The Infrastructure Investment and Jobs Act — Domestic Production of Critical Minerals

A critical component of the Biden Administration’s program to transition the country to a less carbon-intensive economy is access to “critical minerals” such as copper, lithium, nickel, cobalt and other rare earth elements used in items such as EV batteries and solar panels. To secure these necessary commodities, however, the US is heavily dependent on foreign sources.¹ Of the 35 mineral commodities deemed critical by the Department of the Interior, the United States was totally reliant on foreign sources for 13 in 2019.² For 31 of the 35s, which range from lithium used in EV batteries to tellurium used in solar cells, the US imports more than half its annual consumption.³ Production of rare earths, a subset of critical minerals, is dominated by China.⁴And it is precisely in the construction of those elements necessary for the energy transition that more of these minerals will be needed: a typical electric car requires six times the minerals of a conventional car, and an onshore wind plant requires nine times more mineral resources than a similarly sized gas-fired power plant. See “The Role of Critical Minerals in Clean Energy Transitions,” International Energy Agency, May 2021.

The Infrastructure Investment and Jobs Act (IIJA or Act), Title II—Supply Chains For Clean Energy Technologies attempts to increase domestic production of critical minerals and reduce the national security concerns associated with the US’s dependence on other countries by developing domestic supply chains. To do this, the Act provides funding and makes regulatory and policy changes.

The Act’s funding provisions are aimed at increasing domestic production. First, the bill codifies and funds a US Geological Survey (USGS) effort to compile critical mineral resource location data in the United States. Section 40201 provides $320 million to the USGS to enhance the Earth Mapping Resources Initiative (Earth MRI), a program of above- and below-ground mapping of mineral resources across the United States. In what could be characterized as a “mining lifecycle approach,” Section 40202 prioritizes the mapping of abandoned mine land and mine waste which could be potential sources of multiple critical minerals. The Earth MRI results will be publicly available.

Second, Section 40204 of the IIJA allocates a $140 million grant to build a Rare Earth Demonstration Facility to develop the commercial feasibility of extracting rare earth elements from acid mine drainage, mine waste, and “other deleterious material,” and to separate mixed rare earth oxides into pure oxides of each rare earth element.

Equally important, the IIJA tackles the slow pace of the federal permitting process for mining projects on federal public lands. Section 40206 directs the Bureau of Land Management and the US Forest Service to assess their minerals permitting procedures “[t]o improve the quality and timeliness of Federal permitting and review processes with respect to critical mineral production . . . . ” For example, the Agencies are directed to establish and adhere to schedules for critical mineral production permitting and to improve coordination with federal, state, tribal, and local stakeholders. The Secretary of the Interior and the Secretary of Agriculture must report to Congress in November 2022 on additional measures to increase the timeliness of critical minerals project permitting.

Section 40210 creates National Science Foundation grant programs to support basic research on domestic critical minerals mining and recycling, with an “end to end” lifecycle approach, analyzing critical mineral production and supply chain steps. Section 40210(c) establishes a Critical Minerals Subcommittee of the National Science and Technology Council to advise the federal government on, and identify opportunities for, the exploration, production and recycling of critical minerals.

It remains to be seen how effective the IIJA’s goal of increasing the domestic supply of critical minerals will be. For example, lithium is a key element in EV batteries. A proposal to start mining a large lithium deposit in Nevada was approved by the US Bureau of Land Management in January 2021. Several environmental groups and tribes brought legal action to halt the mine’s construction.⁵ Although the Act’s aim should bring together entities across the political spectrum with its focus on a less carbon-intensive economy and the development of critical mineral resources in the US, it is not always the case that those groups in favor of renewable energy development will support the efforts necessary to achieve those goals.

*Lucas Gorak contributed to this blog post.

© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.