Washington Wants a White Gold Rush

Thousands of miles west of Washington, D.C., in the sprawling, lithium-rich expanses of Nevada, the Biden administration is pushing for a mining boom that it hopes will boost the country’s energy security.

Few minerals are as crucial to the global energy transition as lithium—also known as white gold—which underpins the powerful lithium-ion batteries in many of the world’s green technologies, including electric vehicles and wind turbines. Given its importance, demand for the mineral is projected to explode in the coming decades, according to the International Energy Agency. 

Washington’s problem is that it has been out of the lithium game for decades. Despite having some of the world’s biggest lithium deposits, the United States is home to just one operational lithium mine: Albemarle’s Silver Peak mine in Nevada, which today accounts for a minuscule fraction of global production. But as demand has surged and fears have grown concerning strategic vulnerabilities, Washington has ramped up efforts to jump-start its domestic industry through the Biden administration’s Inflation Reduction Act and a raft of hefty investments in the sector. 

“The United States has very aggressive—and grandiose—ambitions with respect to lithium mining in particular,” said Chris Berry, the president of House Mountain Partners, an independent metals analysis consultancy.

In the Biden administration’s latest move, U.S. Energy Secretary Jennifer Granholm wrapped a trip to northern Nevada last week, where she toured American Battery Technology Company’s lithium-ion battery production facility. The facility is backed by a $115 million Department of Energy grant. 

“Nineteen companies have announced that they are opening because of the Inflation Reduction Act here, so it’s very exciting to be able to compete with China and really not allow all of these jobs to leave without us doing something about it,” Granholm told reporters.

Washington’s lithium push is just one part of a broader effort to build out its energy security and slash its dependence on rivals—namely China, which commands many of the world’s mineral supply chains. 

While the United States was once home to a robust minerals mining industry, the sector underwent a sharp decline in the 1970s, as mining companies struggled to stay afloat and outcry grew over the industry’s environmental and health costs. In the decades since, Washington largely saw mining as an industry that should be outsourced globally. But rising tensions with Beijing have changed that calculus. 

“The U.S. realized, recently, that it lost control of the lithium supply chain to China,” said Federico Gay, a lithium analyst at Benchmark Mineral Intelligence. Washington is now trying to “get back on track.” 

Today, the United States imports most of its lithium from Argentina and Chile, which—alongside Bolivia—form the so-called lithium triangle in South America. Yet China maintains deep investments in mines around the world, including in South America, and commands some 58 percent of global lithium processing. 

Washington has grown increasingly wary of that status quo. “We’ve been very happy importing it, particularly from South America,” said Gracelin Baskaran, a critical minerals security expert at the Center for Strategic and International Studies (CSIS). But that thinking has changed in the past decade or so, she said, as “we realized that minerals could be weaponized” and that “demand was going to be higher than we initially forecasted.” 

One of U.S. President Joe Biden’s biggest efforts to jump-start the sector can be found in the Inflation Reduction Act, his flagship climate bill that aims to boost the domestic critical mineral supply through hefty tax credits—prompting dozens of mining projects to spring up across lithium-rich Nevada, and dozens more across the country. 

The 2022 Inflation Reduction Act signaled to the battery industry that it’s time for “profound change,” said Tim Crowley, the vice president of government and external affairs at Lithium Americas, a mining company. “We’re talking about wholesale change, building really a new industry—one that we used to have in the United States, but we gave it away.” 

The Biden administration has poured billions more in investment into the effort, with more than $2 billion slated for Lithium Americas’ Thacker Pass project and $700 million to Ioneer Ltd.’s Rhyolite Ridge project, both of which are in Nevada. “Thacker Pass is a treasure trove of lithium—key to strengthening U.S. energy security and electrifying America,” Granholm posted on X, formerly known as Twitter. 

“You can feel a sense of urgency in the country now to want to get things done and get things solved, and it’s bipartisan, too,” Jonathan Evans, the president of Lithium Americas. 

Yet many challenges loom over Washington’s lithium ambitions. For one, there’s the problem of building the necessary talent pipelines as the U.S. mining industry grapples with a glaring labor crunch. Many of the country’s mineral riches are also located either on, or in close proximity, to Indigenous lands, stoking fierce protests when local communities have raised concerns of environmental harms, exploitation, and other impacts. 

Notoriously lengthy permitting delays also remain a major headache for the industry, compounding uncertainty for both investors and mining companies in an environment that is already known for its high risks.

“Permitting is a huge challenge,” said Baskaran, the CSIS expert. “Getting a mine permitted in the U.S. is borderline impossible right now.”

Lithium prices are also highly volatile, undergoing sharp swings that can flummox mining companies that are already grappling with where and how to begin mining operations that are economically viable on a commercial scale. Prices have plummeted yet again in recent months in a major downturn that has battered the stock prices of major miners. 

The combination of “falling lithium prices with high interest rates is not the best environment to attract financing for projects like this,” said Tom Moerenhout, a researcher at Columbia University’s Global Energy Center.

And mining itself is just one part of the equation. Once the lithium has been extracted, it must be processed or refined—a step that China has, for some two decades, dominated worldwide. Washington may find it more challenging to navigate that space, said Gay, the Benchmark expert. 

“The other huge difficulty in the U.S. is understanding the refining side,” said Gay. “On the mining side, I don’t see a huge problem from the U.S. because the U.S. has the know-how. But the refining side—and getting the right specifications—it’s very challenging on a technical level.”