Numlock Sunday: James Temple on the mine with 2.4 million vehicles in it
By Walt Hickey
Welcome to the Numlock Sunday edition.
This week, I spoke to James Temple, who wrote “How one mine could unlock billions in EV subsidies” for MIT Technology Review. Here's what I wrote about it:
A single nickel mine in Minnesota has the potential to unlock an enormous amount of electrification, and with that will come billions of dollars in subsidies bundled into the Inflation Reduction Act. This includes $55.1 million in credits for processing the ore, $126.5 million for the nickel that ends up in battery cathodes, another $8.5 billion for the manufacture of batteries and then $17.7 billion for consumers that buy one of the 2.4 million vehicles that can be produced with the nickel from the one Talon Mine.
This story was fascinating to me, and was the first in-depth story about the implications of the incentives in the Inflation Reduction Act that really illustrated to me how this thing works and how this stuff really matters.
This interview has been condensed and edited.
James Temple, thank you so much for coming back on.
Thank you so much for having me again.
You wrote a really fascinating pair of stories over at MIT Technology Review. Folks will probably remember you from the last time that we chatted, when we talked a little bit about the history of solar energy out in Hawaii. And while people talk conceptually and big picture about the transition to green energy, you are a nuts and bolts guy on this. You are covering actually how this stuff gets done, and I just love that. What drew you to this mine?
Yeah. Well, first off, thanks for saying that. I really appreciate that. One of the nice things about being here at MIT Tech Review is we just, by virtue of our audience and our subject matter, we have focused our climate coverage around climate solutions and just the nuts and bolts, as you say, of what needs to be done to actually address the rising risks on anywhere near the sort of time frames and scales required.
This process actually started over a year ago. I mean, I did plenty of other stuff in between, but we just started getting more interested in what was going on in terms of critical mineral mining because they are the raw ingredient for so many components of the clean energy transition. We are seeing these looming shortfalls if we don't increase the amount of mining we're doing and processing of the particular ingredients needed for batteries, solar panels, wind turbines, et cetera, and everywhere.
I'm based in the U.S. and so here in particular, I just started seeing more stories about the sort of community conflicts that these things were generating, which are often articulated on environmental grounds. And I think there's just this growing tension between national and global climate goals on the one hand, and the potential environmental side effects of doing the sort of mineral extraction and infrastructure development that's going to be required to do all this stuff.
I think mining is a particularly difficult example because there's such a legacy of environmental destruction in the past associated with the industry. There's so much mistrust of the industry and there's a lot of talk in the industry about finding ways to do this business in cleaner ways, and a lot of experimentation and exploration underway on how to go about it. But it's still a pretty big uphill battle to rebuild trust. So there are just a lot of themes here that were interesting to us and we wanted to explore.
The numbers really kind of help in understanding why these projects need to exist. I think a lot of time when you think about these raw extraction things, it can be very nebulous as to where they go. This stuff disappears into the supply chain very quickly and it can be kind of difficult to understand what a specific project does.
Whereas I really appreciated this story because obviously nickel is one of the key limiting reactants to make this energy transition. And you just lay it out: The Talon mine has 2.4 million vehicles’ worth of nickel in it, and that is a hard number that we are going to have to pull out or forego. It was fascinating to say we can directly attribute this project to these specific climate outcomes that we want.
Yeah, no, I appreciate your saying that as well. And I think, yeah, at the beginning of the project, I wasn't sure what the numbers were going to show. I wasn't sure how much detail we would be able to get into. I wasn't sure if we'd be able to get it down to the vehicle level and the actual consumer tax impacts of all of this. So it was really useful and interesting and a process to work with Bentley Allan at Johns Hopkins, who is an expert in these sorts of things and has done numerous explorations of this sort to see what he could discover just starting with the numbers in Talon Metals’ original report, their preliminary economic assessment.
The other thing that I felt like we ended up doing along the way, and I somewhat set out to do this, but I didn't really understand how the IRA works, right? Some of these stories have been written that just talk about it in terms of these hundreds of billions of dollars and 10 percent operating cost tax credits and all that. It's such a big and complex set of laws that it can be kind of befuddling how it all really works and how these pieces fit together. I thought just by examining point by point, step by step along one supply chain, we ended up inadvertently also creating a kind of primer for just how the IRA really works on the ground.
It's a very sophisticated piece of legislation. They always tout the big numbers at the beginning and end of the conversation about it, but seeing what these actually translated into was really interesting.
The first story that you wrote was very much about how this project is controversial, as all mining projects are. You wrote a little bit about how, and to some extent why, this project is different than other things that have happened before, that there's a cognizance that the strip-mining style is not a viable path forward, particularly in the United States. But do you want to talk a little bit about what's up for discussion here and how this process has been navigated within Minnesota?
To start, if you take Talon Metals’ position on it, they think that what they've discovered is this rare and particularly rich, dense resource, one of only two nickel mines of significance discovered this century. And that given the clear need for it and the looming shortages of that critical mineral in particular, given the rising demands for batteries and EVs in particular, this is just a resource that we have to take advantage of; that if we want to meet climate goals, we need to do it.
And as we get into the story, the other issue underlying this and some of the politics that pushed along the passage of the IRA is that China dominates the production of a lot of these minerals. And the U.S. is working very hard striving to reduce its reliance on these things.
They very much insist that they can do this in cleaner ways than mining has been done in the past. They say they're doing more community outreach. They say they have had an open-door policy hearing out the concerns from community members, trying to talk with Indigenous groups about their concerns, laying out what they're going to do in terms of the efforts to address the concerns around contaminating water supplies there.
On the other hand, you have community members who are very concerned. This is a very water-rich region, with I think thousands of lakes in the county alone, or at least hundreds, and a lot of interconnected water bodies. And so whatever comes out of this mine will go into these other adjacent water bodies and rivers and streams and lakes, and these are precious resources to the people in this area.
It's a core part of the economics. It's what draws tourists and boaters and fishermen to the area, and there are a lot of cabins and homes that surround these idyllic lakes. So these people are very concerned for that reason. And then there's this additional layer that there’s a wild rice that only grows in this particular part of the country that is core to the cuisine and culture of several Indigenous groups in that area. And it has been closely studied that increased sulfate levels can have impacts on the productivity of that particular rice, called manoomin. And so there's a real concern that the mine, if it's not done in the right way, or if there's just inadvertent spillage and other things, that you could have a really devastating effect on this core thing. So on one hand, you've got Talon Metals talking about a precious resource, and you also have these Indigenous groups talking about a precious resource of their own. And there's just concern that the exploitation or extraction of one could come at the cost of the other.
Yeah, I don't want to hype it up too much, but this kind of conversation keeps on coming up, particularly in light of a lot of the energy transition stuff, in light of development. It seems like this is becoming an issue not only that is going to be very, very major and front of mind for a lot of people, but one that increasingly does not fall along the traditional fault lines of the right and the left, or at least has not yet been captured by that. I recall our conversation on Hawaii a year or so back, and whether it's the NIMBY versus the YIMBY, whether it's the development versus not, whether it's the environmentalist versus developer, this fight is accelerating in a lot of different places, right?
I guess my question is, given a very thorough understanding of the IRA as it works on the ground, legally speaking, have changes kind of happened that have given one of the potential points of view an edge in this conversation moving forward?
That's a good question. I mean, I think what you could say in terms of there being a nexus between the IRA and these kinds of debates, I think that what the IRA does is create that much more of an incentive for companies to get these projects approved and passed, right? Taking it as a base level, there's going to be this controversy and that controversy is going to slow down the development process. If you do the math and figure, well, it's just not going to be worth it if we get X amount of dollars in the end given X amount of time and X amount of money that needs to go into the project up front, maybe we're not going to do it. It's possible that the IRA can be the difference. Although, to be clear, the IRA does not, at least in the current interpretation, apply to mining, but it would apply to the proposed processing of critical minerals, or processing plants, for instance.
But it could also apply to the amount of money that battery manufacturers are going to get, the amount of cars and the amount of consumers who could benefit if they buy EVs down the road. And so it could change the numbers in that way. It's such a big piece of legislation. It's difficult for me to say there's something not in it. I just don't know every aspect of it. But I don't think that it doesn't, for instance, streamline the mining approval process or anything like that. And in fact, there was this whole debate around it when it was first passed that Manchin, as part of the approval, wanted Democrats to come together and pass some project streamlining.
Yeah, the permitting stuff, right?
Right, that would make it easier to get things through. And a lot of people will say that that's kind of the missing piece here. I mean, again, this is depending on your perspective, but for all the money you're putting into this stuff, we're not going to speed up the energy transition that much if we don't also take steps to make it easier to get some of these things moving faster. Because we just see again and again and again, as I say often, valid and virtuous reasons that are in opposition to these things. But in effect, it just means that projects can get bogged down for years. I’ve lived in California the entire time I've been a journalist. From some of my earliest years as a journalist 20 years ago, I wrote about the California high-speed train from San Francisco to L.A. The thing is still not built.
We can't take 25 years to not build a project given the carbon budget that we face. And the fear is, whether it's yes or no, we just need to be able to make decisions faster on these kinds of things and figure out where we can build and where we can mine and process minerals. It's just a staggering amount of things that we are going to have to build if we do want to address these challenges and move away from the dirty legacy ways that we generate energy and move people and products around the world.
Yeah. It is wild that there's a pretty good chance that you guys are going to have another Olympics before you actually have high-speed rail.
Indeed. Right. I wrote a whole story about that at one point, as well, just the challenges of getting anything built.
Yeah. So I guess just to wrap things up, what is your takeaway from the story for folks who are interested in navigating the politics of climate change as it works on the ground?
Yeah. Well, it's a really challenging topic. It's hard to come away with a clean, easy conclusion, and any story that promises you one just may not have dove deep enough into the topic. I mean, there are deep and real trade-offs that we face here. And I think that when it comes to mining in particular, what we have to do is just ensure that to the degree that the governments are giving mining companies the right to move forward with projects like this, we also want to make sure they are doing their part to ensure that there's an open dialogue at the front end. That there's a sharing of resources; that they are, in fact, both agreeing at the front end to do these things in ways that limit the environmental damages as much as possible, and that they are held to those agreements throughout the process.
And there are certainly areas that are just too precious, where there will be damages that are just too great. But we also know that to achieve some of the climate goals we need to achieve, we're going to have to dig up more stuff somewhere. We're going to have to build renewable plants somewhere, batteries somewhere, EVs somewhere, and we have to get a little bit beyond just the knee-jerk yes/no to all of these things.
Well, that is a lovely nuanced take, and again, I really enjoy the stuff that you do. Where can folks find you?
If you have anything you’d like to see in this Sunday special, shoot me an email. Comment below! Thanks for reading, and thanks so much for supporting Numlock.