Biden to use Defense Production Act to encourage battery material production

WASHINGTON (Reuters) - U.S. President Joe Biden could activate a Cold War-era "defense production bill" as early as this week to encourage domestic production of what's needed to make batteries for electric vehicles, two people familiar with the matter said on March 30, local time. of minerals.

Under the bill, companies are expected to receive government funding to conduct feasibility studies for new projects to mine lithium, nickel and other metals needed for electric vehicle batteries, or to increase the production efficiency of existing facilities. The move could also aid in the recycling of battery materials. In addition to electric vehicle batteries, the relevant bill will also apply to high-capacity batteries. It's unclear how much the government will be able to set aside.

Biden’s economic plan prioritizes tackling climate change and using electric vehicles to stimulate domestic manufacturing, the report said. Last month, Biden expressed support for new coal mines in the United States, but stressed that new coal mines must benefit local communities and not damage the environment. Biden also said the U.S. Department of Defense would increase reserves of the metal needed for certain electric vehicle batteries, a plan that may require sourcing from overseas mines due to lower U.S. production.

Obtaining enough raw materials to produce electric vehicle batteries has been a major hurdle in the U.S., as domestic coal mines face tough regulations and environmental opposition.

Todd Mullen, a spokesman for metals company Talon Metals, said Biden’s activation of the Defense Production Act demonstrates that the U.S. sees domestic battery material mining, processing and recycling as an important focus right now. Currently, Tesla has signed a nickel concentrate supply agreement with Talon Metals.

The National Association of Mines said Biden's expected order may be limited in scope, but the policy itself has sent a strong signal to global markets.

Several industry executives said the decision showed Biden was taking the growing supply shortage seriously, and they were eager to learn the specifics of how Biden would use the bill to boost domestic production of the metal needed for electric vehicle batteries. "We cannot allow other competitors to dominate the mines," said Rich Nolan, president of NMA Corporation. "It's a positive sign, and we're pleased with it," said James Carraway, chairman of Ioneer Corporation. A lithium and boron mine is currently being developed in Nevada.