USGS proposes adding nickel and zinc to critical minerals list

November 16, 2021

The U.S. Geological Survey (USGS) is looking to update its list of critical minerals with public comments open until Dec. 9. In the meantime, the USGS is proposing that nickel and zinc be included in the redrafted critical minerals list.

Reuters reported that since 2018, the list grew from 35 minerals to 50. The larger list reflects the splitting out of rare earth elements and precious group metals into separate entities while four minerals - helium, potash, rhenium and strontium - were dropped from the list. The United States is the world's leading producer and net exporter of helium, while import dependency for the other three is mitigated by “low disruption potential.” Uranium was also dropped after being reclassified as a “mineral fuel.”

Nickel was added to the list in part because the United States relies on imports for about half of its annual consumption and in part because of its growing use in batteries needed for electric vehicles.

The USGS has expanded its criticality criteria to look beyond trade dependency to domestic supply, particularly what it calls “single points of failure.”

There is currently only one domestic operating nickel mine in the United States – Lundin Mining’s Eagle Mine in Michigan - which exports concentrates for overseas refining.

There is a single producer of nickel sulphate, but only as a by-product of precious group metals production.

This limited domestic nickel production base was also highlighted in the Biden Administration's 100-day review of critical supply chains, which recommended the government should invest as a priority in a new nickel refinery.

The combination of limited, single-point-of-failure domestic supply and the expected demand growth from battery manufacturers makes "a compelling case for inclusion" of nickel in the critical minerals list, the USGS noted.

Or, as the supply-chain review put it, not having enough battery-grade nickel “poses a supply chain risk for battery manufacturing globally, not just in the United States.”

The United States' domestic supply chain of zinc is less fragile.

The country has 14 operating mines and three smelter facilities, one primary and two secondary, one of which resumed operations in 2020 after several years of inactivity.

However, the country's refined zinc import dependency is relatively high. Imports of 710 kt (782,000 st) last year represented 83 percent of domestic consumption, according to the USGS.

Global supply trends make this problematic.
“For zinc, global mine and smelter production concentration has increased notably during the past few decades,” the USGS said, adding that “this change has been driven mainly by increased production in China.” 

of the thinking behind the latest critical minerals list is moving the analysis beyond simple import Pt dependency to encompass broader global supply trends.

The more supply is concentrated in one country, the higher the potential risk factor, particularly if that country is designated a mineral competitor, as is the case with China.
Zinc's supply risk is now above the 0.40 threshold used by the USGS to help determine criticality at 0.48.

Top of the supply-risk table are gallium, niobium and cobalt, followed by several rare earth elements.

Aluminium lies in eighth place with a score of 0.60, thanks to the concentration of smelting in China, and tin is also on the supply risk spectrum with a score of 0.50.



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