WASHINGTON โ Since Donald Trumpโs return to the White House, his administration has shown a keen interest in securing critical minerals, a move that could have far-reaching implications for the green technology sector. Despite his history of skepticism towards climate action, Trumpโs focus on minerals crucial for green tech could inadvertently boost the USโs potential in this area.
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The Trump administrationโs interest in critical minerals is not new, but recent developments suggest a more pronounced focus. This shift comes amid growing global demand for minerals like cobalt, lithium, and nickel, which are essential for manufacturing green technologies such as electric vehicles and solar panels. The demand for these minerals is soaring, driven by the rapid growth of the clean energy sector.
Trumpโs Climate Stance
Since taking office, Trump has withdrawn the US from the Paris Climate Agreement and curtailed various climate initiatives. His administration has also reportedly prevented US scientists from participating in international climate research and removed national electric vehicle targets. Despite these actions, Trump has shown a growing interest in securing critical minerals, which are essential for both defense and green technology.
Critical Minerals and Green Tech
Critical minerals like cobalt, lithium, and nickel are crucial for manufacturing green technologies such as electric vehicles and solar panels. The demand for these minerals is soaring, driven by the rapid growth of the clean energy sector. According to the International Energy Agency, within two decades, these minerals will make up almost 90% of the demand for lithium, 70% of the demand for cobalt, and 40% of the demand for rare earths.
The Mineral Deal with Ukraine
Trump has been eager to strike a deal with Ukrainian President Volodymyr Zelensky on critical minerals. This move aligns with his broader interest in securing mineral supplies from nations rich in these resources, including Greenland and Canada. The deal could help the US reduce its dependence on China for critical minerals.
The Elon Musk Effect
Elon Muskโs companies, SpaceX and Tesla, rely heavily on critical minerals. Musk has previously expressed concerns about the availability and cost of these minerals, suggesting that Tesla might need to get directly involved in mining and refining. In 2022, Musk tweeted about the โinsane levelsโ of lithium prices, hinting at the need for direct involvement in mining operations.
US Position in the Global Race
A report by a US Government Select Committee in December 2023 highlighted the USโs vulnerability due to its dependence on China for critical minerals. China dominates the market, particularly in processing these minerals, which is crucial for their use in green technology. The report warned that failure to secure alternative supplies could cause โdefense production to grind to a halt and choke off manufacturing of other advanced technologies.โ
Expert Insights
- Elizabeth Holley, Colorado School of Mines: โDemand for critical minerals is booming, driven by the rapid growth in the clean energy and electric vehicle sectors.โ
- Bob Ward, LSE Grantham Research Institute: โChinaโs early recognition of the economic opportunities in green technology has given it a strategic advantage.โ
Potential Industry Shifts
- Increased Mining and Processing: Trumpโs focus on critical minerals could increase domestic mining and processing in the US.
- Support for Green Tech: Securing these minerals could provide a foundation for the growth of green technology industries in the US.
Potential Executive Order
There are whispers of an upcoming โCritical Minerals Executive Orderโ from the Trump administration, which could accelerate mining and processing in the US. This could include measures to fast-track permits and invest in processing plants.
Challenges Ahead
- Technical Complexity: Establishing new mines and processing facilities is a complex and time-consuming process, often taking a decade or more.
- Political Uncertainty: Trumpโs stance on climate action remains unclear, and his administrationโs future policies could impact the green tech sector.
Trumpโs focus on securing critical minerals could significantly affect the USโs green technology sector. While economic and defense considerations may drive his administrationโs intentions, the outcome could support the growth of green tech. As the US seeks to reduce its dependence on China for these crucial resources, the coming months will be critical in determining the long-term impact on both the economy and the environment.
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