The COVID-19 crisis is slowing down U.S. efforts to produce lithium, rare earth along with other materials that are utilized in electric vehicles and high-tech equipment, dealing a blow to the plans of President Donald Trump to curb Chinese control of the strategic minerals sector.
“We can just hit pause”
As the pandemic has resulted in the death of nearly 20,000 people across the globe, junior miners in the U.S. have slowed engineering work, environmental reviews and loan applications.“We can just hit pause,” said Keith Phillips, chief executive of North Carolina’s Piedmont Lithium Ltd.
Piedmont, Lithium Americas Corp and ioneer Ltd, both of them are working on the Nevada projects. They expressed that they now encounter engineering or regulatory setbacks that could push back mine construction.
The majority of the companies aimed at U.S. strategic minerals have large cash reserves after last stock and bond offerings. While none of them have yet reported an employee testing positive, the virus has nevertheless fueled a bunker mentality among some executives.
“Coronavirus could cause a year or two delays on projects,” said Seth Goldstein, a minerals analyst at Morningstar. “That helps China right now.”
The pandemic is just the latest headache for the lithium industry, with prices for white metal down 37 percent in the past year due to oversupply concerns, according to data from Benchmark Minerals Intelligence.
Using the Defense Production Act
“The economic fallout from the outbreak will stunt the development of new projects,” said Benchmark’s Andrew Miller.
As the U.S. government shifts its focus to the coronavirus, projects including rare earth are also left waiting. The Pentagon last year stated that it would fund mines utilizing the Defense Production Act, which provides the military-wide berth to attain certain equipment. Recently, Trump has considered using the same law to bolster medical supply manufacturing.
However, now the U.S. rare earths developers are concerned that the virus could delay any Pentagon decision indefinitely. MP Materials, which runs the only U.S. rare earths mine, persists to be operational, though it is reliant on China for final processing.
“As untimely as COVID-19 is, it’s on point with what we’ve been saying: North American independence is needed now,” said Pat Ryan, chairman of UCore Rare Metals Inc, which is working on an Alaska rare earths mine.
Medallion Resources Ltd, as well as privately held USA Rare Earth and Texas Mineral Resources Corp, are also waiting on the Pentagon.
“We can’t lose sight of all the other things that we need to do at this very busy time for our country,” stated Paul Kern, who is a retired U.S. Army general and USA Rare Earth board member.
Hi, I’m Shubham. If you find my news coverage informative, please don’t hesitate to drop a good word in my inbox. Being a journalist, I like to cover major reportings across the globe and present the news in a crisp and factual manner. Feel free to contact me at [email protected]