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Nickel and zinc are now considered critical minerals by the United States. The U.S. Geological Survey (USGS) is proposing that both metals be included on the critical minerals list.
The list has grown from 35 to 50 since the last iteration in 2018. Four minerals, helium, potassium, rhenium and strontium, have been eliminated. The U.S. is the world’s top producer and net exporter of helium, while import dependence for the other three is mitigated by “low outage potential.” Uranium has also been eliminated after being reclassified as a “mineral fuel”.
Nickel and zinc are the only two new additions, and each reflects an evolution in the methodology used to determine whether a mineral is critical to the well-being of the U.S. economy.
According to the USGS, the U.S. depends on imports of refined nickel for about half of its annual consumption. The top three suppliers last year were Canada (42%), Norway (10%) and Finland (9%), all of which are considered “friendly” countries. This relatively benign supply profile has kept nickel off the list of critical minerals in the past.
But now nickel has been included for two reasons:
- First, the USGS has expanded its criticality criteria to look beyond trade dependence and domestic supply, specifically what it calls “single points of failure.” There is currently only one operating nickel mine in the United States – the Eagle mine in Michigan, which exports concentrates for refining overseas. There is only one producer of nickel sulfate, but only as a byproduct of precious group metals production. This limited domestic nickel production base was also highlighted in the Biden administration’s 100-day review of critical supply chains, which recommended that the government invest in a new nickel refinery as a priority;
- The second reason is the change in nickel’s use profile from an alloy in stainless steel production to a chemical component in electric vehicle batteries. The combination of limited domestic supply at a single breaking point and expected growth in demand from battery manufacturers makes “a compelling case for inclusion” of nickel on the critical minerals list.
The U.S. domestic zinc supply chain is less fragile. The country has 14 operating mines and three smelting plants, one primary and two secondary, one of which resumed operations in 2020 after several years of inactivity. However, the country’s dependence on refined zinc imports is relatively high. Imports of 710,000 tons last year accounted for 83% of domestic consumption.
For zinc, the concentration of global mine and smelter production has increased significantly in recent decades, and this change has been driven primarily by increased production in China.
The more supply is concentrated in a country, the higher the potential risk factor, particularly if that country is designated as a mining competitor, as is the case with China.
Zinc supply risk is high, close to critical risk. At the top of the supply risk table are gallium, niobium and cobalt, followed by several rare earth elements. Aluminum ranks eighth, due to the concentration of smelting in China, and tin is near supply risk.
Copper has a low supply risk profile due to a large domestic mining, smelting and recycling industry. Lead is just below the cut-off point, again due to a growing concentration of global mining and smelting capacity in China. None of these industrial metals are on the European Union’s critical minerals list.
