Defense Production Act Could Boost Domestic Production Of Critical Battery Minerals

The Defense Production Act (DPA) of 1950 allows the president to expedite and expand domestic production of critical materials needed for national defense. This act was used extensively during the Cold War and continued to be used during the War on Terror. President Trump has now invoked the DPA in response to the COVID-19 pandemic.

There are four minerals essential to modern batteries used in electric vehicles and in grid storage of renewable energy, and they are all produced overseas, mostly in China. They are lithium, cobalt, nickel and graphite. The United States is almost completely reliant on imports for these minerals.

The DPA could be used to jump-start a domestic battery supply chain for these minerals, and the United States Geological Survey (USGS) has been working on this for some time. The DPA could also be used to create incentives for companies to expand domestic production of these minerals.

• Lithium – Used in lithium-ion batteries, about two-thirds of the world’s lithium is produced in China, with most of the rest coming from Australia. There is some production in the United States, Chile and Argentina.
• Cobalt – Used in lithium-ion batteries, over 60% of the world’s cobalt is produced in the Congo, with most of the rest coming from China, Russia, Canada and Australia. There is no cobalt production in the United States.
• Nickel – Used in nickel-cadmium, nickel-metal-hydride and lithium-ion batteries, over 60% of the world’s nickel is produced in Russia, with most of the rest coming from Indonesia, Canada, Australia and China. The United States produces about 4% of the world’s nickel.
• Graphite – Used in lead-acid, nickel-cadmium, nickel-metal-hydride and lithium-ion batteries, about two-thirds of the world’s graphite is produced in China, with most of the rest coming from Brazil, Canada, Mexico and the United States. 

These minerals are not mined in the United States, but they are critical to the rapidly growing electric vehicle and renewable energy industries. The United States has very little production of these minerals, and what production there is, is not enough to meet current demand, much less future demand.

The DPA could be used to create incentives for companies to open new mines and expand existing mines in the United States. The DPA could also be used to create incentives for companies to process these minerals in the United States instead of shipping them overseas.

The USGS has been working on a program to identify and map deposits of these critical minerals, and the DPA could be used to expedite this program. The USGS has also been working on a program to develop new technologies to extract these minerals from lower grade ores. The DPA could be used to expedite this program as well.

The DPA could be a game changer for the battery minerals supply chain in the United States, and it is something that the USGS has been working on for some time.