If you want to understand just how critical nickel has become, look no further than the U.S. dusting off a Cold War-era law to secure it. The U.S. Govt. has invoked the Defense Production Act (DPA) to jumpstart America’s domestic battery metals supply chain. The DPA was originally created in 1950 to boost U.S. steel production during wartime. Fast forward 70+ years, and it’s being repurposed for the clean energy economy.
Why the extra urgency? The Ukraine war has shown that a big chunk of nickel production could become unavailable if Russia’s Norilsk Nickel were to get sanctioned. As it is, the market has signaled its great unease at what may happen to said production.
The idea behind the DPA move is to funding feasibility studies for existing projects, supporting mine waste reclamation, modernize current operations, and possibly offer capital for new projects.
It all sounds good but of course the Biden Administration has to add in pushing for “environmentally responsible” mining on U.S. soil. That’s not to say mining shouldn’t be as green as possible. I’ve previously written about better carbon performance in mining for The Northern Miner. It’s possible to do and it should be done. The issue from my perspective is permitting. The U.S. already has enough barriers to new mine development at the local, State and Federal level, and now the government is emphasizing the need for environmental responsibility. Who decides what is and is not responsible? While that debate is taking place, other countries are busy growing their nickel production.
The U.S. Administration is correct about the need to urgently ramp up domestic battery metal production but I don’t see that this latest move is going to make a big difference.
Anthony Milewski
Chairman, Nickel 28 Capital
