Clean Energy Requires Mining
A Model 3 sits on the assembly line at Tesla’s factory in Fremont, California.
How Alaska’s resources can build green tech and address US foreign mineral dependency
Green energy technology is built through mining. Without certain raw materials, such as graphite and rare earth metals, everything from the lithium-ion batteries that power Teslas to those storing electricity from wind turbines would be impossible to create, says US Senator Lisa Murkowski.
“We had a lot of opportunity since the early days of the COVID-19 pandemic to really appreciate in real-time how reliant we are as a nation on other countries for some very important goods and products,” Murkowski says in her podcast “Murkowski’s Message”—referring to medical supplies that were in short supply early in the crisis. “That experience has been a good reminder, I think, that much of what makes modern life possible, from cell phones to laptops for Zoom meetings to the electricity that keeps everything running—all of this comes from minerals.”
Millrock Resources President and CEO Greg Beischer concurs.
“A lot of people just don’t realize that metals are used in just about everything that has to do with energy. Solar panels, for example, contain all kinds of different metals. And then, of course, to store energy… lithium, cobalt, nickel, and other mined metals are used to make batteries.”
The 2020 Tesla Semi is an all-electric Li-ion battery-powered Class 8 semi-tractor-trailer truck with an expected range of up to 500 miles on a single charge. The lack of Li-ion battery production capabilities delayed Semi production to the latter half of the year.
Powering the Future
Lithium-ion batteries will be part of fundamental technology for the next 100 years as the world becomes increasingly electrified, predicts Simon Moores, managing director of UK-based Benchmark Mineral Intelligence.
Elon Musk once commented that lithium-ion batteries should actually be called nickel-graphite batteries because of the enormous amount of each mineral used in them, says Graphite One President and CEO Anthony Huston.
Graphite One is a vertically integrated technology and mining enterprise looking to develop the highest grade and largest known US large flake graphite deposit, located at Graphite Creek on the Seward Peninsula.
Graphite One is positioned to mine, process, and manufacture the high-grade, coated, spherical graphite necessary for energy storage in lithium-ion battery markets.
“Beyond electric vehicles and energy storage applications, Graphite One Alaska also constitutes a base feed-stock supply chain for advanced graphite applications ranging from high-purity, nuclear-grade graphite; synthetic diamond production with potential as a semiconductor substrate; graphite foam for fire suppression; and traditional uses of graphite steel manufacturing and other industrial processes,” Huston says.
“The majority of our graphite will go into green, renewable applications, but virtually all of it will feed into the advanced tech applications changing our world. That’s why I call graphite a tech metal.”
The United States is currently 100 percent reliant on graphite imports from China, which is the world’s largest producer of graphite.
“This project constitutes a significant step towards restoring a US-based supply chain for material on the US government’s critical minerals list,” Huston says.
The body shop at Tesla’s factory.
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In 2018, the Department of the Interior identified thirty-five mineral commodities for the critical minerals list.
“These commodities qualify as ‘critical minerals’ because each has been identified as a non-fuel mineral or mineral material that is essential to the economic and national security of the United States, that has a supply chain vulnerable to disruption, and that serves an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economy or national security,” a news release states.
Murkowski has been working to reduce US dependency on foreign mineral resources through various legislative efforts, including the American Mineral Security Act, which has been included in the broader American Energy Innovation Act.
“Our foreign mineral dependence leaves us at the mercy of other nations for resources we could produce right here in Alaska. We face twin challenges that are essential to our economy, security and competitiveness, but even the most common-sense policy improvements are being met with partisan opposition right now,” Murkowski says.
“First, our nation is already deeply dependent on imports. In 2019, the US brought in at least 50 percent of its supply of forty-six minerals, including 100 percent of seventeen of them.
“Second, mineral consumption is projected to rise significantly in the years ahead, in part because of clean technologies. A recent World Bank report projected that the supply of battery metals like lithium, graphite, and cobalt will need to rise by nearly 500 percent by 2050.”
Rare earth elements are another mineral market on the critical minerals list that’s dominated by China. However, Ucore Rare Metals’ Bokan Mountain heavy rare earth project near Ketchikan hopes to put an end to that.
“Rare earths are absolutely incredible. They have unique magnetic, electric, optical, and chemical properties that make them an integral part of modern life. Put simply, rare earths are critical, non-substitutable inputs required in countless high-tech, green-energy, transportation, and defense applications,” says President Ty Dinwoodie, who specializes in critical materials, including lithium-ion battery materials and rare earth elements.
“Ucore’s Bokan project has a unique geological endowment, positioning it as a predominant US source for heavy rare earths—in particular, dysprosium, terbium, neodymium, and praseodymium, which are critical for the production of rare-earth permanent magnets. These outrageously powerful magnets are significant demand drivers, commanding the highest rare-earth prices.”
There are seventeen elements defined as rare earths, though one, promethium, is radioactive and does not occur in nature. Of the naturally occurring sixteen, about four are significant economic drivers: praseodymium, neodymium, terbium, and dysprosium. The others are in oversupply or have limited basic industrial applications, notes Dinwoodie.
“Permanent magnets may not sound incredibly interesting; however, they are at the heart of most modern technologies. The most efficient motors require them to convert electrical energy into mechanical motion. Also, high-efficiency turbines and generators require these magnets to convert mechanical motion into electrical energy and are essential in maximizing the efficiencies and capabilities of electricity in modern technologies,” he says.
Situated 20 miles off the Aberdeenshire coast of Scotland, Hywind Scotland is the world’s first commercial wind farm using floating wind turbines; the farm has five 6 megawatt Hywind floating turbines with a total capacity of 30 megawatts.
GE’s 12-megawatt Haliade-X is the most powerful offshore wind turbine in the world. It is estimated that each Haliade-X uses more than 7 tonnes of neodymium-based permanent magnets—containing more than $50,000 per turbine in rare-earth oxides alone—to power the turbine’s generator.
Rare Earth Economics 101
Dinwoodie is approaching the Bokan project similarly to how Huston is tackling the Graphite Creek project, recognizing that what Ucore needs to focus on is the company’s proprietary downstream refining technology before developing the Bokan mine.
“So, what that means is that we mine the ore, we beneficiate it, then we have to put it through our own downstream transformation,” Dinwoodie says. “So, once Bokan is in production, we’re going to take the Bokan feedstock and transform it into finished material, ready to be deployed in its final technological application.”
Unlike spot commodities and minerals, such as gold, which have established markets, the economics of the rare earth market demands that producers pre-sell products by way of binding offtake or long-term supply contracts.
“That’s challenging, because end-users are not going to buy until they know exactly what you’re capable of producing,” Dinwoodie says.
The issue is further compounded by the current need—without legislation changing the situation—to compete with China in the marketplace.
“Over the past several decades, US actions and inaction pertaining to rare earths have resulted in a vacuum on the world stage that China has been more than happy to fill. By dominating global commercial rare-earth production, China effectively controls the United States and its allies in ways that, in my opinion, the West does not entirely understand. By strategically controlling the global rare-earth market at subsidized prices, China has driven out competitors and deterred new market entrants,” he says.
“The United States has just one producing rare-earth mine, the Mountain Pass Mine in California recommissioned in 2018; however, 100 percent of the mined material is shipped to China for processing and downstream refining. What the United States and its allies need immediately, especially in a post-pandemic paradigm, is a secure, domestic supply chain. A mine is only a part of the equation. What is needed first is the economic, commercial-scale downstream manufacturing capacity to produce finished rare-earth products.”
This is why Dinwoodie, with support from the Alaska Industrial Development and Export Authority, is planning to build a rare-earth processing plant in Alaska. “The reason we want to build our commercial processing facility in Alaska is because we know the need for Bokan to go into production is inevitable. Alaska will be a critical hub for sourcing. But, right now, I want it to be a critical hub for the processing of what we refer to as ‘pre-Bokan’ feedstock, because that’s what we need now. And, when we need additional secure supply, Bokan will be ready to deliver,” Dinwoodie says.
“We are very Alaska-centric,” Dinwoodie says. “I believe that Alaska can and will play a significant role in building a domestic critical-materials supply chain. Alaska is quite unique in terms of its appreciation for and understanding of the importance of mining, processing, and refining.”
Clockwise from top center: praseodymium, cerium, lanthanum, neodymium, samarium, and gadolinium rare-earth oxides.
Millrock core drilling rig in action in central Alaska.
Supply Chain Considerations
Murkowski makes it clear that she is aware of the threats to US national security posed at every stage of the supply chain.
“China is actively consolidating its control of the entire supply chain for clean energy technologies, from the raw materials mined out of the ground to the manufacturing of solar panels and the recycling of batteries. Chinese companies are even taking the small amounts of rare earths that are produced in California, processing them in China, and then sending them back to the United States because we lack refining capacity,” Murkowski says.
“The longer we wait to address our mineral security, the more we risk ceding the industries of the future to other nations. We cannot simply have one piece of the supply chain. We cannot create wind turbines, solar panels, or advanced batteries out of thin air. These technologies depend on minerals that are mined and refined—and right now, that often occurs in countries with lower environmental and labor standards.
“I’d much prefer that the graphite for electric vehicles and energy storage systems come from the Graphite One project outside of Nome. I’d much prefer rare earths come from Bokan in the Southeast. Alaskans will do a better job of responsible mining, and that will lead to more jobs and revenues for our state, but it also depends on policymakers agreeing that it is time to rebuild our domestic supply chains.”
Though it’s not on the US list of critical minerals, copper is another Alaska mineral resource vital to the continued electrification of the United States, Beischer says.
“I believe the demand for copper is going to dramatically increase in the coming decades because it is clear we are going to become a much more electrified society. A lot of cities are going to move predominantly to electric cars,” Beischer says.
“And that means two things: first of all, we’re going to have to generate a lot more electricity to be able to supply those cities with electricity. But it also means that we’re going to need that infrastructure right in the city. We’re going to have to rewire every city in the world… that means a lot of wiring.
“And, there’s only one real practical way to deliver electricity, and that’s copper wires. So I just see tremendous demand for copper coming over the next two decades.”
Beischer, who is one of several mineral exploration geologists at Anchorage-based Millrock Resources, points out that it takes a long time to move a new metallic mineral discovery through the permitting process to being a productive mine. Because of this, he sees a copper supply crunch on the horizon, which could lead to the increased economic viability of some Alaska resources.
“So, Millrock steadfastly will continue to explore for copper. And the good news for us is that gold and copper are often found in the same geological environment and sometimes in the exact same deposit.
“Look at the Pebble Mine deposit, for example: it’s billions of pounds of copper, but there’s also over 100 million ounces of gold in that deposit. It’s an absolutely enormous gold resource. We’re happy to look for deposits like Pebble in other parts of Alaska.”
As the United States considers issues of energy dependence and security, green technology sourcing and processing locations are coming into sharp focus on a national scale.
“Advanced technology is so pervasive—by and large it functions so effortlessly, it’s easy to see technology as a kind of magic,” says Huston. “That’s understandable in one sense, and unfortunate in another; unfortunate, because I really think it’s important to know where those metals and minerals come from.”
A drilling platform takes core samples at Graphite Creek.
In This Issue
The Corporate 100
Alaska Business has been celebrating the corporations that have a significant impact on Alaska’s economy since 1993. At the time, the corporations weren’t ranked as the list didn’t have specific ranking criteria. Instead, the Alaska Business editorial team held long, detailed, and occasionally passionate discussions about which organizations around the state were providing jobs, owned or leased property, used local vendors, demonstrated a high level of community engagement, and in general enriched Alaska.