The United States is facing significant challenges in developing new mines for critical minerals that are essential for the energy transition, according to a recent report by S&P Global. The report, titled ‘Mine Development Times: The U.S. in Perspective,’ highlights that the United States has the second longest lead times in the world for bringing new mines into production, with an average development time of 29 years. Only Zambia has longer lead times, with an average of 34 years.
These lengthy lead times are in stark contrast to the United States’ substantial resource base. The country’s copper endowment, which includes reserves and resources of over 275 million metric tons, is comparable to the combined resources of Canada and Australia. Additionally, the United States’ lithium endowment, with over 43 million tons in reserves and resources, is more than double that of Australia, which currently accounts for half of the world’s lithium production.
Daniel Yergin, Vice Chairman of S&P Global, emphasized the significance of these findings, stating, ‘This new analysis underscores a fundamental challenge for the energy transition. Building the new infrastructure and adopting new technologies in the pursuit of Net-zero 2050 goals will greatly depend on reconciling surging demand with long lead times and other challenges presently encountered in scaling up supply of critical materials.’
The report also reveals that the United States receives significantly less investment in mining exploration budgets compared to its advanced economy peers. Over the past 15 years, mining investment has been 57% higher in Australia and 81% higher in Canada. While Canada’s average lead time (27 years) is only slightly better than that of the United States, the greater certainty that Canadian projects will ultimately reach production may explain the higher investment they attract.
S&P Global’s report draws on the expertise of its Commodity Insights and Market Intelligence divisions, utilizing the proprietary Global Metals and Mining database. It is part of a series of research focused on the supply and demand for metals and critical minerals essential for the energy transition. Previous studies by S&P Global have highlighted the need for a significant increase in global copper demand to deploy technologies crucial for achieving net-zero by 2050 goals. Additionally, the report predicts that U.S. energy transition-related demand for lithium, nickel, and cobalt will be 23 times higher in 2035 compared to 2021.
The report examines 268 mines worldwide to determine average development times from discovery to production. While most of these mines are already operating, some are still in development and not yet productive. The report assumes a start-up date of 2030 for these non-operating mines, providing a consistent basis for capturing their development times. It also highlights that only three mines have come into production in the United States since 2002, while 10 additional non-operating projects have remained in development for several decades, with one project dating back to 1978.
Mohsen Bonakdarpour, Executive Director of S&P Global Market Intelligence, emphasized the vast reserve of critical minerals in the United States, stating, ‘This latest research further illustrates that the United States has a vast reserve of critical minerals. Pre-production value of the 10 U.S. mines still in development, though not yet operating, represents a value of more than USD 100 billion worth of copper, gold, lithium, and zinc.’
The S&P Global report sheds light on the challenges the United States faces in developing critical mineral mines for the energy transition. Addressing these challenges will be crucial for meeting the growing demand for critical minerals and ensuring a smooth transition to a sustainable energy future.