Adam Johnson’s Post

The opportunities and challenges with establishing robust and competitive critical mineral supply chains is not only the central focus of my career, it is also foundational to the everyday lives of people everywhere. It has been in focus this week as the White House established substantial trade policy intended to protect and develop these capabilities in the form of extensive new tariffs that will reverberate in many ways over the coming years. In hopes of contributing towards a meaningful solution, I've been working with John Jacobs and the Bipartisan Policy Center to draft a research paper on this topic. We started this effort in Q3 of last year, interviewing many knowledgeable people working firsthand to address these topics across industry, investing, policy, as well as the ultimate customers. To those people, I am very grateful for their time and openness. This is only the beginning, and there is so much more to learn and understand. I don't anticipate the pace of change slowing down. So, I look forward to future opportunities to interact with and learn from the many great people I've gotten to know who are also compelled to contribute their work and time to this issue.

It was wonderful speaking with the Malaysian Members of Parliament yesterday on the topic of accelerating their ecosystem for critical minerals. Grateful to AMCHAM Malaysia (American Malaysian Chamber of Commerce) and the U.S. Embassy Kuala Lumpur for inviting me. It is inspiring to support these efforts, facilitating collaboration based on ideals with a long-term view.

Siege of Renault In the midst of the global shift towards electric vehicles (EVs), I find the narrative coming from Renault to be utterly visceral. In the past 12 months, their Chairman and CEO have both spoken passionately in a tenor befitting a wartime leader, shifting between hopes of resurgence and fear for survival. This may be emblematic of the broader Western EV industry. Luca de Meo, Renault's CEO, recently shared his vision of a European "Marshall Plan" for EVs, calling upon an effort and investment similar to post WWII reconstruction efforts. Reconstruction comes after devastation. This means in de Meo's view, the damage has already occurred. We're living in the fallout. It's time to rebuild. It's no surprise to hear this now, given last June, Renault Chairman, Jean-Dominique Senard, sounded the alarm on a pressing existential threat, saying, "The war of the future will be a war of metals." His concerns underscored the precarious reality, that the lifeblood of the EV industry could be throttled by geopolitical whims. This is not just a matter of supply chain planning; it’s a strategic dilemma that could dictate the fate of entire industries, and may have already done so if de Meo's calls for a "Marshall Plan" are any indication. We can easily write this view off as a failure to innovate by a single company, but the endemic nature of this issue implies something else. Every Western OEM is expressing versions of the same story. Additional background reading:

Complexity and Unrealized Opportunity in Africa Over the past week, I've had many conversations on this topic. The urgency for a just transition to clean energy is increasing across Africa. I'm hearing from leaders calling for equitable benefit-sharing in the extraction and management of energy transitional minerals. African countries, endowed with vast reserves of critical minerals like cobalt, manganese, and others, are at the forefront of this dialogue. The challenge I'm hearing continues to center around pragmatic ways to achieve aligned incentives while moving at a pace sufficient to achieve momentum without disregarding risks. These minerals, while pivotal for clean energy, bring with them challenges of potential exploitation, environmental destruction, and human rights violations. The need for responsible mining and sustainable practices has never been more pressing. This context underscores the critical nature of many discussions simultaneously occurring across the public and private sectors within Africa. This evolving landscape presents an opportunity for African nations to redefine their role in the global transition to clean energy but it will not be easy, and requires engaged efforts coordinated from across Western governments, investment firms, and industry experts. For African nations, leveraging mineral wealth in a manner that ensures long-term sustainability, ethical practices, and equitable benefit-sharing, can pave the way for a future that aligns with the goals of environmental preservation, economic growth, and social justice. For Western nations, this call for partnership represents an almost incalculable opportunity to assert global leadership and ensure our own successful energy transition. For additional reading on the topic: https://lnkd.in/gTq-37JR

Nickel on the Frontline The nickel industry is in a fascinating state. The challenging market conditions and debates over integrating ESG factors into pricing open many complex topics. The London Metal Exchange recently rebuffed calls for a "green" nickel contract, which would offer different pricing for nickel produced traceably with certain undefined ESG characteristics. The pursuit of lower carbon footprints, less waste, healthy working conditions, engaged and empowered community stakeholders, and other ESG considerations are both a moral imperative and a strategic necessity for mining. Yet, leveraging this moral imperative to gain pricing parity may not work as intended by advocates looking to make higher cost projects competitive. One of the inherent challenges with using a green nickel contract to achieve price parity is its likely dependency on the pricing dynamics of the underlying nickel market. This linkage means that while a green nickel contract aims to represent a premium for sustainability, its value and fluctuations would still be closely tied to the broader market dynamics of nickel. The interdependence could actually dilute the distinctiveness of the intended "green" premium, as broader market volatilities and supply-demand fundamentals in the traditional nickel market would continue to exert a significant influence. Introducing a green nickel contract does not inherently make qualifying projects more attractive to customers, especially if their priorities are cost-centric (i.e. it doesn't resolve the underlying issue of demand). As a commodity that goes into products that go into other products, cost considerations often outweigh sustainability criteria. This is particularly true when downstream businesses face their own competitive pressures and across-the-board cost containment challenges. Time and adaptability also hurt the approach of attempting to use a green contract to gain price parity. If qualifying ESG standards for a green nickel contract are well defined, global competitors can also meet those requirements. This is especially true if there is a premium to capture. Indonesia can produce to well-defined ESG standards if there is a premium to be made, I'm certain of it. Acknowledging these challenges does not diminish the importance of ESG in shaping the future of nickel or other mining production; rather, my intention is to call for a more nuanced and competitive strategy. The industry's path forward necessitates a focus on operational efficiencies and technological innovation to drive willing head-to-head competition, while also leading in sustainability and other ESG factors. For additional reading on the topic: https://lnkd.in/gQg2Nbtp

The Opportunity Ahead for Critical Minerals The steep decline we’re seeing in critical mineral prices, has cast a shadow over the critical minerals and mining sectors. This situation has compelled some operations to be put into care and maintenance like the Avebury nickel mine in Tasmania and Wyloo Metals' Kambalda mine in Western Australia. This downturn, exacerbated by an oversupply of nickel from Indonesia, underscores the pressing need for immediate, concrete actions within 2024 to stabilize the industry and mitigate further impacts. It is important to accept that things could get significantly worse before they get better. This is not only the reality for nickel, but current market conditions may be hurting the opaquer markets like rare earths and other non-listed specialty minerals worse with prices for many of those declining further following the Chinese New Year in February. Given the challenging market dynamics, governments, alongside industry experts and private capital partners, could and should expedite a cohesive strategy targeted at mining, processing, and the conversion of these minerals into advanced materials. This should go beyond battery minerals and materials, which is only part of the problem. A broader and more aggressive critical minerals initiative is needed because there are many nuanced co-dependencies that exist across these supply chains that make for a holistic competitive industry such as suppliers (reagents, consumables, equipment, etc.), labor, concurrent availability in ores, and others. This is the time to be bold and commit. China knows this. They plan to more double the number of critical mineral mines they own overseas according to GlobalData, and their natural resource exploration budget increased again in 2023 to $15B USD. This current downturn in the critical minerals market presents a pivotal opportunity for a strategic reset. As industries and economies grapple with the ramifications of declining prices and operational suspensions, the moment is ripe for a bold approach from forward-looking leadership in the space. This is underscored by the ambitious strides of global competitors like China, signaling a clear call to action for the rest of the world. Embracing this opportunity mindset, we can transform this moment of apparent crisis into a catalyst for a resilient, diversified, and flourishing critical minerals industry. Additional reading: https://lnkd.in/gvEyrJSp

I recently had the opportunity to speak with Gracelin Baskaran, PhD for Center for Strategic and International Studies (CSIS) on their Energy 360 podcast. In the conversation, we covered how I got into the rare earth industry, critical minerals' role in the energy transition, and the importance of these minerals in modern technologies. We also discussed the geopolitical implications of mineral supply chains, particularly China's dominance across the value chain. Related to the importance of these supply chains and the complexity of competition, we also delve into public-private partnerships needed to enhance the sector's sustainability and competitiveness. The challenge of mine financing, especially given the current market cycle, increases the significance of government policies and their impact spurring private investments. There is no single answer, but it is always good to begin with a thoughtful conversation about the issues.

Critical Minerals, a Cornerstone of Innovation Securing robust supplies of critical minerals is crucial for the United States' technological competitiveness, touching upon the future of quantum computing, advanced energy storage, biotech, nanotech, space exploration, and sustainable infrastructure. This is about more than the supply chain for EVs in 2026. It is about technological competitiveness at large. Our innovators and entrepreneurs need these materials at scale to invent and secure investors for breakthrough technologies. Quantum computing's leap forward relies on minerals like ytterbium for stable qubits, influencing potential innovations in materials science, including high-temperature superconductors. This could revolutionize energy transmission and computing. In energy storage, beyond lithium-ion, the exploration of technologies like solid-state and lithium-sulfur batteries, powered by minerals such as lithium, vanadium, and zinc, promises higher efficiencies and sustainability. Innovation on this is core to integrating renewable energies into the grid and advancing consumer electronics. The intersection of biotechnology and nanotechnology, utilizing rare earth elements, could transform healthcare and environmental management with advancements in drug delivery systems and nano-robots for precision tasks. This convergence is dependent on the strategic availability of critical minerals, vital for developing bio-compatible materials. Space exploration's future, including sustainable missions and in-situ resource utilization on celestial bodies, relies on these minerals for developing advanced propulsion systems and habitats. The potential of asteroid mining underscores the importance of extraterrestrial mineral extraction for space industrialization. Sustainable and smart infrastructure development, leveraging critical minerals, can lead to self-healing structures, efficient solar panels, and smart roads that charge electric vehicles. Integrated with IoT and AI, this approach aims at reducing urban carbon footprints and creating responsive, sustainable cities. These envisioned technologies underscore the strategic importance of diversified and robust critical mineral supply chains at significant scale. As our innovative entrepreneurs and inventors venture into these transformative spaces their competitiveness relies on critical mineral foundations. Additional great reading, and the importance for a new narrative and other topics from Daniel F. Runde and Austin Hardman at Center for Strategic and International Studies (CSIS): https://lnkd.in/gYptQuba

Critical Minerals: a Top Ten Risk in 2024 The significance of critical minerals' inclusion in TIME's global risk landscape of 2024, amidst other major challenges like climate change and geopolitical strife, is due to their essential role in modern society. These minerals are crucial for the global energy evolution, which has a profound impact on climate change and technological progress. Lithium, copper, and rare earth elements, integral to modern energy technologies such as solar panels, wind turbines, and electric vehicles, are at the forefront of efforts to reduce carbon emissions. This transition, vital for environmental sustainability, hinges on the steady supply of these minerals. But, there is much more at play. The concentration of critical mineral extraction in a few nations, including China, Australia, and the Democratic Republic of Congo, introduces complex geopolitical dynamics. Countries dependent on these minerals for technological and defense industries face strategic vulnerabilities, leading to heightened global tensions as nations vie for secure access. These minerals profoundly impact global supply chains across various industries, from defense to advanced electronics and mobility. Disruptions in their supply can lead to increased production costs, delays, and even the potential for hindered innovation, thus affecting global economies. The ensuing scramble to secure resources is reshaping international trade, with countries striving to diversify sources and bolster domestic capabilities. But the debate is multifaceted, with many voices airing concerns associated with the production of these minerals and materials. The mining and processing of these minerals raise environmental and social issues in many cases. The potential for environmental impacts, including habitat destruction and pollution, coupled with human rights considerations in mining regions, add ethical dimensions and greater complexity to their sourcing. Ultimately, critical minerals are pivotal for technological advancements and innovation. They are key inputs enabling almost every industry, including computing, telecommunications, and defense. As technology evolves, the demand for these minerals will surge, ensuring their continued emphasis in global debate. The prominence of critical minerals in the 2024 global risk landscape is justified by their deep and complicated significance—spanning environmental, geopolitical, economic, social, and technological domains—and their indispensable utility to all people in the contemporary global order. Background article: