US President Joe Biden delivered a speech after visiting the Ford Rouge Electric Vehicle Center in Dearborn, Michigan, USA on May 18, 2021. REUTERS/Leah Millis/File Photo

Reuters, May 25-US President Joe Biden will rely on allies to provide most of the metals needed to make electric cars and focus on processing them into battery parts domestically as part of a strategy aimed at appeasing environmentalists , Two government officials and people directly familiar with the matter told Reuters.

These plans will deal a blow to American miners, who hope that Biden will rely mainly on domestically sourced metals, as suggested by his campaign last fall, to help realize his ambitions to achieve a low-carbon economy.

According to people familiar with the matter, Biden’s team is not focused on allowing more US mines, but on creating jobs and processing domestic minerals into electric vehicle (EV) battery components.

Such a plan will help reduce America’s dependence on the industry leader, China, for electric vehicle materials. It will also attract labor unions to work in manufacturing and theoretically reduce unemployment caused by the pandemic.

The US Department of Commerce is organizing a meeting in June to attract more electric car manufacturers into the country. Biden's proposed $1.7 trillion infrastructure plan allocates $174 billion to promote the domestic electric vehicle market through incentives such as tax credits and grants from battery manufacturers. The department declined to comment.

"It is not difficult to dig a hole," one of the sources said. "The difficulty is to take these things out and send them to processing facilities. This is what the US government is concerned about."

The two said that according to this method, the United States will rely on countries such as Canada, Australia and Brazil to produce most of the key raw materials it needs, while competing for higher-value jobs to convert these minerals into computer chips and batteries. source.

One of the sources said that protecting the complete supply chain from metals to batteries does not require the United States to become a major producer of raw materials.

After national security and economic development officials participate in a one-year supply chain review, a complete strategy will be finalized.

Sources from environmentalists and even some Democrats said that Biden officials want to ensure that the government's desire for electric vehicles will not be threatened by obstacles facing domestic mines.

"When I hear everyone use this as a defense argument, it sounds hollow. We have to build new mines to have a greener economy," said U.S. Representative Betty McCollum. L) Proposed Minnesota’s Twin Metals copper mine.

White House Deputy National Climate Adviser Ali Zaidi said: “President Biden is focused on seizing the electric vehicle (EV) market, purchasing and manufacturing supply chains in the United States, and creating high-paying union jobs.”

"Making U.S.-made electric vehicles and shipping them around the world will include using U.S.-made parts and resources. This includes responsibly seeking, developing, and mining key minerals and materials for electric vehicle batteries."

Zaidi also stated that the government has invested in a strategy that includes recycling in the supply chain.

Although U.S. projects from large and small miners will be affected, the pain of any blocked project will fall disproportionately on small companies focused on the United States. Many large miners also have global projects that can benefit from government programs.

Mckinsey Lyon of Perpetua Resources Corp (PPTA.TO) said: “We can no longer push the production of the products we want to places we can’t see and people we’ll never meet,” the company is trying to develop Idaho State’s Stibnite mine produces gold and antimony used in the manufacture of battery alloys for electric vehicles.

In April, the US government became the largest shareholder of TechMet, a mining investment company that controls a Brazilian nickel project, a Rwanda tungsten mine, and is a major investor in a Canadian battery recycling company.

Washington also funds research on the Canadian Cobalt Project and the Malawi Rare Earth Project, as well as other international investments.

The State Department’s Energy Resource Governance Program (ERGI) is one of Washington’s main plans to help allies discover and develop lithium, cobalt, and other electric vehicle metals.

To be sure, Washington has not neglected the domestic mining industry.

The US Department of Energy has allocated funds to help old coal mines find ways to produce rare earths. US officials also funded MP Materials Corp (MP.N), which owns the country’s only rare earth mine, but it relies on Chinese processors.

But according to a government source, most of Biden's actions are aimed at avoiding fights with environmentalists and saving money for other fights.

During his visit to the Ford Motor Company (FN) plant in Michigan on May 18, Biden called on the government to provide funding for new electric vehicle battery facilities. He mentioned Australia’s lithium reserves during the tour, but did not mention the large US supply of key battery minerals. read more

Republicans said that if there are no more American mines, Biden's electric car plan will not be realized.

"These extremists who are'not in my backyard' made it clear that they want to block our land and prevent mineral mining," Colorado Republican Representative Lauren Bobert said at the House Natural Resources Committee forum held on the same day as goodbye. Visit of Michigan.

Biden’s approach is accompanied by risks, including angering political supporters in the labor movement, who want the government to be open to resource extraction and the work that comes with it.

"Let's let Americans extract these minerals from the earth," said Aaron Butler of the Union Association's Local 469 Union, which did work on Rio Tinto's (RIO.AX) resolution copper mine project in Arizona. Support Biden in the election. "These are high-paying jobs."

Many skills used by unions to build mines, including concrete and electrical work, can also be used to build metal processing plants for electric vehicles.

The National Mining Association, an industry trade organization, has been lobbying the White House and Congress to support domestic projects, arguing that the coronavirus pandemic demonstrates the importance of localized supply chains.

According to two well-informed organized labor sources, Biden’s White House is now quietly seeking labor support as it tries to establish a case before the 2022 midterm elections to prove that its green policy is creating jobs, which may determine Does the strategy win the support of Congress? Campaign

Labor sources said that Biden officials have contacted labor unions across the country and asked the government to provide specific employment promotion projects.

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