Coronavirus could slow production of some critical mineral mines
The coronavirus pandemic has forced millions around the world to stop or slow work and that has impacted a number of critical mineral mining operations in the United States which are now struggling to bring projects online as they face engineering or regulatory setbacks that could push back mine construction.
Reuters reported that Piedmont Lithium Ltd., Lithium Americas Corp. and ioneer Ltd, which have Nevada projects, have said they are now facing setbacks brought on by the pandemic.
“Coronavirus could cause a year or two delay on projects,” said Seth Goldstein, a minerals analyst at Morningstar. “That helps China right now.”
The pandemic is just the latest headache for the lithium industry, with prices for white metal down 37 percent in the past year due to oversupply concerns, according to data from Benchmark Minerals Intelligence.
“The economic fallout from the outbreak will stunt the development of new projects,” said Benchmark's Andrew Miller.
In the face of the coronavirus, the U.S. government has turned its focus to boost medical supply manufacturing. Last year, the Pentagon said it would fund mines using the Defense Production Act, which gives the military wide berth to procure certain equipment. Trump has recently considered using the same law to boost medical supply manufacturing.
Rare earths developers in the U.S. worry the virus could delay any Pentagon decision indefinitely. MP Materials, which runs the only U.S. rare earths mine, remains operational, though it is reliant on China for final processing.
“As untimely as COVID-19 is, it’s on point with what we’ve been saying: North American independence is needed now,” said Pat Ryan, chairman of UCore Rare Metals Inc, which is developing an Alaska rare earths mine.
Medallion Resources Ltd, as well as privately held USA Rare Earth and Texas Mineral Resources Corp, are also waiting on the Pentagon.
“We can’t lose sight of all the other things that we need to do at this very busy time for our country,” said Paul Kern, a retired U.S. Army general and USA Rare Earth board member.
Photo: Site of USA Rare Earth’s Round Top project in Texas