Would Minnesota mining end U.S. reliance on Russian nickel? Experts say probably not.

By: - March 30, 2022 8:00 am

NORILSK, RUSSIA — Molten metal flows throughout the day into furnaces. Norilsk produces over 85% of the Russian nickel and cobalt, about 70% copper and more than 95% platinum-group metals. Photo by Oleg Nikishin/Getty Images.

The usual arguments for copper-nickel mining in Minnesota are largely economic. Mining creates local jobs. It generates wealth for the state. It can even help fight climate change. As the demand grows for renewable energy and electric cars — whose lithium ion batteries are often made with nickel — the need for mining increases, with Minnesota ready to meet it. 

But as war rages overseas in Ukraine, a new argument focused on national security is gaining ground among Minnesota mining proponents. In an emotional appeal at a Minnesota Senate Mining and Forestry Policy Committee meeting earlier this month, Sen. Tom Bakk, I-Cook, pushed for higher prioritization of the Twin Metals mining project, which recently faced a major setback when the Biden administration canceled mining leases for the project near the Boundary Waters.

Bakk also called for a more transparent and efficient permitting process — in part to wean off reliance on other countries for these minerals.  

“I don’t want my grandkids to be dependent on China or Russia or some other country in the world,” said Bakk, who has represented northeastern Minnesota for more than 25 years, including the Duluth Complex where the proposed Twin Metals and PolyMet copper-nickel mines are. Previously a member of the DFL caucus, he became an Independent last year and recently announced he’s not running for reelection this year. 

Russia is one of the main suppliers of nickel to the United States, following Canada and Norway and on par with Australia. Russia’s Norilsk Nickel is one of the largest producers in the world — so large that no country has sanctioned it despite the Russian attack on Ukraine. Combined with the Biden administration’s commitment to increase domestic mining for materials that will help hasten the transition to electric vehicles, mining proponents hope this could be the push needed to greenlight Minnesota’s copper-nickel mining proposals, which have long been held up in litigation. 

Experts say investing in nickel mining in Minnesota, however, probably won’t end U.S. reliance on foreign countries for electric vehicle batteries any time soon — or maybe ever.

“Certainly there’s a case for increased production within North America in order to supply the incipient EV supply chain, but the challenge is it’s not just the mines,” said Alex Laugharne, a New York-based consultant with British commodity consultancy CRU. That’s because even after the nickel leaves the ground, it must undergo several forms of processing before it winds up in battery cells, he said. 

There is only one operating nickel mine in the United States — the Eagle Mine in the Upper Peninsula of Michigan, which produces raw nickel concentrate, the same product the PolyMet and Twin Metals mines would likely produce. This nickel is then sent to the nearest smelters — in Canada — and eventually some of the final product is sent back to the United States, primarily as stainless steel products. As of today, most of the world’s nickel used specifically for lithium ion batteries ends up in China, which makes about 80% of battery cells used for electric vehicles. 

Mining proponents in Minnesota, however, argue that the U.S. needs to reduce its reliance on hostile countries for minerals and bring some of this production back home. In his speech, Bakk evoked Minnesota’s proud history as producers of the steel that helped win WWII. 

“John Rockefeller once said that if it hadn’t been for Minnesota’s Iron Range, Germany would have ruled the world,” he said. “We’re sitting on a deposit of nonferrous metals that the world needs, and that our country needs. It’s another opportunity for Iron Rangers to make a contribution to the entire world.”

Other elected officials have chimed in, too. In response to a Wall Street Journal article on Norilsk Nickel, Sen. Justin Eichorn, R-Grand Rapids, posted on social media, “We need to mine in Minnesota! We have the natural resources and the workforce to do it. We are so dependent on Russian Nickle [sic] that we can’t even sanction one of their largest companies. This is a matter of national security and would be a massive boost to our economy!” 

At the beginning of the month, Rep. Spencer Igo, R-Grand Rapids, wrote a letter to President Joe Biden, signed by several other Republican lawmakers, asking him to reconsider opening the Keystone XL pipeline and reverse cancellation of the Twin Metals mineral leases. 

“Now, more than ever, it is important that America pursues energy independence,” Igo concluded the letter. “Relying on hostile nations like Russia and China for critical materials needed for the American economy to function puts our nation, and other peace-loving nations, at risk. We urge you to unleash the American energy and mining sectors so that we can once again be the global leader in procuring these important commodities.”

Politicians from other mineral-rich states have also spoken out since the crisis in Ukraine. On March 11, Sens. Lisa Murkowski, R-Alaska, Joe Manchin, D-W.Va., Jim Risch, R-Idaho, and Bill Cassidy, R-La., wrote a letter to Biden asking him to invoke the Defense Production Act to domestically produce and process crucial minerals for things like batteries.

Uncertain status of Minnesota mining projects

Twin Metals and PolyMet are the two largest proposed nickel mines in Minnesota, but neither have ever completed the full permitting process, despite years of trying. In January, the Biden administration dealt a major blow to Twin Metals, canceling two federal mineral leases for the mine, which would be near the Boundary Waters Canoe Area Wilderness. 

Just two days earlier, the Minnesota Court of Appeals dealt its own blow to PolyMet, reversing a water-pollution permit and delaying the project. 

It’s unlikely that either mine will be greenlit any time soon, but even if they were allowed to open tomorrow to help shore up domestic mining, their output would not be enough to end any reliance on importing, according to Adrian Gardner, an analyst specializing in nickel at the research firm Wood Mackenzie. PolyMet, he explained, would likely produce 3,000-4,000 tons of refined nickel per year, while the United States consumes about 120,000 tons annually — about how much Norilsk Nickel in Russia produces in a year.

“Is it going to make a difference? In short, no,” Gardner said. “But it’s not a question of whether it would make a material difference if we got this mine working or that mine working. The bigger question is one of whether the U.S. should rely at all on others for nickel and cobalt resources to satisfy the future need for battery materials, when domestic battery recycling can fulfill many of the net additional requirements in the near term.”

On this front, mining proponents may have more support from the Biden administration. In February, the administration announced greater investment in domestic mining and processing to end the country’s heavy reliance on China.

Included in the White House fact sheet on the investments was a deal announced earlier this year between Tesla and Talon Metals Corp. to buy nickel from the proposed Tamarack mine in northern Minnesota. It’s the first mine proposal in the state to make such a deal, but the proposal is in the early stages, and Talon Metals has yet to even apply for permits. While the deal was touted by both companies, the agreement could end if the mine isn’t running and producing metals by 2026 — an unlikely outcome considering how long it has taken Twin Metals and PolyMet to get permits and complete environmental reviews.

Sulfide mining opponents argue that greater priority should be given to increasing recycling of metals and electric vehicle batteries, though experts say mining and recycling will always need to exist together. The present amount of recycled electric vehicle batteries will not be able to meet the growing demand for new vehicles, but it could decrease the amount of new mining needed. 

With the lack of infrastructure to process metals like nickel in the United States today, Gardner says, it’s not likely the country will shift to an all-domestic mining and processing operation — nor is it economically feasible.

“The main investments taking place within North America today are the battery recycling end of the spectrum, which is quite a long way away from mining,” Gardner said. “But it is much closer to keeping all of those nickel, cobalt, copper units within North America as a whole to feed this demand for nickel in rechargeable batteries for automotives.”

While new mining will still be needed to fulfill the demand for electric vehicle batteries, many companies are investing heavily in recycling. Earlier this month, for example, Mercedes-Benz announced it is opening a battery assembly plant in Alabama and has plans to build recycling plants in the U.S. eventually to recycle used batteries and all the scrap generated by manufacturing the battery cells to begin with. 

Aaron Klemz, the chief strategy officer for the Minnesota Center for Environmental Advocacy (MCEA), argues for greater investment in domestic recycling over mining and expanding existing nickel mines to fill in the gap rather than opening new ones. 

“We don’t have the capacity to create those supply chains in the United States beyond the mine itself,” Klemz said. “What materials do we need, and where can we get them the most efficiently and with the least amount of impact? It starts with recycling. I know that wouldn’t be the only solution. We need mining to fill the gap. But if we start by looking at our pretty abysmal recycling rate in the United States and move from there, we can make much faster progress.”

MCEA has been working on copper-nickel mining proposals in the state since the 1970s, and has opposed several projects including Twin Metals and PolyMet. Klemz said they always see renewed interest in these mines when the price of minerals goes up in the global market. Nickel prices soared over 250% earlier this month, in part due to the crisis in Ukraine, and have continued to surge since

What many Minnesota mining opponents and advocates agree on is that the U.S. should invest more domestically in the transition to electric vehicles. The question is where those investments go and which countries — and to what extent — the U.S. will continue to rely on. 

With Canada a major producer of nickel, Laugharne said it makes more sense to think about keeping nickel mining and production within North America, rather than just within the U.S. According to Laugharne, right now North America mines enough nickel to meet some industry forecasts of the nickel needed to domestically produce electric vehicle batteries through 2030. But that would require all the region’s mined nickel to be used for this purpose. As of now, nickel is used for a variety of purposes, including producing stainless steel. 

Klemz agrees the conversation about where our minerals come from is necessary, but says the war in Ukraine is a cynical reason to raise the issue. 

“If this moment can be used to leverage this broader conversation across our economy to think more broadly about where we get these resources that we need, that would be great,” he said. “But that’s not what we’re seeing right now in a lot of the talking points that are coming out, whether it’s the oil industry arguing we should ‘drill, baby, drill’ as fast as possible or the mining industry arguing we should ‘mine, baby, mine.’ Neither of these approaches are actually going to have an impact on this moment.”

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Colleen Connolly
Colleen Connolly

Colleen Connolly is a Minneapolis-based bilingual journalist writing about immigration, education, Latin America and other issues. Connolly has also worked as a digital news editor at the Chicago Tribune and NBC Chicago.