Muse

The fight against climate change has some powerful allies.

We're seeing some of the world's largest financial players starting to integrate climate risk into how they evaluate their portfolios.

Stay tuned for a special branded episode of Global Translations, presented by Citi, right here on December 16th. Ryan, what are you doing for fun in the pandemic?

I watch a lot of TV. Have you got any recommendations?

I've been doing a lot of power watching with my kids of Deep Space Nine.

And what's that?

So you don't even know. It's a spinoff of Star Trek.

Okay, nerd. Well, I guess I'm doing the next episode while you buy tickets for the Deep Space Nine convention.

But it's funny, the show was made in the 90s and they have this concept of the future. And it's all about mining asteroids and moons and other planets for all these crazy minerals like dilithium and trilithium and promethium quartz crystals. But it's actually not that far fetched. I mean, we're hearing people talking about mining asteroids and mining the deep seabed. Mining is important for the future and we need to figure out how to do it in a way that isn't disastrous for the planet, clearly.

Yeah, but chop chop. We need some electric cars now and we can't wait 20 years to get them.

Well, that's the whole tension, right? Like we need this green energy transition, but we need to mine to get there. It's a really interesting puzzle for countries to solve.

Okay, that's great. I'm glad that's the way we spend our nights now. But I'm in the mood for some solutions that we can use here and now. And that's what the episode is.

Well, let's get to it. From Politico, I'm Louisa Savage.

And I'm Ryan Heath.

Hello.

Hi, Senator. This is Louisa. This is Senator Lisa Murkowski of Alaska.

This is Louisa. And are we getting you from Alaska? Where are you? No, I'm in Washington, D.C. I feel like I'm in a tin can here, but I'm in Washington, D.C. in the Senate recording studio.

Senator Murkowski is the chairman of the Senate Committee on Energy and Natural Resources. I spoke with her in September when the Senate voted on a second round of coronavirus relief bills.

Yeah, it's been quiet. It's Thursday afternoon, so most of my colleagues have skated to go back to their home states.

We've talked a lot on this podcast about the problems with getting the critical minerals we need. In this episode, we'll dig into three solutions. Like legislating to make domestic mining easier, which would reduce America's reliance on other countries. And that's where Senator Murkowski comes in.

She's pushing the American Mineral Security Act. It's a bill that would make it easier for mining companies to start projects in America. Senator Murkowski wants us to be less reliant on international sources like China and the Democratic Republic of the Congo, and have a stronger domestic grip on minerals.

And we rely a lot on other countries. According to the U.S. Geological Survey, we import half of America's critical mineral supplies. Of those 46 minerals, there are 17 that we source entirely from abroad. China, on the other hand, gets 90% of their critical minerals from within China. Here's Senator Murkowski again.

And so when you look about other areas of energy vulnerability, you cannot help but see the glaring reality when it comes to reliance on minerals. We are a nation. We are a people. We are a world that relies on minerals for everything from jet airplanes to our smartphones. And we're blessed in this country to have access to a fair amount of minerals, but not everything, not everything that we need. And so when you think about those things that we need, whether it's to power your buildings, keep your lights on, or help facilitate travel through a jet aircraft or communications through a smartphone, you have to look at where your vulnerabilities are. And to understand where the United States is in our vulnerability for minerals, it is a greater vulnerability, I believe, than we once had when it came to our need for oil and resources to power ourselves.

Today we're examining three solutions to give us sustainable access to the minerals we need to make our smartphones smarter and power the batteries in our electric cars. The first solution involves legislation. It's a bill that... could give us better access to minerals in America. That's Murkowski's solution.

The second solution is linking up with a neighbor. Form an economic partnership. We'll talk to a Canadian ambassador more on that.

And the third solution is to form a public-private alliance, a group of political and business leaders from countries who all need minerals and who work together to solve their supply challenges.

But first, let's turn our spotlight back to Senator Lisa Murkowski and that first solution. Passing laws to make it easier to mine our minerals at home. To Murkowski, legislation is the way to get better access to minerals in the U.S. And she's trying to do that with the American Mineral Security Act that we mentioned earlier, or AMSA. That bill is designed to lower the barrier to domestic extraction of minerals and cut down on permitting delays. The easier it is to mine, the easier it is to get critical minerals.

What we do with our American Mineral Security Act or what we lay out in the legislation is pretty basic stuff. We require the federal agencies to identify the critical minerals here in this country to ensure that we have timely surveying of domestic deposits to really figure out where those resources are. We do work to streamline or cut down on unnecessary permitting delays for projects to produce them because we know that one of the challenges that we have in this country is we've got a permitting process that is robust. We acknowledge that. But when you have a process that is designed to impede or slow down, further delaying a project, that adds to a typically already costly process. And so let's make sure that we take away the unnecessary roadblocks. We also focus on rebuilding domestic supply chains. We promote workforce development. We invest in research and development to increase recycling. People are getting that. They're understanding that message. And I think what we're trying to reinforce here is that medical items are just a tip of the iceberg for national vulnerabilities. And when we think about future emergencies, future disasters, what is it that we will need? Well, just about everything that you can think of is going to come back to minerals. And where we are with foreign mineral dependence is what this conversation is all about today.

On the one hand, some people are opposed to getting rid of red tape and streamlining because regulation is there for a good reason. But on the flip side, is that approach even enough? Is streamlining red tape enough to spark domestic mining and processes? Or does the government need to play an even more proactive role through incentives or loan guarantees or some kind of help with financing? Given that these are global markets and it's a very competitive market.

I have an approach that says, let's see what we can't do to get government out of the way if it is the holdup. They are the ones that seek to delay for delay's sake, thus adding to cost. So, you know, when you look at the United States permitting system, I think we recognize that it's notoriously slow. It takes seven to ten years to permit a mine here. You compare that to places like Canada and Australia where their permitting process is pretty much two to three years thereabout. And so when you think about the holdups or the holdbacks to mining in this country, it doesn't help if you've got a really cumbersome permitting process when you're trying to attract global investment. And so looking at this avenue, what more we can do on permitting, is important. And my bill says that we can work through the permitting process, but we do not truncate the environmental review process.

Senator Murkowski knows there's pushback when it comes to mining, especially with regard to the environment.

There have been some who have said, well, your American Mineral Security Act basically does away with all environmental safeguards and it allows unlimited development and permitting. We're not amending NEPA.

NEPA is the National Environmental Policy Act, which for 50 years has been the gold standard for environmental legislation. It sets the rules around how the federal government assesses the environmental impact of proposed mines, of pipelines and more.

We're not amending the Clean Water Act or any of the other protective measures. And so what we're trying to do is make the regulations, the general process, fair for everyone. So if we can make small improvements in permitting, I do think that does help. to make us more attractive globally when it comes to the investments. That is ultimately what we're looking for. These projects need to stand on their own, but when it is the government added cost because of delay, I think we need to look at that first to see what we can't do to make things more expedited.

There's a balance between scraping out the minerals we need and limiting the impact on the earth. Of course, there are legislators and others who criticize Murkowski's approach, but she makes the point that these minerals are actually necessary for the transition to green energy.

They're saying, well, we need to move off of fossil fuels and move to renewables because these are clean and we have to care for the environment. But please do recognize that when you want to talk about those solar panels, when you want to erect those additional wind turbines, those panels and those turbines are going to require minerals, and those minerals come from our earth, and we're going to have to be able to access them. So please, at the same time that you're telling me let's move to renewables, don't forget that we are still dealing with an extractive industry, and a lot of times I get, oof, well, we don't want to do that. That's not what I meant. Well, until such time as you can build things without minerals, without your mineral base, we're going to continue to need them. They are at the core, really the foundation of about everything that we have in modern society, and yet we so take minerals for granted. And so making sure that people understand this is important.

Once we get the minerals, America is still behind other countries in our ability to process them. Murkowski's Energy and Natural Resources Committee has talked a lot about mineral supply chains. They've had about nine hearings so far.

And when we have these witnesses come in, they're very upfront with this. They say, you know, we are lagging in the United States when it comes to what we're doing to move out on our mineral security. We had one expert in a hearing say that the United States is currently a bystander in the global battery arms race. You know, we all want to move to batteries and storage, but you better appreciate that in order to be in that manufacturing area, you've got to have battery metals like lithium, like graphite, like cobalt. That is going to be key to whether or not we lead in this area of battery and battery storage. How we get off of the stands and are down running the race, this is what we need to be focused on.

So what is your vision then of America's future when it comes to critical minerals and metals? Is it full self-sufficiency? How do you see us getting there?

It is one where we want to lessen our reliance on others to be more energy independent, if you will, but recognizing that you're still in a global marketplace. And so how we are able to develop resources that are important to us and important to others, develop allies that we can be comfortable and confident as trading partners for other resources. But right now, we are in a situation where even if we might have the minerals, we're not doing the processing of the minerals. That doesn't really alleviate your vulnerability there. And so what I would like to see in terms of the U.S. position is a place where we are producing the critical minerals that we have here in this country, that we are building strong and secure trade relations with others who have good environmental safeguards as well, and that we are also working to build, at the same time we're working to build our supply chain, we're working to build our workforce. And that workforce is everything from the actual mining to the processing. And so it is a, I think I used the word earlier, a full-spectrum approach here. We recognize that we will probably not be in that enviable position where we will be able to produce everything that we want.

While Murkowski sees expanding domestic mining as a big step forward towards mineral security, she knows that it won't be a cure-all. We'll still need to get some amount of critical minerals from elsewhere.

We just simply don't have that within our land mass in the United States, although we have a heck of a lot more than most other countries. But having said that, it is not a situation where 100% of it has to be produced here in this country.

Thank you for having said that, 5-0 in London,

But we do need to move ourselves to a place where, again, we are not 100% reliant on 17 very significant minerals, 100% reliant on other nations for.

the national certification of the League of Belansrdia Pritchondcast, which places you need aller of faith and of social impairments in the Navy, must have been wonderfulован, and that's a solution that we Java and the Wolf mover mist can help us from doing that as well. So, by coolinging off, we know the similarity section of the 92-웠 и reuse information,

So whether it is what we're doing to establish these alliances, what we're doing to establish our own workforce and expertise and being pragmatic about what our needs are and where we have vulnerabilities and how we can work to address them.

so both games that can help us back on that used playoff Britain system. And just paying terminar the title of the European Zoo, to help us work together... Are LO spotted there because of our community joints as well. These two are all the 그랬 say, We andere artef원� hjäl cose,

It should be an eyes wide open approach to mineral security.

But at the end of the day, something big does need to happen. We've built too much of our modern economies off the back of critical minerals to just suddenly do without them.

Senator Murkowski, what is your nightmare scenario? The nightmare scenario is one where we just close our eyes and trust that everything that we need and ask for from a manufacturing perspective will just continue to be supplied to us because of the good grace and goodwill of other countries, who will recognize that the way to bring this country to its knees is to choke off our supply. Because not only do we then lose the supply, those companies, those manufacturers that are teed up here in this country with workers at the ready, all of a sudden those jobs are gone, the product is no longer produced here, and we are beholden to those who would seek to do us ill and who would delight in nothing more than seeing the vulnerability of this great nation.

Senator Murkowski's American Mineral Security Act could very well lead to more mineral security for the U.S. and help out our defense and manufacturing industries.

But it's also likely that at least some American mining projects just won't make economic sense without big government subsidies. So, if there are some countries we can't rely on to supply critical minerals, and other projects that are just too expensive to do at home, where does that leave us?

That brings us to that second solution, reaching out and teaming up with a trusted neighbor.

So, there was a recognition, it has been for a while, for both of our governments, that this is a very important and complex sector. Demand for critical minerals is growing globally, but also in Canada and the U.S.

We're starting to look around the world for who could be a trusted partner, and Canada and Australia are two allies who do a lot of mining. This is Kirsten Hillman. She's Canada's ambassador to the United States. And responsible for managing Canada-U.S. relations here from Washington, D.C. Just a year ago, Canada and the U.S. came up with the Joint Action Plan on Critical Minerals Collaboration.

But the supply chains that we have are at risk. We're facing a situation where the production and the processing of a number of critical minerals is highly concentrated in just one or two countries. So, our leaders came together and recognized that Canada-U.S. cooperation is going to be part of the solution to diversifying our supply chains. And in that regard, Prime Minister Trudeau and President Trump agreed back in December of 2019 to develop a Joint Action Plan on Critical Minerals Collaboration. And that was developed and finalized in a couple of months. And we're now in the process of implementing it.

The plan aspires to secure critical mineral supplies for defense and strategic industries and loop in private businesses. That involves taking actions like...

Working with industry to facilitate developing two-way investment. Investment into Canada, investment into the United States, where those minerals are located, so that we can make sure that our mind in a reliable, safe, environmentally friendly way. The plan focuses on important sectors such as... Telecom, IT, energy, defense, renewable technologies. We are also working very closely together in the area of critical minerals and our defense supply chain, because there are many critical minerals that are essential to some of our high technology in the defense area. And finally, last but not least... And then, of course, data, research, collaboration in that space. And finally, the last pillar of the cooperation is to work with other like-minded partners internationally to ensure that we do have viable, reliable, resilient supply chains. Because these different minerals...

are located in different parts of the world. Canada has a large amount of them, but other countries do as well. And so we want to make sure that we all work together to have a secure and reliable trade in these products.

What would you say are the benefits to the US of developing these supply chains with Canada?

I think that if the COVID crisis has taught us anything, it's that we have, in some areas, let our supply chains become a little too fragile, that we are a little less self-reliant than we would like to be, or perhaps should be in order to ensure the health and safety of our citizens. But at the same time, I think that the COVID crisis has also taught us that no country can go it alone, not even the United States. So while we might want to bring some of these supply chains back home more than they have been in recent years, we also recognize that we can't go it alone. And the critical minerals is actually an area where both of our governments and our private sector recognize that even earlier, that we have to, of course, participate in global commerce and the efficiencies of global supply chains, but we also have to balance that with ensuring that the supply chains that we have are with partners that we can trust and that we can rely on when the going gets tough. And Canada and the U.S. are those kind of partners.

Mining comes with a lot of environmental issues, but Ambassador Hillman says that Canada takes them seriously, which can't be said for all countries that mine critical minerals.

Canada has been at the forefront for years in putting in place national standards, international standards around mining activities, both from the environmental and the social perspective and human rights perspective. And we live that, obviously, in our own country, but we seek to also promote those values internationally. In 2019, Canada adopted the Canadian Metals and Minerals Plan. And as a component of that plan, there is a commitment to continue to move forward in the way in which we mine not only critical minerals and rare earths, but all of our production in a manner that improves upon its environmental sustainability over time. Within our domestic policy, and in particular in the critical minerals space, we have worked very hard to use this area as a pathway to address one of our government's core domestic priorities, which is improving our relationship with Indigenous Canadians. And so a lot of effort has been put into putting in place partnerships and contracts and arrangements that will allow and provide a lot of potential for Indigenous communities to benefit from the economic consequences and the economic benefits of these operations.

Like Senator Murkowski said earlier in this podcast, mining is a double-edged sword. It has environmental repercussions, but we need it to get to clean energy.

And so if we are going to support and enhance, for example, clean tech, solar industry being one example, then these minerals and metals are going to be essential. So we look at that. We also look at recycling of these metals and technologies around recycling so that we can make sure that we are getting maximum advantage of the products that we do get out of the earth. And then we look at ways to mine the ones that we will be mining as sustainably as possible going forward.

We'll be right back. Drought, flooding, wildfires. These are the stakes of climate change. To avoid disaster, many corporations, multinationals, and countries have committed to reducing greenhouse gas emissions to net zero by 2050. I'm Heather Clancy. On a special branded episode of Global Translations presented by Citi, we learn how the finance sector is helping facilitate a low-carbon transition through sustainable financing solutions.

It's clear that that's where we are headed. That's where we have to head for a bank like Citi. That involves developing and executing on pretty ambitious plans on both the opportunity and the risk sides.

Tune in December 16th, wherever you listen to this podcast.

In that second solution, Canada and the United States are helping each other build stable access to critical minerals. But what if we wanted to build out our network, work with multiple countries and their business and industry leaders to better solve our collective need for minerals? Well, that brings us to...

our third solution, a public-private alliance. In Europe, they're using this idea to tackle mineral security issues and the need for clean energy tech. They're uniting decision makers from the public and private spheres to overcome the challenges of sourcing raw materials and

turning them into batteries. As you would remember, at that time I was vice president for the Energy Union and a big part of our work was to focus on the smart mobility on the ways how to store energy, especially coming from renewable sources. And very soon we discovered that if it comes to batteries that we are very much lagging behind what was, I would say, the most important trends in the smart mobility. This is Maros Šefković. He's the European Union

Commissioner from Slovakia and the EU Executive's vice president. I wanted to talk to him not only because Slovakia makes a lot of cars, but Šefković helped create and is now in charge of the European Battery Alliance. One small country couldn't do it alone, so he decided to apply

this public-private consortium idea to batteries. And I realized that if you really want also in the future to be the manufacturers of what we in Europe believe are the best cars on this planet, and to make sure that they should be also the most sustainable, once we have to make a big advancement, big progress in the battery sectors. And this is how I came up with the idea that what we need to do is really get all key stakeholders around the table and to create the conditions for them to work together with the EU institutions, with the financial institutions, and really to listen also to them what we need to match especially the Asian competitors at that time and to lead

in this segment. And so, Šefković started the European Battery Alliance, or EBA. It's a consortium of government and industry leaders from across the EU, as well as entities like the European Investment Bank. And together, they address Europe's growing need for batteries and clean energy tech. Europe's leaders don't just want batteries and clean tech, however. As Šefković explains, they want to have the European-made seal to boot. So, developing a battery sector in the region is a must.

Why is it important? Because I don't think you can say that the car is made in Europe if you do not have the software for the batteries, if you're not able to manufacture the batteries, if you do not know where the batteries came from, how the raw material has been extracted, and if actually the performance of the batteries is matching the European standards and expectations.

This unified group of governments and companies is appealing to investors, even during the recession of 2020. So, the EU is now a hotspot for battery investment. Šefković says that even with the pandemic, electric car sales are rising. But selling more cars means Europe needs more critical minerals.

We just adopted our foresight report, where we analyzed that for 2030, we would need 18 times more lithium. And by 2050, we would need 60 times more lithium. If it comes to cobalt, you made your reference to. So, there, we expect that we would need between 15 to 16 times more by 2050 than right now. So, of course, we need to act. What we do right now is that, first and foremost, we are exploring the possibilities which of the raw materials we can actually extract and process here in Europe.

And this is where having a consortium of countries working together helps. The European Battery Alliance can easily source minerals from all over the continent. If it comes to lithium, we have

currently four projects in pipeline in Portugal, Spain, France, and in the Czech Republic. I'm very glad that European investment banks are strategically oriented, that they change their lending mandate, and they are ready to help us with financing this not only extraction and mining, but also the

refining and processing of the lithium. When you mine, process, and utilize the minerals all on the same continent, with the same high environmental standards, you're cutting at least some of the environmental impact. There's no need to ship material halfway across the world. Again, there may be

surprising information until today. If you want to process lithium, we have to ship it all over to China and then get it back. So it's not good for the carbon footprint, not for our strategic autonomy, which we realize we have to build, especially after some of the harsh lessons of the COVID crisis. So just speaking about lithium, by 2025, if this project works out, we should be able to cover 80% of our demand. And this is, I would say, the approach which we do concerning the Europe. But of course, we are also looking for the good cooperation within the third countries. In spite of all of the effects of COVID-19 on

the global economy,

economy. Shefkovic says the alliance is ready to expand outside the EU. If that sounds complicated, well, the EU is used to it. Complicated is their middle name.

Plus, we are extending our offer for cooperation for Australia, for Canada, for several European countries. And we are discovering what we have in our neighbourhood, that Serbia has a lot of borate. Albania is very strong with platinum. And we learn more and more about what we have in our own member states. So that will be such a joint effort, because I think we cannot be dependent on just one company, on one country. And therefore, we are also going to finance quite important research and innovation projects where we can replace this material, how we can introduce this urban mining by better recycling and reuse of these materials to be less dependent on imports from the third parties, especially if they are very far and where the carbon footprint, just by transporting them, is getting much worse. Shefkovic says there's plenty of inbound interest as well. So we have American companies, we have Chinese companies, we have Korean companies, we have Japanese companies here. As you know, we are open for the cooperation. Slovakia has a big, successful

car industry. But for all the benefits of globalisation, Shefkovic also faces backlash for manufacturing jobs leaving Europe. I asked him how they were going to reskill and upskill workers, so they'd be better paying jobs for them in the future. He gave me the example of a Swedish battery startup called Northvolt. They have made in the EU batteries.

In all our action plans and all our strategies, we are also highlighting the need to develop that expertise and also to introduce even, I would say, these new subjects at our universities where you need this combination of technical skills, chemistry, robotisation and ICPs. I think that it would be one of the key challenge, not only for Europe, but I would say for the global labour market. How can we equip the new labour force to match these skill demands because the new jobs will be there. The question is, can we have enough of a good specialist? Can we make the young people interested in this type of studies to make sure that we would really fulfil all the openings which already are on the labour market? And I know that they are getting very good salaries because there is high demand for these top experts.

Speaking of jobs and training, well, the next chapter of this podcast is all about labour. The last supply crisis that we're examining this season doesn't involve anything material, it involves jobs.

We're facing a global crisis in which millions of people have seen their livelihoods get turned upside down by climate change, tech disruption and now the coronavirus.

Mass shutdowns and pandemic adaptations mean that millions of jobs are disappearing and millions more people need new skills.

Various economies will recover. They'll recover at various speeds. But if there's one thing that policymakers have to really do is ensure that we simply don't go back to setting only economic growth as a target. It has to be the kind of growth that delivers jobs, that delivers broad-based prosperity, that is compatible with the planet, and that is built off of good institutions and governance.

On top of those, the move to clean energy is changing the labour market too. Shifting away from fossil fuels means we need to move toward jobs in green energy. Stay tuned for the next chapter of Global Translations. Our producers are Annie Reis and Cara Tabor.

Our senior producer is Jenny Arment. And Irene Noguchi is the executive producer.

I'm Louisa Savage.

And I'm Ryan Heath.

Thanks to Senator Lisa Murkowski, Ambassador Kirsten Hillman, and EU Vice President Maras Shefkovic for talking with us. Global Translations is presented by Citi, a leading global bank.

Subscribe to the show wherever you get your podcasts and listen for a special branded episode from Citi coming December 16.

Then on January 6th, Ryan and I will be back with another episode from Politico. Thanks for listening and see you soon.