Administration Restricts Exports of Critical Minerals Scrap

The Trump administration has granted the Commerce Department new authorities to ban exports of recoverable critical minerals under the Defense Production Act.

• The Commerce Department has announced initial action with export restrictions on “black mass” (Financial Times, subscription).
• These authorities would also enable additional export restrictions, including for end-of-life permanent magnets.

The details: The Commerce Department’s Bureau of Industry and Security announced this week that 100% of U.S. sales of black mass and scrap tungsten, a critical input for defense production, must be allocated to U.S. persons. The export ban was formally published in the Federal Register on Aug. 6.

• The agency defines “black mass” as shredded lithium-ion battery scrap that contains cathode material (such as lithium, cobalt, nickel and manganese), anode material (graphite and silicon) or other residual battery cell materials.
• In addition, BIS may extend export restrictions to additional recoverable critical minerals “at any point in time.”

The timing: The sales requirements enter into force on Aug. 27 and will remain in force for one year, with the option for BIS to extend.

The background: The president’s July 30 determination designates recoverable critical minerals and materials (CMMs) as scarce and essential to national defense, citing both “inadequate supply” and dependence on foreign sources for CMMs as an increasing risk.

Exceptions: BIS may grant case-by-case exceptions or adjustments to the sales requirements, either generally or company-specific, on a rolling basis, based on the following criteria:

• Undue or exceptional hardship
• Consequences of compliance are contrary to intent of the Defense Production Act (e.g., would reduce U.S. supplies of critical minerals)
• Materials will be sold outside the U.S. for processing/refining before being returned to the U.S.
• Additional time is needed for compliance

NAM members should consult the Federal Register notice for additional guidance on submitting requests for exceptions and adjustments.

Comments: BIS requests public comments by Nov. 4 on additional sales requirements “necessary or appropriate to promote national defense,” as well as the “framework of the temporary regulatory provisions.”

• Please contact NAM Director of International Policy Rachel Minogue at [email protected] with any questions or suggestions.