Our team at Lomiko Metals has been monitoring actions by the government of Canada and the US that are focused on reducing dependence on Chinese supply of graphite, lithium and other electric vehicle battery materials. Canada and the US have worked closely and confirmed supply agreements between themselves.

President Donald Trump recently signed an Executive Order entitled Executive Order on Addressing the Threat to the Domestic Supply Chain from Reliance on Critical Minerals from Foreign Adversaries, which is focused on creating North American suppliers of Battery Materials.

Excerpts from Executive Order:

“…the United States is 100 percent reliant on imports for graphite, which is used to make advanced batteries for cellphones, laptops, and hybrid and electric cars. China produces over 60 percent of the world’s graphite and almost all of the world’s production of high-purity graphite needed for rechargeable batteries.”
“(i) the United States develops secure critical minerals supply chains that do not depend on resources or processing from foreign adversaries;
(ii) the United States establishes, expands, and strengthens commercially viable critical minerals mining and minerals processing capabilities; and
(iii) the United States develops globally competitive, substantial, and resilient domestic commercial supply chain capabilities for critical minerals mining and processing.”

In September, Congressmen Lance Gooden (R-TX) and Vicente Gonzalez (D-TX) recently introduced a bill that seeks to decrease the U.S.’s dependence on China for critical metals.  The bill, dubbed the Reclaiming American Rare Earths (RARE) Act, aims to establish tax incentives for domestic production of rare earths.

The Congressmen statement sounds the alarm regarding critical metals production: “The United States is more dependent than ever on the importation of the resources that drive our economy, enable us to build advanced technology, and ensure our national security,” Gooden’s office said in a release. “Thirty-five of these rare earth minerals are designated by the Department of Interior as ‘critical’, and we source fourteen of them entirely from foreign suppliers.  China is a leading supplier for twenty-two of the thirty-five. The RARE Act is specifically designed to change that.”

Earlier this year, Sen. Ted Cruz introduced similar legislation, dubbed the Onshoring Rare Earths Act of 2020, or ORE Act.  Further, on December 18, 2019 Canada announced that it had joined the U.S.-led multilateral Energy Resource Governance Initiative (ERGI). ERGI aims to support secure and resilient supply chains for critical minerals by identifying options to diversify supply chains and facilitate trade and industry connections.

Canada, and especially Quebec, are perfectly situated to supply the U.S. with many of the critical minerals it is seeking to secure due to an extensive selection of mineral projects.  Also, strong political and economic ties, a stable political, economic and regulatory environment and a robust metals and mining sector. Of the 35 critical metals identified by the U.S., Canada is a sizable supplier of 13 of such minerals including graphite, lithium and manganese to the U.S. and the second-largest supplier of niobium, tungsten and magnesium. Canada also supplies approximately one quarter of the U.S. uranium needs.

The only operating graphite mine in North America, the Imerys Graphite & Carbon at Lac-des-Îles, is only 30 miles northwest of Lomiko’s La Loutre property. These announcements bode well for our plans to develop a new producing graphite mine as demand is expected to increase exponentially for the mined natural graphite material, as more is used in the production of spherical graphite for graphite in the anode portion of Electric Vehicle Lithium-ion batteries.

If Joe Biden becomes the next president of the United States, the energy industry will feel the pinch, with onshore gas and offshore oil being the most vulnerable industry segments, Moody’s has said, as quoted by Natural Gas Intelligence.

The Democrat candidate has already made public a clean energy plan that will cost $1.7 trillion and that will focus on research and development of new clean energy solutions to the climate crisis.

This in itself would be negative for the oil and gas industry, if successful, as it will dampen demand for their products. But Biden has also promised his voters to stop offering new offshore oil and gas leases and to ban new drilling on federal land, even though he stopped short of promising a ban on fracking.

But federal leases for oil and gas production accounted for more than a fifth of the United States’ annual oil and gas production last year. Oil from offshore fields in the Gulf of Mexico accounted for 64 percent of oil output from federal lands, Moody’s senior oil and gas analyst John Thieroff said in a note this week…CLICK for complete article