The Investment in Infrastructure and Jobs Act has unleashed a flood of money building renewable energy capacity, but also fueling some risky mining and mineral processing projects. In October 2022, the Department of Energy selected 20 project awards for their American Battery Minerals Initiative.
In our earlier installment, we discuss DOE’s risky award to Talon’s mineral processing facility in North Dakota, and the agency’s proposed rule which could lower that risk, if DOE requires awardees perform ongoing due diligence across their mineral supply chains. Here, we illustrate two more risky awards from this same initiative that would benefit from due diligence review.
Tennessee Lithium/Piedmont Lithium
DOE awarded $142 million to the Tennessee Lithium project, a cathode materials separation and processing facility proposed by Piedmont Lithium. Like Talon, Piedmont Lithium would source the minerals for their processing facility from their own proposed mine in Gaston County, North Carolina. Piedmont Lithium’s proposed mine has faced pushback from the Gaston County Commission. The County Commission so far has declined Piedmont Lithium’s zoning change, largely over concerns for land and water use. Sharing similar concerns, North Carolina’s Division of Energy, Minerals, Land, and Resources has twice sought additional information from Piedmont Lithium about data gaps in their mine plan, according to their financial filings.
Perhaps Piedmont Lithium can fix their flawed mine plan. Or perhaps, the mine will never happen. Given this uncertainty, DOE should insist Piedmont Lithium receive all necessary mining authorizations from Gaston County and North Carolina before finalizing award terms for Tennessee Lithium’s mineral processing. Piedmont Lithium has, so far, largely bungled their due diligence and community outreach, needlessly generating local opposition. Until Piedmont Lithium demonstrates their lithium mine complies with local, state, and community standards, DOE risks the mine may not provide a timely, reliable source for the DOE funded lithium processing.
DOE announced $219,820,610 to a Louisiana graphite processor, Syrah Resources, that intends to source graphite ore from their own Balama graphite mine in Mozambique. The US State Department recently created a Minerals Security Partnership with many countries, including Mozambique.
According to reports, Syrah’s Balama mine in Mozambique’s Cabo Delgado province is “where a violent Islamist insurgency that U.S. officials have linked to ISIS has created a humanitarian crisis.”
The State Department’s view is Syrah’s graphite mine “employs hundreds of local workers, contributes millions of dollars in community development, and undermines the aims of those who would sow conflict.”
Hopefully the State Department is right; the best way to demonstrate this is for DOE to require awardees to perform ongoing human rights and environmental due diligence (HREDD).
Due Diligence Plan for the US Government
The US government wants to reduce risks for conflict or corruption too often found in extractive industry supply chains. The International Financial Institutions that routinely fund extraction are supposed to follow recognized HREDD standards, including earning the free, prior, and informed consent of affected Indigenous communities. DOE’s mineral processing loans, and all US Government programs, should also reflect these values in order to live up to President Biden’s climate and justice commitments.