Providing Legal Insight for Government Contractors
The Infrastructure Investment and Jobs Act (“Infrastructure Act”) signed by President Biden on November 15, 2021 includes funding for research and development of critical minerals mining, recycling, and reclamation and permits loan guarantees for domestic critical minerals supply projects in an effort to eliminate U.S. reliance on critical minerals sources susceptible to supply disruptions. The Infrastructure Act also provides financial and policy support to bolster the domestic supply chain and manufacturing and recycling capacity for electric vehicle batteries, which rely on certain critical minerals. Congress further emphasized a concern with securing the critical minerals supply chain by establishing a Critical Minerals Interagency Subcommittee and tasking the Departments of Interior and Agriculture with improving the critical mineral permitting process. In early November, the Department of Interior (“DOI”) released its updated 2021 Draft List of Critical Minerals. This list will guide Infrastructure Act critical minerals-related funding allocation.
The Infrastructure Act appropriates $100 million per year from FY2021 through FY2024 to the Department of Energy (“DOE”) to establish a grant program that will issue awards not to exceed $10 million per grant for projects to develop critical minerals and metals in the United States or to process or recycle critical minerals in the United States. This grant program will give preference to projects for secondary recovery of critical minerals and metals that include domestic processing and that are likely to be economically viable in the long term. This same section of the Infrastructure Act requires DOE, in coordination with the National Science Foundation, to issue competitive awards for research and development that will advance innovation in critical minerals mining, recycling, and reclamation. Nonprofit organizations, educational institutions, National Laboratories, and consortia including certain public and private entities would be eligible for such awards. Besides direct funding, the Infrastructure Act also permits DOE to make loan guarantees for projects that increase the domestically produced supply of critical minerals.
In addition, the Infrastructure Act appropriated $3 billion for a DOE grant program to fund advanced battery manufacturing, recycling, and processing activities and another $3 billion for battery material processing activities, such as expanding the capability of advanced battery manufacturing in the United States by enhancing the domestic processing capacity for minerals necessary for advanced batteries and to reduce the reliance on foreign sources of critical minerals.
The Infrastructure Act creates the Critical Minerals Interagency Subcommittee (the “Subcommittee”) and tasks the Subcommittee, among other things, with identifying and evaluating federal policies and regulations that restrict the mining of critical minerals. This task and other federal agency advising and strategy development tasks are part of the Subcommittee’s responsibility to coordinate government efforts to ensure secure and reliable supplies of critical minerals to the United States.
To further enhance the domestic critical mineral supply chain, Congress has directed DOI and the Department of Agriculture (“USDA”) to improve the quality and timeliness of the Federal permitting and review processes with respect to critical mineral production on Federal land. These permitting reforms are in addition to the Infrastructure Act’s codification of the One Federal Decision policy and reauthorization of the Federal Permitting Improvement Steering Council. Specifically, the federal permitting and review process for critical minerals must, among other things:
(1) establish and adhere to timelines and schedules for consideration of and final decision on applications, plans, leases, licenses, permits, and use authorizations for critical mineral-related activity on federal land;
(2) establish permitting performance goals that are quantifiable and contain deadlines or timeliness requirements; and
(3) provide demonstrable improvement in the performance of federal permitting and review processes, including lower costs and more timely decisions.
DOE and USDA must provide a report in one year describing their progress on the above; identifying additional measures to improve the permitting process; identifying cost recovery options to support the permitting process staffing and training requirements; and quantifying the time typically required for each permitting step.
DOI’s list of critical minerals has expanded from 35 mineral commodities and groups on the 2018 list to 50 commodities on the proposed 2021 list. The 2021 draft list adds nickel and zinc as critical minerals and removes helium, potash, rhenium, and strontium. Uranium has also been removed from the list because uranium has been defined as a mineral fuel which is expressly excluded from the critical mineral list. Otherwise, the expansion is due to DOI splitting the rare earth elements and platinum group elements into individual entries (instead of listing them as mineral groups).
The public may submit written comments on the critical minerals draft list until December 9, 2021.
This additional funding for critical minerals production and processing-related projects should be available and potentially awarded in mere months given the FY2021 appropriation.The overall impact of the tasks Congress has assigned to the Interagency Subcommittee, DOI, and USDA are likely to include reduced regulations and simplified, faster permitting processes. However, to pay for the faster federal critical mineral-related permitting and review process, permit application costs may increase. These funding and regulatory steps support long-term development of a reliable U.S. critical minerals supply chain, but do not immediately alleviate pressure on the critical minerals supply chain. And given the critical mineral-intensive nature of renewable energy resources, this pressure will likely only continue to increase as corporations seek to produce renewable energy-reliant products and as countries commit to ambitious climate change goals.
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Providing Legal Insight for Government Contractors