Minerals Drive the Auto Industry

About 73 percent of chief executive officers revealed that their businesses face minerals and metals scarcity

Hal Quinn
Hal Quinn

As new models of high-performance, innovative and more efficient American cars debut at auto shows across the country, the future of the U.S. auto industry looks bright. Yet the companies developing these next-generation vehicles are increasingly concerned about their ability to procure the materials vital to every car on the road: minerals.

From iron used in auto body frames to molybdenum in airbags and lithium in hybrid vehicle batteries, a growing variety and quantity of minerals is fundamental to the future of the auto industry. Last year, carmakers used $7 billion worth of platinum to develop catalytic converters, a vehicle’s primary device to lower emissions. Aluminum—a strong, lightweight metal—is being used in the design of lighter vehicle bodies that contribute to fuel efficiency. For every 10 percent reduction in vehicle weight, a 6 to 7 percent improvement in fuel economy is realized, which means less fuel consumption and lower emissions.

But 73 percent of chief executive officers (CEOs) in the automotive industry revealed that their businesses face minerals and metals scarcity, according to a 2011 PricewaterhouseCoopers (PwC) study. Contributing to the procurement challenges faced by manufacturers is the fact that, despite the central role minerals play in technological advancements, the United States lacks a comprehensive minerals policy. An outdated and inefficient permitting process is effectively locking much-needed minerals in the ground and out of the hands of high-tech innovators. As a result, U.S. companies currently rely on foreign imports for more than half of their mineral needs. This means they’re often faced with unstable supply chains, regardless of the more than $6.2 trillion worth of minerals located right here in the U.S.

As manufacturers produce increasingly advanced automotive products, demand for minerals is expected to soar and competition for resources to grow fierce. For years, the U.S. Department of Energy flagged insufficient access to minerals as a concern; the department’s Critical Materials Strategy identifies several minerals that are “at risk of supply disruptions,” and are vital to electric vehicles and other innovative technologies.

Fortunately, policymakers are beginning to take action to facilitate the development of strong, stable supply chains of domestic minerals that would provide much-needed predictability and reliability for manufacturers across the country. For example, last year, the House of Representatives passed bi-partisan permit reform legislation—the National Strategic and Critical Minerals Production Act—that would ensure efficient, timely, and thorough permit reviews and decisions.

While encouraging domestic production, this bill would not in any way minimize the environmental review that is an important part of the permitting process. To the contrary, the legislation encourages better interaction and coordination among the multiple federal and state agencies involved in permitting. The Senate recently turned its attention to our nation’s mineral policy and the nation would be well-served if that body also assured that we have a 21st Century permitting system to match the 21st Century realities of resource competition.

If allowed to perform to its full potential, the U.S. mining industry can help assure that the American auto industry continues leading the way in innovation. It’s time to call on legislators to streamline minerals mining permitting and make this a reality.