Active Coal Mines Could Facilitate Green-Energy Revolution

As the use of renewable energy grows, the demand for critical minerals continues to increase. Minerals such as nickel, lithium, copper and cobalt, among other rare earth elements, are crucial for renewable energy installations and storage solutions.

The production of these minerals is limited as current supply chains are already struggling with demand. As a result, prices of these minerals are soaring. This highlights a significant economic opportunity to create new supply chains for these minerals.

America is geologically rich in various critical minerals and is now working to build its own domestic supply chains to help meet its own renewable energy needs. Since 2020, the U.S. defense department has allocated more than $349 million to create domestic critical element supply chains. The energy department has also awarded billions to help kickstart America’s lithium industry.

In addition, America has been looking for supply chains for these minerals globally, increasing efforts to secure its own supply by turning to other countries, including Mexico, South Africa and Mongolia, for possible trade deals.

Investigators at the University of Utah have discovered that the coal industry may be needed for more cost efficient and quicker ore extraction of critical minerals. The investigators discovered higher concentrations of critical minerals in active mines on the Uintah coal belt of Utah and Colorado. They theorize that this would allow operational mines to extract critical minerals together with ore they’re already extracting.

Associate professor Lauren Birgenheier, the study coauthor, revealed that the critical minerals were concentrated in fine-grain shale units, which are both above and below the coal seams. She explained that if rocks were already being moved during mining, it would make it easier to extract the resources to power the energy transition.

Currently, China controls global critical-mineral supply chains. Data from the Oxford Institute of Energy Studies estimates Beijing alone makes up 70% of global critical-mineral extraction and 90% of critical-mineral ore processing. Additionally, China is the sole large-scale producer of rare earth elements in the world. The nation has spent decades expanding supply chains worldwide, extending its industrial and energy influence into emerging markets across Latin America, Africa and Asia.

Despite all the strides made by the United States, it is still years behind China, particularly with regard to diplomacy deals with countries rich in ore and industrial development. For instance, the U.S. has been finding it hard to enter the Latin America market, which is rich in lithium. This hasn’t been the case for China, which is currently expanding its hold in the market.

This potential spin of coal extraction suggested by the study could give coal companies such as Alliance Resource Partners L.P. (NASDAQ: ARLP) a new vertical to leverage.

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