London, December 12th (Argus) - On December 11th, delegates attending the conference at the Center for Strategic and International Studies (CSIS) stated that key mineral projects of the G7 countries require government incentives to make them commercially viable, in order to reduce reliance on Chinese supply. Industry representatives said that measures such as more extensive use of price floors, extension of tax credits, and trade remedies could be some of the measures that could support this emerging industry. Matthew Lengerich, the president of the nickel and cobalt mining company Jervois, said that implementing price protection is necessary to maintain business competitiveness in a volatile market. Due to the weak cobalt price, Jervois suspended the construction of its 2000-ton-per-year cobalt plant in March 2023, but if a price floor is introduced, the company is considering restarting it. Dinah McLeod, the director-general of the Cobalt Association, said that the association predicts that the cobalt market will experience a shortage, and if no investment decisions are made within "the next 12-24 months", there will not be enough capacity to supply.
G7 government representatives stated that addressing the short-term supply shortage while creating long-term stable demand signals through government incentives is a delicate but achievable goal. However, industry representatives said that public investment has not been effectively deployed. Heather McDowell, the general counsel of the PGM producer Sibanye-Stillwater, said that government funds should "be invested in projects that are already operational, rather than speculative projects with long delivery cycles". She added that this funding could be used to expand production or for research and development, to recover other metals on the US Critical Minerals List. The G7 recently established the Critical Minerals Production Alliance to provide funds for 26 new investment and cooperation projects worth $4.6 billion, although the UK, the EU, and the US are taking unilateral actions to protect their domestic industries. Gracelin Baskaran, the director of CSIS, said: "Price floors require economies of scale, and only by collaborating with peers can we achieve this goal." But she warned that relying solely on price floors cannot solve the midstream economic problems, which is in line with the opinions of industry representatives, who said that after the gradual cancellation of the 45X tax credit in the Biden era, there is still a need for continuous operational cost support because without such measures, even factories that receive subsidies are at risk of closure.
