The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
As DOE convenes Arctic critical minerals summit in DC, China curbs chipmaking metal exports, DOD invests in Graphite One North of 60 Mining News – August 4, 2023
Alaska hosts 49 out of the 50 minerals critical to the economy, security, and low-carbon energy goals of the United States.
Many minerals critical to the U.S. are associated with precious and base metals mines and exploration projects in Alaska.
So far, drilling has outlined roughly 14 million metric tons of graphite at the world-class Graphite Creek deposit in Alaska.
Along with supplying approximately 4% of the world's zinc, the Red Dog operation on Alaska Native-owned lands is a globally significant source of germanium, silver, lead, and silver.
From the Pentagon's multi-million-dollar investment in Graphite One Inc. to China's restrictions on the exports of gallium and germanium, Alaska's current critical minerals supply and future potential was in the headlines and subtext of American news stories over the past month.
Alaska as a future source of minerals critical to the clean energy transition grabbed headlines after the mid-July news that the U.S. Department of Defense awarded Graphite One Inc. $37.5 million to finalize a feasibility study for an all-American graphite material supply chain that would extend from the world-class Graphite Creek project near the western shores of America's 49th State to the batteries that will power electric vehicles traveling the nation's highways.
"I want to congratulate Graphite One for the diligent work that went into receiving this award, including the company's strategy to mine, refine and recycle graphite here in the United States," said Sen. Dan Sullivan, R-Alaska, a longtime advocate of the Far North State's strategic and critical mineral potential. "This award has the potential to open up significant opportunities for our state in terms of producing our abundant reserves of critical minerals and metals."
Thanks in large part to the U.S. Geological Survey elevating zinc onto the list of 50 critical minerals, the Red Dog mine, operated by Teck Resources Ltd. on Alaska Native-owned lands in the northwest corner of the state, is the largest critical minerals-producing mine in the U.S.
A previously little-known metalloid also produced at Red Dog, however, is where the subtext of Alaska's critical mineral production and potential falls between the lines of international news stories.
"Alaska already plays a key role in meeting the nation's need for critical minerals," USGS Director David Applegate said during the "Critical Minerals in the Arctic: Forging the Path Forward" summit held in Washington, DC, in mid-July. "For example, the Red Dog Mine produces 4% of the world's zinc, a commodity that is on the latest list of critical minerals. That mine is also North America's largest producer of germanium, another critical mineral that has been in the news lately for its role in advanced technology applications."
Germanium's headline-grabbing notoriety came when China let the world know it is placing state-controlled restrictions on the exports of this semiconductor metalloid used in fiber optics, solar panels, and quantum computers starting on Aug. 1. China is also curbing the exports of gallium, another semiconductor that is critical to manufacturing the computer chips that go in everything from laptops and automobiles to refrigerators and toys.
It was more by providence than design that policymakers and business leaders at both the state and federal levels convened in the nation's capital for a two-day summit to advance Alaska's critical mineral policy recommendations as the China semiconductor metals ban story was unfolding.
During this Critical Minerals in the Arctic summit, Sen. Lisa Murkowski, R-Alaska, talked extensively about Alaska's potential to break America's dependence on critical mineral imports and what that could mean for the Far North State.
Referring to the enormous stores of oil and gas on Alaska's North Slope that have driven Alaska's economy for the past five decades, she said, "I think minerals could be our next Prudhoe – I think it could be a huge economic engine for our state that can help provide resources that our country needs to compete in this 21st century."
When it comes to the natural resources America needs to compete in the 21st century, the minerals and metals critical to lithium-ion batteries are currently very high on the list.
"The United States depends on unreliable foreign sources for many of the strategic and critical materials necessary for the clean energy transition – such as lithium, nickel, cobalt, graphite, and manganese for large-capacity batteries. Demand for such materials is projected to increase exponentially as the world transitions to a clean energy economy," President Joe Biden penned in a 2022 memorandum directing the Pentagon to utilize Defense Production Act Title III funding to support sustainable and responsible domestic production of strategic and critical minerals.
As part of its White House-directed critical minerals mission, the Pentagon announced in mid-July that it is investing $37.5 million to support the accelerated completion of a feasibility study for Graphite One's envisioned domestic advanced graphite supply chain solution anchored by Graphite Creek, a project about 35 miles north of Nome, Alaska, that hosts the largest known graphite deposit on American soil.
"This Department of Defense grant underscores our confidence in our strategy to build a 100% U.S.-based advanced graphite supply chain – from mining to refining to recycling," said Graphite One CEO Anthony Huston. "The U.S. simply cannot maintain a 21st century tech-driven economy without critical minerals like graphite."
A 2022 prefeasibility study for an all-American Graphite One supply chain envisioned a mine at Graphite Creek that would produce an average of 51,813 metric tons of graphite concentrate per year and a processing and recycling facility that leverages the clean hydroelectricity in Washington to upgrade the concentrates into 49,600 metric tons of spherical coated graphite that serves as the anode material in lithium-ion batteries and 25,400 metric tons of other advanced graphite products per year.
The Graphite Creek deposit outlined so far hosts more than 14 million metric tons of graphite, in all resource categories, enough to support a mine of this size for more than 200 years. As large as this deposit is, the resources identified only account for about one-third of the roughly 10-mile-long graphite trend running across the property.
"The Graphite One project is in a league of its own, in terms of the scope of the resource in the ground in Alaska and the vision the company has for manufacturing anode materials and recycling batteries in Washington state," said Murkowski.
Given that there are currently zero mines in the U.S. producing the graphite needed for EV and clean energy storage batteries, on top of the countless electronic devices no longer tethered to the wall, North American automakers and the U.S. government want to see a Graphite One supply chain that better matches Graphite Creek's world-class potential with rocketing demand being driven by the transition to EVs powered by clean energy.
The DPA Title III funding awarded to Graphite One is half of the estimated $75 million needed to complete a feasibility study for this larger Graphite One supply chain.
Roughly 200 miles north of Graphite Creek lies the first link in another world-class critical minerals supply chain – the Red Dog mine.
While famed for its high-grade concentrations of zinc, Red Dog is also a globally significant source of the lesser-known critical mineral germanium.
One of the reasons that the germanium at Red Dog is not talked about much is this minor metalloid's contribution to Teck's bottom line is minuscule.
The value of all the germanium consumed in the U.S. during 2022 is estimated to be around $39 million, and more than 25% percent of this was imported from China, according to the USGS. So, the undisclosed value of this critical metalloid recovered from Red Dog concentrate pales in comparison to the more than $1.8 billion of zinc produced at the Northwest Alaska mine last year.
And the entire global germanium market, estimated at roughly $292 million in 2022, is not even a rounding error of the U.S.'s $25.5 trillion gross domestic product (GDP) last year.
Like many of the other minor metals critical to the U.S., however, germanium's minute market size belies its importance to the overall economy. This disparity lies in the value and importance of the technologies that germanium enables.
The high-quality germanium mined at Red Dog and recovered at Teck's Trail refinery in Canada is used in fiber optic cables, high-speed computer chips, quantum computer transistors, solar cells, light-emitting diodes (LEDs), and night vision goggles, to name a few.
This North American source of a metal critical to telecommunications, consumer goods, green energy, and the U.S. military becomes more important with China's state-controlled export restrictions of germanium and gallium that went into effect on Aug. 1.
The Red Dog deposit also happens to be enriched with gallium, though it is unclear whether this semiconductor metal could be recovered.
It is estimated that the ore being mined at the Red Dog deposit in Northwest Alaska contains roughly 26 parts per million gallium, which is about average for this type of zinc deposit. Even at these low concentrations, the ore fed into the Red Dog mill each year would contain roughly 100 metric tons of gallium.
There are, however, no records of how much of the gallium is recovered into concentrates at Red Dog, and this metal must compete with other critical byproducts at the refinery.
"(O)nly a small percentage of gallium metal in bauxite (aluminum mineral) and zinc ores is recoverable using current methods because processing techniques to separate aluminum, zinc, and other byproduct metals (for example, germanium and indium) compete for gallium in source materials," according to the USGS.
The ability to recover some of the Red Dog gallium alongside the germanium, zinc, and other metals would provide America's tech sector an alternative to China, which currently produces 98% of the world's supply of this tech metal.
Commodities analysts and foreign policy experts see China's export limitations on gallium and germanium exports as a move to counter the 2022 CHIPS Act and other actions being considered by U.S. lawmakers that restrict the exports of computer chips that these semiconductor metals enable.
"It's clearly timed to send a not-so-subtle message to the Biden administration that China holds significant cards when it comes to inputs to the semiconductor, aerospace, and automobile industries, and can and will increasingly be willing to inflict pain on U.S. companies," Paul Triolo, senior vice president for China for the Washington, DC-based strategic advisory firm Albright Stonebridge, told Reuters.
China's decision to play two of its tech metals cards raises the strategic importance of developing Alaska's rich stores of gallium, germanium, graphite, and other critical minerals currently dominated by the Middle Kingdom.
Gallium, germanium, graphite, and zinc are not the only critical minerals found in Alaska. North of 60 Mining News analysis has identified 49 out of the 50 U.S. critical minerals in mines, deposits, and prospects across the 49th State.
This rich endowment has piqued the interest of the U.S. Department of Energy and its Arctic Energy Office, which co-hosted the "Critical Minerals in the Arctic: Forging the Path Forward," a policy-driven summit convened in the nation's capital during July as a follow-up to the "Alaska's Minerals: A Strategic National Imperative" conference held in Alaska during 2022.
"Our nation has an overwhelming need and Alaska has the location and resource to meet that need," University of Alaska President Pat Pitney said during her opening address of the Critical Minerals in the Arctic summit. "The nation's defense, its economic independence, and its ability to meet clean energy and climate goals are dependent on expanding the responsible mining that Alaska has demonstrated for decades."
Co-hosted by DOE, the University of Alaska, Wilson Center, and Rand Corp., this gathering of analysts, strategists, executives, academics, and policymakers delved into the challenges and opportunities of unlocking Alaska's critical minerals potential for the betterment of the state and nation.
Many of the difficulties associated with expanding responsible mining in Alaska are shared nationwide – federal permitting, workforce needs, and financing – while others are more unique to the enormous frontier Arctic state – namely infrastructure.
Wilson Center CEO Mark Green said the primary objective of the summit held on the doorsteps of the White House and Capitol building is to develop "actionable solutions" to these challenges.
"Everyone knows critical minerals matter," he said during the day two opening address of the summit. "We don't need to raise awareness; we need to raise answers."
To frame the policy-driven discussion by the academic, business, and policy leaders gathered at the Wilson Center, the former U.S. congressman and ambassador asked, "What does sustainable mineral development in the Arctic look like?"
The Critical Minerals in the Arctic discussions carried out in front of the camera and behind closed doors has likely set in motion strategies and policies that could make America's Last Frontier and only Arctic state a domestic hub for the minerals and metals critical to the nation's economy, security, and clean energy goals.
A hub that would make the U.S. less beholden to China and others for the building blocks of the nation's clean energy and high-tech future.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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