The transition to sustainability may rely heavily on critical minerals like lithium, cobalt, and platinum. Innovative sourcing and implementation of these materials are crucial for overcoming the challenges in this shift. Governments, academics, industry, and investors must reimagine the entire innovation ecosystem for material discovery, mirroring how barriers were lowered during COVID-19 to rapidly develop vaccines–as stated by critical mineral experts in Science Magazine.¹ The involved parties need to facilitate analysis of the urgency of each problem area to effectively prioritize solutions and allocate resources accordingly. This foundation will support interdisciplinary research and development, funding, commercialization, and manufacturing of critical mineral solutions. Applying this model to clean energy materials would bolster the development of renewable energy technology and decarbonization of other sectors like cement production, steelmaking, and the built environment. This writing provides an emerging market update on critical mineral developments by governments, investors, and industry. Please see our previous writings to learn about the basics of critical minerals, current industry issues, and emerging technological and academic solutions.
Governments have been actively engaging in efforts to address the critical minerals challenge. As of April 2024, the U.S. Department of Energy (DOE) has invested $75 million in the Critical Materials Supply Chain Research Facility.² This initiative, an offshoot of the Bipartisan Infrastructure Law, aims to bolster domestic supply chains, reduce dependence on foreign sources, and ensure resilience in the face of growing demand for critical minerals.² The facility will collaborate with multiple national laboratories and support existing government efforts, focusing on supply chain diversification, efficiency, and enabling a circular economy.²
In recent months, several foreign governments have also launched significant initiatives. The European Union, for instance, unveiled its Critical Raw Materials Act in February 2024, which aims to streamline the permitting process for mining projects, promote recycling of critical minerals, and establish strategic partnerships with resource-rich countries.3 Additionally, as of March 2024, Canada has committed 3 billion CAD towards its Dec 2022 Critical Minerals Strategy.4 The strategy focuses on the development of a sustainable and competitive mining sector, including investments in research and development, infrastructure, and Indigenous partnerships.4 Also, the Australian Government, as part of its 2024-25 Budget, announced substantial investments to strengthen critical minerals processing under the Future Made in Australia Investment Framework.5 This includes $566.1 million for Geoscience Australia to map natural resources, $7 billion in tax incentives for critical minerals processing, and $10.2 million for the Critical Minerals National Productivity Initiative to establish common user processing facilities.5
Industry is also making substantial strides in the critical minerals sector. In May 2023, Tesla announced groundbreaking of a new lithium refining facility in Texas, aiming to produce enough lithium for 1 million electric vehicles annually by the end of 2024 or early 2025.6 Similarly, BHP, a leading global mining company, has invested $500 million in expanding its nickel production capacity in Western Australia to meet the growing demand from the electric vehicle (EV) market.7 However, due to the recent slump in critical mineral prices, BHP announced that they will decide by August 2024 how they will proceed with construction after recent labor cuts7 Rio Tinto, another major player, has partnered with the Canadian government to develop a scandium oxide production facility, set to be operational by late 2024, which will support advanced manufacturing and aerospace industries.8 Redwood Materials, founded by former Tesla co-founder JB Straubel, has partnered with Ultium Cells, a joint venture between General Motors and LG Energy Solution, to recycle production scrap from their battery manufacturing facilities in Ohio and Tennessee. This initiative supports the growing need for recycled and domestically produced critical battery materials, aligning with other government incentives and expanding Redwood’s role in the EV battery recycling industry.9
Startups and venture capital are increasingly pivotal in driving innovation in critical minerals. Lilac Solutions closed its Series C funding round in February 2024, raising $145 million to support its ambitious growth plans, including ramping up manufacturing capacity and commercial deployment of its proprietary ion-exchange (IX) lithium extraction technology.10 This round, led by Mercuria, Lowercarbon Capital, and Breakthrough Energy Ventures, brings Lilac’s total capital raised to $315 million and includes new investor Mitsubishi Corporation.10 Climate tech focused VC Clean Energy Ventures, known to invest in critical minerals startups, has closed its newest fund of $305M as of May 29th, 2024.11 Clean Energy ventures previously invested in metal recycling and processing company Nth Cycle, who went on to raise a $44M Series B round and continues to show promising progress.12
The ongoing and upcoming initiatives by governments, industry leaders, startups, and investors highlight the dynamic landscape of the critical minerals market. These efforts are crucial in building a resilient supply chain, promoting sustainable practices, and accelerating the transition to a low-carbon economy. As the global demand for critical minerals continues to rise, coordinated actions across various sectors will be essential to address the challenges and seize the opportunities presented by this vital industry.
REFERENCES
(1) Mirkin, C. A.; Sargent, E. H.; Schrag, D. P. Energy Transition Needs New Materials. Science 2024, 384 (6697), 713–713. https://doi.org/10.1126/science.adq3799.
(2) DOE Invests $75 Million to Strengthen Nation’s Critical Minerals Supply Chain. Energy.gov. https://www.energy.gov/fecm/articles/doe-invests-75-million-strengthen-nations-critical-minerals-supply-chain
(3) European Critical Raw Materials Act – European Commission. https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/green-deal-industrial-plan/european-critical-raw-materials-act_en
(4) Canada, S. The Canadian Critical Minerals Strategy. https://www.canada.ca/en/campaign/critical-minerals-in-canada/canadian-critical-minerals-strategy.html
(5) Resources, D. of I. S. and. Investments to capitalise on Australia’s critical minerals and the global clean energy transition | Department of Industry Science and Resources. https://www.industry.gov.au/node/93513. https://www.industry.gov.au/news/investments-capitalise-australias-critical-minerals-and-global-clean-energy-transition
(6) Elon Musk and Tesla break ground on massive Texas lithium refinery | Reuters. https://www.reuters.com/business/autos-transportation/tesla-plans-produce-lithium-1-mln-vehicles-texas-refinery-elon-musk-2023-05-08/
(7) BHP cuts contractors at Australian nickel project amid price slump | Reuters. https://www.reuters.com/markets/commodities/bhp-lets-workers-go-australian-nickel-mine-amid-price-slump-2024-03-18/
(8) Rio Tinto partners with Government of Canada to decarbonise RTFT and boost critical minerals processing. https://www.riotinto.com/en/news/releases/2022/rio-tinto-partners-with-government-of-canada-to-decarbonise-rtft-and-boost-critical-minerals-processing
(9) Bellan, R. Redwood Materials is partnering with Ultium Cells to recycle GM’s EV battery scrap. TechCrunch. https://techcrunch.com/2024/05/23/redwood-materials-gm-ultium-battery-scrap/
(10) Lilac Solutions Announces $145 Million Series C to Scale Lithium Supply for the Electric Vehicle Era – Lilac Solutions. https://lilacsolutions.com/2024/02/lilac-solutions-announces-145-million-series-c-to-scale-lithium-supply-for-the-electric-vehicle-era/
(11) Ventures, C. E. Clean Energy Ventures Closes $305M Fund II Aiming to Mitigate 75 Gigatons of Emissions by 2050. Clean Energy Ventures. https://cleanenergyventures.com/clean-energy-venture-capital/clean-energy-ventures-closes-305m-fund-ii/
(12) Mining money: Startups Kobold, Nth Cycle score new venture rounds | GreenBiz. https://www.greenbiz.com/article/mining-money-startups-kobold-nth-cycle-score-new-venture-rounds