The $1 trillion infrastructure package introduced by the Biden Administration will help boost the demand for aluminum, copper and steel as well as improve the domestic supply of critical minerals and battery metals. That package includes roughly $6 billion set aside for battery materials manufacturing and processing projects, with more than $100 million being issued for the development of a rare earth demonstration plant. The objective of the Biden Administration is to invest in domestic critical metals production.
Presently, about 80% of the rare earth metals used in the United States is imported from China. The $140 million awarded will build a rare earth facility that will show the commercial viability of a full-scale integrated rare earth metal extraction, separation and refining facility. The project will also offer environmental benefits through the use of feedstock obtained from mine waste and acid mine drainage, among other deleterious material. The infrastructure bill will also grant $100 million annually until 2024 to be used in the development, processing and recycling of critical minerals, with about 30% of this amount being allocated to recycling projects.
Under the legislation, electric cars have been allocated $7.5 billion, with President Joseph Biden recently signing an executive order ensuring that by 2030, half of new car sales in the country will be electric vehicles. The bill also plans to set aside $3 billion for battery manufacturing projects and battery materials processing.
However, many are concerned whether the U.S. has enough cobalt, nickel and lithium to make the batteries needed by electric vehicles. This is in part because the opening of new mines is challenging, given the arduous permitting process it involves. This federal impediment is why the legislation calls for performance metrics for approving critical metal mines to be introduced.
Another issue that may hinder new mines is environmental opposition to green metal mining projects. This opposition comes mainly because of the environmental effect and mine waste mining produces. Mining companies may have found a way to rectify this, however, with more companies re-examining their mine waste.
For instance, Rio Tinto has found that scandium, which is a critical mineral, occurs in titanium. The company plans to inject $6 million into the mineral’s processing, which will produce about three tons of scandium oxide annually; this would make up about 20% of the international market, all without having to mine for it.
The legislation also demands that the United States Geological Survey map and gather data for areas that contain mine waste to better the understanding of critical metal resources in previously mined areas.
The increased demand for industrial metals in the U.S. is likely to expand the market for mining companies that explore for and extract those needed metals, including First Energy Metals Ltd. (CSE: FE) (OTCQB: FEMFF).
NOTE TO INVESTORS: The latest news and updates relating to First Energy Metals Ltd. (CSE: FE) (OTCQB: FEMFF) are available in the company’s newsroom at https://ibn.fm/FEMFF
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