Biden Administration Takes Action To Secure Critical Rare Earth Minerals

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We’ve written many times about the need for the U.S. to secure a reliable supply of rare earth minerals. Unfortunately, shortages and supply chain issues have plagued the industry and ultimately contributed to the slow growth of electric vehicle (E.V.) adoption. Fortunately, the Biden Administration is invoking a Cold War-era defense law to step up the production of critical rare earth minerals like the lithium and cobalt needed to produce E.V. batteries.

“The President will issue a directive, authorizing the use of the Defense Production Act to secure American production of critical materials to bolster our clean energy economy by reducing our reliance on China and other countries for the minerals and materials that will power our clean energy future,” the White House said in a statement.

The Defense Production Act (DPA) permits the president to use loans, direct purchases, and other government-backed business investments to incentivize certain goods and materials production. President Biden previously used the DPA to boost medical equipment manufacturing in response to the Covid 19 pandemic. Using the DPA to secure minerals for E.V. batteries essentially declares that relying on rival nations for these supplies constitutes a national security threat. Former President Donald Trump also invoked the DPA to build up a stockpile of rare earth minerals.

Invoking the DPA to produce these critical minerals here at home will help to hasten American energy independence. It makes sense for our economy and energy security not to rely on less-than-friendly nations to provide these materials. 

Many lawmakers and mining industry groups signaled support for the move. Industry executives say the decision shows that the president is taking the mineral shortage seriously and are eager for more details. 

“We’re looking forward to seeing the specifics of the president’s announcement, but the Biden administration should be commended for their efforts to secure the production of critical minerals like lithium here at home,” says Lithium Americas, a resource company focused on lithium development.

We agree. Producing critical rare earth minerals at home is a no-brainer. We applaud the Biden Administration for taking aggressive action to secure the supplies to ensure our energy transition stays on track while protecting American energy security. Doing anything else would leave us at the mercy of Russia and China.