Epidemic slows US move to extract EV minerals against China

The coronavirus pandemic is hampering US efforts to manufacture lithium, rare earth and other materials for electric vehicles and high-tech devices, and is a blow to President Donald Trump’s plan to curb Chinese control over the strategic mineral sector.

With the pandemic killing nearly 20,000 people worldwide, U.S. talent has slowed engineering, environmental reviews, and loan applications.

“We can just take a break,” said Keith Phillips, CEO of North Carolina’s Piedmont Lithium.

Piedmont, Lithium Americas Corp. and ioneer Ltd., both of which have projects in Nevada, have stated that they are now facing technical or regulatory setbacks that could reduce mining.

Most companies that focus on strategic minerals in the United States have large cash reserves after the latest stock and bond offerings. Although no employee has reported a positive test, the virus has triggered a bunker mentality in some executives.

“Coronavirus can delay projects by a year or two,” said Seth Goldstein, mineral analyst at Morningstar. “That helps China now.”

The pandemic is just the most recent problem for the lithium industry. Benchmark Minerals Intelligence data said white metal prices fell 37 percent last year due to concerns about oversupply.

“The economic impact of the outbreak will slow the development of new projects,” said Benchmark’s Andrew Miller.

As the U.S. government focuses on the corona virus, rare earth projects are also waiting.

The Pentagon announced last year that it would fund mines with the Defense Production Act, which gives the military a wide berth to purchase certain equipment. Trump recently considered applying the same law to promote the manufacture of medical devices.

But now rare earth developers in the US fear that the virus could delay any Pentagon decision indefinitely. MP Materials, which operates the only US rare earth mine, remains in operation, but relies on China for final processing.

“As early as COVID-19 is, it is in line with what we said: North America’s independence is now needed,” said Pat Ryan, chairman of UCore Rare Metals Inc., which is developing a rare earth mine in Alaska.

Medallion Resources and the privately held USA Rare Earth and Texas Mineral Resources Corp. are also waiting for the Pentagon.

“We can’t lose sight of all the other things we have to do for our country in this very busy time,” said Paul Kern, a retired US Army general and Rare Earth board member.

Megan Thompson

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