The Biden Administration plans to source the key metals for electric vehicles from allies outside America and focus on processing those materials in the United States, officials told Reuters in what could be a blow to U.S. miners and a move to appease environmentalists.

The U.S. Administration is keen to progress electrification and significantly increased use of EVs as part of its plans to curb emissions and fight climate change. However, in doing so, the Biden Administration is more likely to focus on job creation in the processing of the raw materials for EVs, rather than on sourcing those critical metals with more permits for mining in the United States, the Reuters sources with direct knowledge of the plans said.

Earlier this year, President Joe Biden said he planned to replace the whole federal vehicle fleet with electric cars, creating one million jobs in the process. Jobs aside, we're talking about more than 600,000 cars that will be replaced with EVs. 

The Biden Administration's proposed jobs plan envisages a $174 billion investment "to win the EV market" by enabling automakers to spur domestic supply chains "from raw materials to parts, retool factories to compete globally, and support American workers to make batteries and EVs."

Yet, China has built a strong position in the entire supply chain of critical minerals, from raw materials to processing those minerals into battery-ready components.

To reduce reliance on China for the energy transition and the climate agenda, the U.S. must either mine those minerals on home soil or source them from allies overseas. The sources of critical minerals could be countries like Canada, Australia, or Brazil.

"It's not that hard to dig a hole. What's hard is getting that stuff out and getting it to processing facilities. That's what the U.S. government is focused on," one of Reuters' sources said.

By Tsvetana Paraskova for Oilprice.com

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