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Ernest Scheyder is a senior correspondent at Reuters, where he reports on the clean energy transition and critical minerals. Those topics form the subject of his new book, The War Below: Lithium, Copper, and the Global Battle to Power our Lives, in which he travels around the U.S. and beyond to illustrate the issues around mining and producing the rare earths and other minerals that are vital to products from electric vehicles to smartphones. The book describes the trade-offs involved as the U.S. moves to rely more on clean energy, and the implications for local communities and environments. The following is a lightly edited transcript of a recent interview to discuss the book and its subject matter.

Q: Could you run through what you see as the major themes of your new book on critical minerals, The War Below?

A: The two main themes are community and choice. If we want the clean energy transition, if we feel that it is the best way to fight climate change, we have to be having a discussion about the tough choices around where, how and why we get the building blocks for all of these green energy devices: whether that’s electric vehicles, or solar panels, or cell phone batteries, or even household appliances that are increasingly being powered by batteries — including leaf blowers, which is the subject of a chapter in the book. 

What I saw when I covered the oil and gas industry years ago was that the average consumer is not necessarily clued into the long supply chains and complexities that go into the energy industry. When I transitioned to cover the minerals space for Reuters, I saw a lot of the same uncertainties about supply chains. The pandemic for many people brought forward the idea of supply chains, which perhaps were historically considered a boring or niche topic. It reinforced to a lot of people that supply chains matter, and where we produce the building blocks for our everyday lives matters, and especially so when it comes to the clean energy transition. 

I also wanted to bring the issue of community to the fore because this is a really people-focused book. This is not a book written for geologists, or investors. It’s a book written for everyone, because this is a topic that affects us all. It affects the indigenous communities in Arizona who are strongly opposed to a copper mine that mining giants like Rio Tinto and BHP would like to build. It affects conservation groups in Nevada, who believe that to dig out a lithium mine would destroy a rare flower found nowhere else on the planet. So the question becomes what matters more, having the lithium to fight climate change or protecting biodiversity? 

It matters to communities in the eastern United States near Charlotte, one of the largest U.S. cities, where there are plans to build an open pit mine, just outside the city limits in a bucolic farming paradise. Should we be digging up this land that would drain the local aquifers and strongly affect the huge farmer community there, where people grow food to eat? There are tough choices all around here. 

I purposely focused the book on projects mostly in the United States, because I feel like it’s an issue that the country needs to grapple with collectively. For too long, the United States has exported the production of many of the products that its citizens use every day. 

The book does look at other places in the world, including Bolivia, the Democratic Republic of the Congo. And yes, China, because China has spent the past 20 or 30 years building a strong infrastructure around not only mineral extraction, but processing as well. And it’s taking it all the way through to the manufacturing side. That has given China an advantage on pricing: if you use Chinese processed rare earths, for instance, in domestic Chinese manufacturing. That’s been a huge benefit to the country’s economy, and I would argue one of the main reasons why it’s the second largest economy in the world right now. How the United States and other countries dance with China on that complicated issue is also a theme of the book.

Take us back over some of the history: Somehow, 20 to 30 years ago, China realized that critical minerals could be a priority. Whereas in the U.S., there was a series of corporate and government missteps, that means they seem to have missed the boat. What happened?

One of the book’s chapters looks at a strategic blunder by General Motors that, for me, really crystallizes this issue. At the end of 2021, General Motors made a surprise announcement that it was going to partner with two rare earth companies to build rare earth-based magnets. If your eyes are glazing over, that’s okay: rare earth magnets are basically used to turn power into motion when they’re in an electric vehicle, you can think of them as the motor. The problem is that there were very few rare earth magnets made in the United States as of 2021. And so GM hoped to basically re-spark this industry. 

The interesting footnote, though, is that General Motors had actually helped develop rare earth magnets in the 1980s. And it sold the business off, because at the time rare earth magnets were primarily used for the motors that moved windows up and down or moved car seats back and forward, it was not necessarily seen as core to the business operations. So the decision was made to sell off that division. You can guess who ended up buying it — a Chinese company. The factory that was in the United States, in Indiana, ended up closing down and moving to China in the 1990s. 

There was a lot of uproar in Congress about this, but the deal went through. If you fast forward, here we are in 2023, and the electric vehicle transition is really taking off, and rare earth magnets are extremely important. China at the time was very prescient and could see the potential of this technology and decided to buy it. That’s just one example of the many steps that China has taken in the critical minerals space over the past 20 or 30 years to get for itself control, or near complete control of the extracting and processing of these critical minerals. 

…China has spent the past 20 or 30 years building a strong infrastructure around not only mineral extraction, but processing as well. And it’s taking it all the way through to the manufacturing side. 

Another benefit for China has been its ESG standards and its economic structure. For better or worse, the United States and countries in the European Union are democracies. And sometimes democracies can be messy and slow. You have a lot of different voices for and against proposed mines. In Europe, Serbia basically canceled a project from Rio Tinto to build one of the largest lithium mines in the world about a year and a half ago. And that’s just one recent example. 

The United States, especially, has not been favorable to some of the really tough and dirty waste products from rare earth mining. In the book, I talk about the Mountain Pass mine, which is just over the border from Las Vegas, in California. This mine has had a long history: it first opened in the 1950s and had a series of owners over the years that went bankrupt and had a lot of fines from the U.S. federal government and the state of California, because they were basically dumping toxic waste in various parts of the desert nearby and harming various wildlife. As you can imagine, that did not endear the company to the regulators or to the broader public as well. 

But those same ESG standards do not exist in China. There is a large rare earths mine in Baotou, that has a waste storage pit that’s larger than Central Park in New York City. That would not fly in the United States. 

What I’m fascinated by is where we go from this moment. That’s part of why I say that choice is a huge focus of the book, because there’s got to be a question about can we do it better. Can innovation help? Can different technologies help lessen or abrogate or diversify that Chinese power? That’s an interesting question that we’ll see moving forward.

It feels like the confusion in the U.S. reaches the highest levels in the Biden administration: There were contradictions within the Trump administration too. Could you comment on the high level politics around this topic and the tensions it is creating?

It’s rare that Washington speaks with one voice on a lot of issues, and, certainly, critical minerals are high on that list. There have been several key instances in both the Trump and Biden administrations, where one part of the government says one thing, and another part of the government says another. And so if you are a conservation group trying to fight a mine, or if you’re an executive trying to build a mine, it’s very uncertain. 

As an example, let’s just say you own 1,000 acres in Nevada, and you want to open a mine, you feel that there is a massive supply of lithium under there that that Elon Musk would love to buy from you. How do you start? How do you get the permits? What permits do you need? Who do you talk to? Do you talk to the state? Do you talk to Washington? Do you talk to indigenous groups? The process is so confusing and so myopic right now that it’s very hard to understand. 

A great example from the Trump era involves the Pebble Mine project and Alaska. It’s a massive deposit of gold and copper that would be one of the largest mines in the world if it were developed. It’s just off the Bristol Bay in Alaska, which is a giant salmon fishery. It’s had many folks for and against it over the years, and President Trump was for it. 

But then there was a quiet whisper campaign that started just as the 2020 Trump reelection campaign was gaining steam. Ironically, Tucker Carlson, the then-Fox News host, was very ardent about protecting Bristol Bay, because he likes to fish there, and Donald Trump’s son Donald Trump Jr. is also a huge supporter. And so here you’ve got a party, in the Republican Party, that ostensibly puts itself out there as pro-extraction, pro-mining and oil and gas. But what happened in the weeks around August 2020, was that you started to see delays, or other steps not being taken by U.S. federal regulators: And then finally, the Trump administration basically put the knife in the project, which was a huge shock, because President Trump had talked about producing more critical minerals in the United States. That sent a very mixed signal to the investment, conservation and mining communities. 

With Biden, the example for me is even more stark. It’s in Nevada, and it’s the proposed Rhyolite Ridge mine from a company called Ioneer. The deposit of lithium there that the company would like to extract sits below a habitat for a rare flower known as Thiem’s buckwheat, a flower found nowhere else on the planet. To me, this situation perfectly encapsulates the question that we all face. 

Left: Tiehm’s buckwheat, found only in the Silver Peak Range of Esmeralda County, Nevada. Photo courtesy of Patrick Donnelly. Right: A greenhouse in rural Nevada holds Tiehm’s buckwheat seedlings, part of Ioneer’s plan to propagate the species as it develops the Rhyolite Ridge mine. Photo courtesy of Ernest Scheyder.

And we have President Biden, who is very pro environmental standards, very pro ESG, but also talking about getting the United States to be self-reliant and producing its own lithium, and needing to wean itself off of China — Biden often evokes China when it comes to the critical mineral space. And so his administration gave this company a $700 million loan commitment to develop the mine. 

But the problem is that another part of the Biden administration had been studying for years whether to declare this rare flower as endangered. So you’ve got one part of the U.S. federal government saying we’re gonna give you a loan, and another part saying we might take a step that could kill the whole mine. You have two parts of the federal government not talking to each other. And that creates a very disjointed approach. There’s not a whole-of-government answer. 

How do you compare what’s happening with rare earths to what you saw with the shale oil and gas boom that you previously covered? 

I was based in North Dakota for Reuters, covering the oil and gas boom that was taking shape there. When I would visit friends back home on the East Coast, they would ask me, okay, fracking, good or bad? But they would often do it, maybe at a party, while they were drinking out of a cup made from plastic, or they would have taken a taxi to the event that night powered by petroleum, or they’re wearing a polyester shirt. And so I would never answer the question directly. But I would say, ‘Well, you tell me, because so much of our everyday lives is reliant on petroleum based products. That’s not a value judgment. That’s just a statement of fact.’ 

I started to see a lot of parallels when I transitioned to covering the critical mineral space. A lot of folks would say, lithium mining, good or bad? And I would say, I don’t know what the answer is. You tell me, what are the choices you’re willing to make? Right now, the United States only has one lithium mine, and it was built in the 1960s. And it produces something like less than 5,000 metric tonnes of lithium per year — very small amounts. What we rely on right now is lithium that’s taken from the Atacama Desert in northern Chile, a very rural region; that’s processed, shipped to the coast, then sent across the Pacific Ocean to either Japan or China, where it’s put into a cathode, or put into a battery pack, and shipped back across the ocean, to a facility in Nevada, where it likely is put into a Tesla that is then sent to Florida. 

Now, that’s a hypothetical example. But that route is very common for lithium because Chile is one of the world’s largest lithium producers. This process is hugely deleterious to the global environment: just think of the carbon emissions from shipping alone. These are the things that folks need to be thinking through, and didn’t always think through when I was covering the shale industry. 

When I started covering the critical mineral space, I saw a bit of a different approach from a regulatory perspective. Many of the states in the United States that have oil and natural gas reserves are huge, very rural states that have many landowners that are financially incentivized to lease their land out. 

A lot of the critical minerals are in the Western United States, and the landowner is often the federal government. Much of Nevada is owned by the U.S. Federal Government; in Alaska, that Pebble Mine that I mentioned earlier is controlled by the federal government, huge parts of Utah and Arizona are also controlled by the federal government. And so you’ve got a a different mix there. 

The one counterexample I have in the book is in North Carolina, where a company known as Piedmont Lithium would like to develop a lithium mine which would be one of the largest open pit mines in North America, just outside Charlotte. And there you have a lot of landowners, so sort of similar to oil and gas. But here, you have a lot of folks saying we are not going to give you our approval, because we don’t want an open pit mine. Having a giant open pit mine is very different from putting a metaphorical straw on the ground and pumping oil and gas. 

Whether some of the mines that you write about get developed or not, the U.S. will still be pretty reliant on China for processing critical minerals, right? Do you see any interest in building the facilities that can process these minerals into the form that’s needed for various industries?

There’s a bit of a contrast to the oil and gas industry here too. Most folks know what a refinery is, broadly, they might not necessarily understand how they work, but they roughly understand how they’re processed. But with critical minerals, you have a different process for most of these metals, and there are a lot of them. So rather than just dealing with oil and natural gas, now you’ve got copper and nickel and cobalt and lithium and rare earths, and there are 17 rare earths. There’s a lot of different ways to process and handle those depending on the metals and how they’re extracted. 

We’re starting to see some efforts in the United States and the European Union and elsewhere to boost the processing, or the midstream if you will, of these minerals and metals. Elon Musk is building a lithium processing facility in southern Texas right now, Tesla broke ground on that earlier this year. We’re seeing some efforts among rare earths companies to invest in processing, because that is a huge beachhead that China has right now. 

But rare earths processing can produce radioactive waste as a byproduct. So there is also a strategic question: is there an appetite in the United States to produce that waste, knowing that by producing those rare earths you are helping the U.S. economy. 

There are a lot of tough choices around this. The United States wants to produce more nickel, but there’s no nickel smelter right now in the country. Just like there has to be a will or an appetite to grapple with the tough choices around mining, the same issue exists also for processing, because we need more of these facilities. The United States hasn’t built a copper smelter in decades. Freeport McMoran, one of the largest copper companies in the world, operates a massive copper mine in Arizona and it operates smelters in the United States. But it’s not planning to build another one: it is, though, building one in Indonesia right now. That smelter will help supply Indonesia and much of Asia’s demand for copper. It’s not building one in the United States for reasons that are complex and varied. It is a strategic hole in plans in the United States to be more self reliant in the critical mineral space. I really hope that we can have this collective discussion around this topic as well.

Left: A heap leach pad at Freeport McMoran’s Morenci copper mine in Arizona, currently the largest mine in North America. Photo courtesy of Ernest Scheyder. Right: Indonesia’s President Joko Widodo visiting the copper smelter development project of PT Freeport Indonesia, June 20, 2023. Credit: PT Freeport Indonesia

Is there a danger that countries like the U.S. end up always fighting the last war: wouldn’t it be better to try to find other clean energy sources that the U.S. can lead the way in rather than trying to win a battle with China over things like lithium that it’s going to be very difficult to win?

Well, the United States invented the lithium ion battery, it was invented by Exxon Mobil, which I think surprises a lot of people. The technological brain power does exist here. I’m fascinated by technological developments that could really change the dynamic around lithium ion batteries and the green energy transition. One area could be the rare earths processing that we were talking about earlier. Are there ways to say okay, here’s the industry standard that China has cornered for the past 20 or 30 years. But are there better ways to slice that bread, metaphorically speaking? I think that the question is out there and it’s a good one for scientists and other developers to be studying and pushing forward on. 

You’re already starting to see a lot of different research and efforts by scientists across the United States and the world to change how we think about different parts of this critical mineral supply chain, including how we mine. Are there different ways to think about mining in a way that is completely revolutionary from what we think of right now as just digging a hole in the ground? There is a lot of technological innovation happening and I think the next 20 or 30 years will bring a lot of new developments. 

But you don’t think Americans should just give up and cede the comparative advantage to China? 

I think the question is how do you compete with China. The Inflation Reduction Act is a great example of efforts by Washington DC to compete with China, by saying we’re going to give tax credits and other incentives to manufacturers that build their products with critical minerals not linked to China, or linked to U.S. allies. And so there’s efforts there, but there’s been confusing messages at best around regulation or on permitting. That is really what has to be ironed out. 

Are there ways to say okay, here’s the industry standard that China has cornered for the past 20 or 30 years. But are there better ways to slice that bread, metaphorically speaking?

The issue came to the fore for the Pentagon, especially the US Department of Defense, in 2010, when a Chinese fishing vessel and a Japanese Coast Guard ship got into an altercation in disputed waters. The captain of the Chinese fishing vessel ended up being arrested, held very briefly, and then released back to China. But as a consequence of that, China blocked the exports of its rare earths to Japan. As you can imagine, the likes of Toyota and other huge manufacturers in Japan use a lot of rare earths, and that did not go unnoticed in Washington. That set off alarm bells: if China was willing to use its control of the rare earths sector as an economic weapon against Japan, would it be willing to do so elsewhere. 

Fast forward to 2023. We’re seeing China put curbs on exports of germanium and gallium and graphite, three relatively minor but important metals: the Pentagon and other parts of the federal government know that you can’t have a fighter jet without such rare earths, or laser guided missiles or night vision goggles. And who controls the sector right now? China, and so there is concern that that economic weapon could be used against the United States or against another country besides Japan, in the future. 

And so there’s a huge effort to financially support the development of projects in the United States that are not only mines, but also processing. 

Should you let the relationship [with China] continue, in the spirit of economic partnership? Or should you try to develop your own independent supply chain? I think there are efforts right now to try both, but also a realization that much of our modern economy is dependent on rare earths. And anyone who’s in procurement will tell you just having one main supplier for one product is not always the best strategic sense for your operation.

Is this also an area that potentially reverses the China story that’s been written over the last several years, which has been about America losing jobs to China: this is about trying to win back ground in an industry where China has gained the upper hand.

I don’t think what we’re seeing is an effort to take jobs back from China so much as bringing more jobs into the United States and other Western economies. A great example is a company called Albemarle, which is the world’s largest lithium company right now. It’s headquartered in North Carolina; it has operations in Chile and Australia and, yes, China. Right now it’s growing in the United States. Very rapidly, actually, it’s planning to build a processing facility in the Western United States, and to reopen an old mothballed lithium mine. And it’s received a lot of money from the U.S. federal government as part of these plans. 

At the same time, it also is growing rapidly in China. Part of the reason is because China is the world’s largest auto market, as a billion people are increasingly going electric. And so the demand for batteries will only grow there. And so you start to see this sort of dual approach by the company, which is not unique to Albemarle either. There are other companies that operate both in the United States and China that are growing in both areas. 

So what we’re going to see is not necessarily an approach by industry, or the politicians that support them, to take jobs back from China so much as to grow the industry’s base in the United States. The companies themselves are also saying we can’t afford not to be in China, given that it is a large economic powerhouse right now. 

You must have seen some stunning sights, driving around the U.S. to write this book. Why did you think it was important to bring this down to the human level, with the many profiles of people you have?

Ultimately, this is a story about people. I really thought the best way to showcase the tension here, around the choice that we face, was to look at the people that are for and against these projects across the country and the world. 

There are many layers to this. One of the issues that we look at is the proposed Resolution copper mine in Arizona, which Rio Tinto and BHP are hoping to develop. That’s strongly opposed by indigenous groups, because this mine would destroy a holy site for Native American tribal members. If you back up and say, okay, you’ve got a mining company and indigenous groups, those are just two sides. But we also have a local community that desperately wants the jobs. And it’s filled with mostly Hispanic voters, who are very focused on taking their economy, which is low on the socio-economic strata right, and really boosting it, building up the tourism industry, building up their local schools so that more people come to this community and live there. The average income in this town right now is about $20,000 a year. And the mine is offering average salaries of about $100,000 per year. You can just do the math in your head and realize that if you were the mayor of that town, you would really want the mine.

And indeed, her name is Mayor Mila Besich and she’s very strongly in support of this mine. Getting her perspectives, and contrasting them with Dr. Wednsler Nosie who is the leader of this indigenous group and, and hearing his visceral pain at the plans to build this mine that would destroy his religious site was so important to me; and talking to the mining company itself, and their efforts to do the right thing by the community and move beyond the deleterious actions of the mining industry. 

From my perspective, telling the human story was the only way to bring to the reader the tough choices that we all face here. In the past, folks have written about the mining industry and these issues as just one side versus the other side. But it’s not just that, there’s a lot of different tension points here.

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