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Biden invokes Cold War powers to increase EV battery production

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Legislative invocation provides key funding for existing operations, productivity and safety improvements

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The Biden administration has announced it will invoke Cold War powers to boost domestic production of battery materials needed to power electric vehicles and the transition to renewable energy, a move intended to improve the competitiveness of United States in a market dominated by China.

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The ruling adds lithium, nickel, cobalt, graphite and manganese to a list of items covered by the Defense Production Act of 1950. It’s the same authority used by former Presidents Donald Trump to boost mask production during the pandemic and Harry Truman to make steel for the Korean War.

This could help mining companies access $750 million under the Title III Defense Production Act fund. A senior administration official said industries supported by high-capacity batteries, including transportation and the energy sectors, account for more than half of U.S. carbon emissions.

This decision also illustrates President Joe Biden’s walking a tightrope on this issue. On the one hand, climate change activists, environmentalists and indigenous groups oppose many mining projects because of the impact on water supplies and nearby communities. On the other hand, the United States would need a colossal increase in domestic mining projects to start supplying even a fraction of the metals and materials that will be needed to power the impending wave of electric vehicle production. .

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“The clean energy transition cannot be built on dirty mining,” said Lauren Pagel, director of policy at environmental group Earthworks, in a statement. “Earthworks strongly opposes the use of the Defense Production Act to bolster mining, as it adds to the generational trauma suffered by communities impacted by mining, especially Indigenous communities. »

Invoking the law provides essential funding for existing operations, productivity and safety improvements, and feasibility studies, but it won’t give the mining industry the tool it craves: an expedited process to extract ground ore. Mining industry groups say it takes seven to 10 years to commission a mine in the United States, compared to about two to three years in neighboring Canada, according to the National Mining Association.

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Meanwhile, the Senate Energy Committee, whose chairman is West Virginia Democrat Joe Manchin, convened a hearing Thursday on the production of critical materials nationwide.

Manchin reiterated his view that dependence on foreign countries for materials needed for electric vehicles is a reason he wants to give equal treatment to boosting hydrogen vehicles. He also suggested using the Defense Production Act to expedite final approval for a gas pipeline from West Virginia to Virginia.

Manchin and Republican Alaska Senator Lisa Murkowski both supported using the law to spur the production of such documents during interviews with reporters on Capitol Hill this week.

Lithium Americas Corp., which runs a project in Nevada, rose 4.5% on Thursday, while shares of MP Materials Corp., the only U.S. company that produces rare earth metals needed for electric vehicles, rose 4.5% on Thursday. 3.4% in New York trading.


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