Production of materials necessary for electric cars in the US is under pressure
The COVID-19 pandemic has limited the scope operations of US mining companies, that are producing rare earths and lithium. These materials are crucial for the manufacturing of electric vehicles, batteries and tech devices.
A number of mining companies still have reserve funds, that they have acquired during the recent offerings. However, they are still forced to wind down the engineering, financial and environmental paperwork. Reportedly, the pandemic can cause significant setbacks in the construction of the mines as well
According to the statement by a mineral analyst of Morningstar company, "coronavirus could cause a year or two delay on projects". In 2019 lithium mining has also been hit by a global price reduction of 37%.
The lithium and rare earths mining are considered to be strategic projects by the US. Donald Trump has emphasized the importance of acquiring the stable supply of the materials and reducing the dependency on Chinese production. The Pentagon has stated, that it will be funding the mining sector under the Defense Production Act. The acr provides the military with additional ways of acquiring special equipment. The US president is also considering using the act to enhance medical supply production.