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Nickel and Zinc added to US Critical Minerals List

On 16 November, the US Geological Survey (USGS) proposed adding nickel and zinc to the critical minerals list, which contains all those elements considered critical to the health of the US economy and provides vital information for industry, policymakers, economists, and scientists on the most important minerals when it comes to US supply chain.

The United States is aware that the demand for critical minerals is set to soar as more and more countries are pursuing the net-zero goals set out in the Paris Agreement. With most raw materials concentrated in the hands of a few countries, the US also intends to defend itself against possible disruptions in the supply of critical minerals. For this reason, the list has grown from 35 to 50 critical materials since its last iteration in 2018.

But why decide to include these two new elements?

According to the USGS, the US relies on refined nickel imports for around 50% of its annual consumption. Despite the top three suppliers being "friendly" countries; Canada (42%), Norway (10%) and, Finland (9%), Washington is concerned with its limited domestic nickel production (only one domestic nickel mine is operational in the US).

Moreover, nickel is changing its usage profile and is now used as a chemical component in electric vehicle batteries.

The combination of a limited domestic production and the expected growth in demand for nickel makes a “compelling case for the inclusion of nickel in the critical mineral list”, according to the USGS.

Regarding zinc, the US domestic supply chain is less fragile. The US can count on fourteen operating mines and three smelter facilities. Still, its refined import dependency is relatively high. Moreover, most of the world's zinc is produced in China, Washington’s most relevant competitor.

The USGS pointed out that zinc is above the quantitative threshold for inclusion in the list due to the increasing concentration of mine and smelter capacities globally. The threshold used by the USGS to determine criticality is 0.40, and zinc supply risk is in twenty-seventh place with a score of 0.48.

Since September 2021, the world has experienced global supply chain bottlenecks. The US intends therefore to further protect itself from possible major shortages, including in the raw materials sector.


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