Biden could invoke Defense Production Act for critical minerals as soon as this week

This would add critical minerals such as lithium, nickel, graphite, cobalt and manganese to the list of items covered by the Defense Production Act of 1950, a law enacted in the middle of the Korean War that allows the president to use emergency authority to place large orders of a certain type of product or increase production capacity and supply.

The White House will work closely with the Departments of Energy and the Interior to implement the presidential decision under the Defense Production Act, the source said, adding that a presidential decision signed by Biden would not “in any way” circumvent or override environmental clearance or review. processes for extracting these ores.

The source also said the actions being considered are not outright loans or purchases of critical minerals; instead, they would fund feasibility studies, the production of co-products and by-products in current operations, and productivity and safety upgrades.

Biden and his predecessor Donald Trump invoked the Defense Production Act during the Covid-19 crisis. A move by Biden to use that authority for domestic production of critical minerals would come as Russia’s war on Ukraine and resulting energy shocks have impacted nickel supply chains – and have caused a spike in nickel prices.
The Intercept first reported that the Biden administration was considering using the law to increase production of critical minerals. Bloomberg first reported that the action could take place as early as this week.
Earlier this month, Democratic Sen. Joe Manchin of West Virginia and Republican sensitivities Lisa Murkowski of Alaska, Jim Risch of Idaho and Bill Cassidy of Louisiana wrote a letter to Biden, asking him to invoke the Defense Production Act to produce and process reviews at the national level. minerals such as lithium and graphite.

“China is not only a world leader in the manufacture of lithium-ion batteries, but also in the processing of minerals and raw materials needed to manufacture lithium-ion batteries,” the senators said. “Our dependence on cobalt and lithium of foreign origin is high because the processing of both is dominated by China.”

Manchin also recently raised concerns about reliance on Chinese-dominated foreign supply chains to manufacture batteries for electric vehicles. The West Virginia senator is Democrats’ key vote for a climate and economic package, and recently began talks with the White House on a new package, he told CNN.

This story has been updated to note that the Intercept reported for the first time that the Biden administration is considering using the Defense Production Act for this purpose.


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