Refueling infrastructure



After the Covid-19 relief plan, President Biden’s administration presented its next proposal – a $ 2 billion plan to improve the country’s infrastructure and switch to greener energy over the next eight years, called The American Jobs Plan.

The US president revealed the infrastructure plan, which is also expected to benefit communities of color, indigenous and rural citizens, whose local areas have fallen behind on modernization at an event in March in Pittsburgh, Pennsylvania. Now the plan is being discussed during lengthy negotiations with Congress.

As the new administration recently won a C score from the American Society of Civil Engineers, which said an additional $ 2.6 billion in funding will be needed over the next decade to meet these goals, the infrastructure plan is supposed to initiate positive change.

In the infrastructure bill

Biden’s $ 2 billion infrastructure bill could have a positive impact on the industry as it is expected to drive additional demand for industrial metals like steel, which uses charcoal as a key ingredient. Steel will be in high demand for constructions like aging bridges and copper will be necessary for the energy transition or electrification agenda, which is also a key part of the bill.

Key minerals in batteries and electric vehicles like cobalt, nickel and lithium are also expected to see a further surge in demand as a result of this investment.

“All of a sudden now, the money is coming back into the raw materials; you see the headlines on copper demand and the financiers are back in the commodities game, so to speak, which was not the case for many years and there really wasn’t a whole lot of investments in new extraction capacity ”, explains Thorsten Schier, metals and mining expert at Fastmarkets, information service on commodity expertise.

The bill also stood out for its ability to woo both sides of the spectrum and bring together enthusiasts, including coal supporters, as well as climate change activists.

United Mine Workers of America, the country’s largest miners’ union, President Cecil Roberts praised the US plan for Biden’s employment for working to improve the country’s infrastructure and transition to greener energy with the aim of fighting against inequalities and the climate crisis.

“We are for infrastructure. We are for jobs. We are in favor of moving manufacturing to the coalfields. We will work with the president on this, ”he said. CNN Affairs.

In addition to the increase in demand for minerals, the bill should contribute to a gradual and supported energy transition. the United Mine Workers of America recently released a document, ‘Preserving the land of coal‘, which highlights the union’s principles for an energy transition centered on the preservation of jobs in coal, the creation of new jobs and the preservation of families and communities in the coalfields.

The union suggested that the industry’s workforce will benefit from the transformation by helping to build green capacity, for example, by starting to build solar panels and wind turbines in disadvantaged coal regions, as well as by offering employment preference to displaced minors and their families.

At the same time, the bill is expected to optimize the work of the energy industry by plugging orphaned oil and gas wells and clearing abandoned mines. Since many old oil and gas wells and abandoned mines could pose serious safety risks, while causing permanent damage to air, water and the environment, the plan calls for the concentration work in unionized jobs, processing old oil wells and salvaging abandoned coal, hard rock and uranium mines.

While many of these old wells and mines are located in rural communities that have suffered from years of divestment, the bill will help create new jobs in hard-hit communities, reduce methane and brine that s leakage from these wells, as well as investing in reducing leaks from other sources, such as aging pipes and distribution systems.

With great power comes great responsibility

With the positive forecasts of the effect of invoices on the mining and mineral industry, we realize that although demand is expected to increase considerably, on the supply side, investment in new mining capacity has stagnated for many years. now.

Not to mention the fact that in many jurisdictions like the United States, where there are strict environmental regulations, it can take a long time to bring mines into service. So I think the timeframe to authorize and start a new mine is over 10 years in the United States, even though it is ultimately approved.

“There were a couple of cases where they got to the final stages and then it was dismissed. So I think there is definitely going to be a crimping of the supply, ”says Schier.

In addition to the somewhat restricted availability of raw materials such as iron ore, he also warns of the complexities of the global supply of minerals, such as cobalt: “It is in some cases a by-product of copper mining, but in reality the only major supplier is the Congo. And there are obviously real concerns there about supply and manpower. So if you’re not going to get it from there, where are you going to get it from? “

With an element of nearshoring to the bill, which emphasizes the outsourcing of business processes to companies in neighboring countries, the provision of such items could become more delicate.

Another consideration is that in order to allow for an additional degree of transition, the plan is also is expected to cut around 130,000 jobs in the oil, coal and gas industry. Providing these workers with a viable alternative is also included in the plan, which will cost around $ 16 billion to help recycle and employ fossil fuel workers to treat abandoned oil and gas wells and clean up old coal mines. .

In addition to the $ 10 billion allocated to create a Civilian Climate Corps, to train the next generation in programs aimed at specific climate-related goals, it is becoming evident that the goals of the bill will require considerable funding. .

Washington is also funding research on Canadian cobalt and rare earth projects in Malawi, East Africa, as part of a series of international investments.

While there are still a few hurdles to overcome, Biden’s White House is now working to gain support from the workforce, attract domestic electric vehicle manufacturing, and prove that green policies create jobs ahead of the 2022 midterm elections, according to two union sources who recently spoke to Reuters. These steps are taken to determine whether the strategy will gain enough congressional support.

Hopes for the near future

With the U.S. plan for Biden’s jobs set to be bigger and have more impact on metals markets than Obama’s much smaller package in 2009, the industry seems cautiously excited about the opportunities that could arise from the proposed move. law.

Schier says: “We have seen developments and investments in factories in the United States. I think there is still a long way to go. I think the United States still lags behind Europe and Asia in terms of building this infrastructure.

“And then I guess if you have the downstream facilities, making the vehicles and making the batteries… But if you don’t have the raw materials at the top, that’s going to create a real, real challenge.”

While the United States should stay away from influential markets like Asia, which have built their battery and electric vehicle infrastructure over the years, the increase in private investment in the United States also presents a viable opportunity for the United States. country to accelerate the progress of its industry.

With these existing concerns and the fact that the bill also attracts regular media attention, being modified slightly or scaled back a bit, it remains to be seen what the final infrastructure package will encompass after the various stages of approval US law requires it to go through.

“Is this going to be much more of a move away from coal?” Obviously, a lot of politicians, I would say on both sides, not just Republicans but Democrats as well, have ties to the mining country. And it really remains to be seen how determined they will be to promote new energy initiatives, ”concludes Schier.


Leave A Reply

Your email address will not be published.