order to produce lithium? And so that’s the tantalizing hope and the tantalizing prospect there. We’ll start to see we’ll see where direct lithium extraction goes. I think within the next few years, we’ll really start to see a lot of big companies go commercial. We mentioned Bolivia because certainly the large geological deposits that’s there right now in brine. But I just found a sort of a fascinating case study because a lot of companies have tried and failed the past 20 or 30 years to operate in Bolivia and. A lithium sector there. And we’ve got this new upstart from this company called Energy X, which is which has tried and did not succeed there to use direct lithium extraction. Kto ended up winning the prize, China’s Kato. And so we’ll see where that goes. But it’s a fascinating space. General Motors, BMW, others have made their bets on direct lithium extraction, and it’ll be one to chronicle in the next few years. I’m excited for.

Jason Bordoff [00:48:31] This conversation, maybe appropriately for MIT, for for me. And my podcast has been kind of wonky talking about policy and geopolitics and technology. What makes the book so fun to read is stories about people and communities. And I just wanted to give you a chance to I don’t know if you had a favorite or a most colorful or share one of the characters you loved meeting and telling the story about the most for people listening. Sure. So I think.

Ernest Scheyder [00:48:59] I think your readers might be familiar or have heard of the Thacker Past Lithium project in northern Nevada. It’s it’s being developed by a company called Lithium Americas. And it’s a it’s been a fascinating company and a fascinating project to cover. I’ve been reporting on it, gosh, 5 or 6 years now. And it’s one of the largest deposits in the world, really, I think certainly the largest in North America. And it’s in the middle of nowhere. It’s on the Oregon border with Nevada. It’s surrounded by a lot of ranching communities. It also is near some indigenous historical sites. And the opposition that’s really grown up around this project centers on a group of folks that call themselves D industrialists. And so what sort of a common rejoinder when we talk about energy topics, Jason, you or I like, I’m sure you get this all the time. It’s like, oh, well, are you going to give up your lights or your phone or your, you know, your penicillin or, you know, the clothes on your back. And these people say, yes, yes, we will. And I got to spend a day and then I camped out at the site I’m with with an activist, Max Wilbur, who has written a book advocating strongly for deindustrialization. And it was just a great opportunity as an author to spend time with him. I’ve interviewed him many times on the phone, but had never actually sort of met in person and got a chance to really walk around the entire site, see it through his eyes, get to understand how and why he came to his beliefs and just find out who he was as a person, what made him tick. And I did that for one or more people in each chapter. But really, it was just fascinating to spend time with with Max Wilbur for the chapter on the Thacker Pass Lithium project, because so many people, I think, sort of rejoinder is, oh, well, you’ll just you just give it up. You know what? You’re going to give up now. Sort of a sort of a common trope or talking point. But he actually saying, yes, yes.

Jason Bordoff [00:50:50] Well, I do recall he cooked you dinner of a gas powered stove. You put that detail in the book.

Ernest Scheyder [00:50:55] He cooked himself dinner. I made my I had a sandwich stuffed in my bag that I needed to make. But I but I did make a point to include that his store was powered by natural gas, but his car was 25 years old. He used a dated MacBook and a dated iPhone. And when I sort of asked him, okay, well, why are you using these devices? His rejoinder was, you know, you need to use the tools at your disposal and agree with it or disagree with it. It was sort of a fascinating way to look at the issue through his eyes. Also, he had, I don’t think supplant is the right word, but but he has sort of eclipsed the issues around the Native American historical sites there and sort of really became sort of the lightning rod or the focal point of the opposition to this project. And I think some folks, especially those with strong views on protecting indigenous sites, might have views on that. And so we explore his views on that. Also, interestingly, he has views on transgender issues that that threaten to derail his entire opposition to this lithium project in a way that was mind boggling to me and fascinating as a researcher and as a reporter to talk to him, to talk through with him, his views on this. And so I did not have that on my bingo card. Jason, I’m telling you, when I when I started reporting this out, but he was just a fascinating person to talk to. And he’s still out there fighting this project, still filing lawsuits. But the mine is under construction right now as we speak, Bill. Dozers out there putting yellow iron in the ground. So we’ll see where it goes.

Jason Bordoff [00:52:29] Well, I hope the I mean, it’s wonderfully written and, you know, a lot of really remarkable places you got to visit as part of telling the story. And I know I have an advance copy. Maybe there will be photos in the the one that people can buy in the store, because I’d love to see some of what you saw because it sounds like a really fascinating few years researching for this book. So thanks for doing it. Thanks for sharing it with all of us and look forward to learning more and in future reporting. Thanks and congrats on the book, Ernie.

Ernest Scheyder [00:53:01] Thanks for your time, Jason. Thanks to the audience and excited to share the Warbelow with everyone. And it’s available for preorder now and will be out in January.

Jason Bordoff [00:53:08] The war below Lithium, Copper and the Global Battle to Power Our Lives. By Ernest Scheider. Thanks again, Ernie, for being with us.

Ernest Scheyder [00:53:16] Thanks, Jason.

Jason Bordoff [00:53:21] Thank you again, Ernie Scheider. And thank you for listening to this week’s episode of Columbia Energy Exchange. The show is brought to you by the Center on Global Energy Policy at Columbia School of International and Public Affairs. The show is hosted by me, Jason Bordoff and by Bill Loveless. The show is produced by Aaron Hartig from Latitude Studios. Additional support from Lily Lee, Tom Moran, Kevin Brunelli, Caroline Pittman, Daniel Prop, Natalie Volk and Keith Lee. Roy Campanella engineered the show. For more information about the podcast or the Center on Global Energy Policy, please visit us online at Energy Policy, columbia.edu or follow us on social media at Columbia U. Energy. And please, if you feel inclined, give us a rating on Apple Podcasts. It really helps us out. Thanks again for listening. We’ll see you next week.

The energy transition requires a lot of minerals. Lithium, copper, cobalt, nickel, and other materials that are collectively known as “critical minerals” are vital components of most clean energy technologies. According to the International Energy Agency, getting on track for net zero will mean a sixfold increase in the demand for these materials by 2040.

But mineral production has a mixed history. Without proper protections, mining can have negative impacts on environmental health, labor practices, and Indigenous communities. Therefore, the prospects for a just energy transition will depend both on meeting future demand for critical minerals, and on doing so in a just and sustainable way.

What does the next decade hold for the mining industry? What challenges will critical minerals pose for energy and geopolitics? And what can be done today to overcome these challenges?

This week, host Jason Bordoff talks with Ernest Scheyder about critical mineral supply.

Ernest is a senior correspondent for Reuters covering the green energy transition and critical minerals. He is also the author of the forthcoming book, The War Below: Lithium, Copper, and the Global Battle to Power Our Lives. The War Below details the complex choices facing our world as the energy transition accelerates. Ernie has previously covered the American shale oil revolution, politics, and the environment.

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