Request for Information: Critical Materials Market Dynamics

Notice of Request for Information (RFI) on Critical Materials Market Dynamics

Dates

Responses to the RFI are requested by May 20, 2024.

Supplementary Information

I. Background

This is an RFI issued by the U.S. Department of Energy's (DOE) Office of Manufacturing and Energy Supply Chains (MESC). This RFI seeks public input on market dynamics and price volatility in critical materials processing, refining, and recycling. This RFI will inform DOE's development of critical materials strategies and measures to more effectively mitigate market volatility as critical materials processing, refining, and recycling are scaled up in the United States and allied countries.

MESC seeks input from all types of critical material market participants:

• Companies that process, refine, or recycle critical materials;

• Groups that supply feedstock for such processors or recyclers ( e.g., miners, scrap collectors);

• Offtakers of critical materials ( e.g., automobile manufacturers, battery manufacturers, other clean energy manufacturers, utilities, heavy industries);

• Investors in critical material projects ( e.g., project finance investors, banks, commodity traders, brokers, private equity);

• Not-for-profit organizations ( e.g., entities capable of operating demand-side support mechanisms to scale up critical material processing, refining, and recycling);

• State, local, and tribal government entities; and

• Other interested entities ( e.g., trade associations, market-clearing organizations).

II. Purpose

On July 31, 2023, DOE released its Critical Material Assessment, ⁽¹⁾ which identified critical materials in the near and medium term that will face supply-demand imbalances. This assessment also informed the DOE's Critical Material List. ⁽²⁾

MESC is committed to securing the energy supply chains needed to support a clean and stable energy transition, which will be fueled by critical materials. This RFI will help inform the development of the U.S. Department of Energy's and its Office of Manufacturing Energy Supply Chain's strategy towards securing critical materials for the energy sector industrial base.

The purpose of this RFI is to solicit feedback on market dynamics in the critical material supply chain and how the Federal Government can play a role in supporting market stability and price transparency. DOE is specifically interested in information on:

• Market dynamics for critical material producers and implications of those market dynamics for securing a secure and resilient critical material supply chain; and
• What kind of Federal Government support or coordination would be essential to scaling up domestic critical material processing, refining, and recycling, particularly to mitigate market volatility.

You may answer as few or as many of the questions below as you would like. Please use the question number in your response to help reviewers. Please also provide detailed responses.

III. Questions

1. For a given critical material, are there particular market dynamics DOE should be aware of?

a. Are there specific critical materials that have experienced significant market volatility and price instability?

b. For a given critical material, are there differences in cost of production domestically versus cost of production in other countries? How are those differences in cost of production reflected in prices?

c. What, if any, impact has market volatility and price instability had on various market participants?

d. For those critical materials that have experienced significant market volatility and price instability, what are the underlying causes?

e. Are there particular critical materials where processing, refining, or recycling projects struggle to attract investment specifically because of demand-side uncertainty and/or lack of firm offtake (vs., e.g., concerns about competitiveness on price or lengthy qualification processes)?

f. How do these market dynamics implicate the ability of domestic critical material producers to sign offtake agreements with end users? How does this impact DOE investments in the critical material industry and the path to securing a resilient supply chain?

2. What measures can DOE take to promote market stability within a given critical material market?

a. How can DOE facilitate market adoption and maturity as a stakeholder ( e.g., facilitating market information sharing, encouraging price transparency, supporting consortiums)?

b. How can DOE support critical material projects beyond capital grants and loans? Are there particular programs or policy mechanisms DOE should leverage with existing statutory authority to support critical material projects and successful project offtake? Are there particular aspects of the supply chain that DOE should focus on?

c. In operations without co-located vertical integration across extraction (or production) and processing, what specific federal support would be most useful to provide operational stability?

3. What indicators of market volatility demonstrate the need for support? What are effective measures or guiding principles DOE or the Federal Government could take to support critical materials?

a. What are important considerations in exploring reverse auctions, advanced market commitments, contracts for difference, direct procurement, pooled offtake vehicles, or other support measures?

b. What are implementation approaches for DOE to facilitate demand-side support for critical materials through existing grant and loan authorities and/or public-private partnerships?

4. What are the benefits and drawbacks of physical offtake of critical material products for stockpiling compared to other measures that do not involve physical offtake? What existing mechanisms could be used and what concerns should be considered in terms of implementation?

5. How would setting up alternative market exchanges or indices with international partners for critical materials enable price transparency, market stability, and/or reduce emissions from critical material production?

a. What premium would firms be willing to pay for validated attributes such as ESG standards and supply chains sourced from domestic/allied countries? How could DOE or the Federal Government support greater demand for higher standard materials?

b. How might environmental, social, and governance (ESG) standards or critical material grades specific to energy applications be incorporated into an exchange and what are the conditions needed for successful implementation?

6. What other tools outside of market exchanges could support price transparency, market stability, and/or reduce emissions from critical material production?

a. What actions could the United States take in collaboration with its international partners to enhance price transparency and stability?

b. Which country partners would be ideal collaborators?

c. Are there established international fora that are better suited to have an impact on these challenges? ( i.e., International Energy Agency, G7, OECD, etc.)

IV. Response Guidelines

Commenters are welcome to comment on any question. RFI responses shall include:

1. RFI title;

2. Name(s), phone number(s), and email address(es) for the principal point(s) of contact;

3. Institution or organization affiliation and postal address; and

4. Clear indication of the specific question(s) to which you are responding.

Responses to this RFI must be submitted electronically to [email protected] with the subject line "Critical Materials Market Dynamics RFI" no later than 5:00 p.m. (ET) on May 20, 2024. Responses must be provided as attachments to an email. It is recommended that attachments with file sizes exceeding 25 MB be compressed ( i.e., zipped) to ensure message delivery. Responses must be provided as a Microsoft Word (*.docx) or Adobe Acrobat (*.pdf) attachment to the email, and no more than 10 pages in length, 12-point font, 1-inch margins. Only electronic responses will be accepted.

A response to this RFI will not be viewed as a binding commitment to develop or pursue the project or ideas discussed. MESC may engage in pre- and post-response conversations with interested parties.

Confidential Business Information

Because information received in response to this RFI may be used to structure future programs and/or otherwise be made available to the public, respondents are strongly advised NOT to include any information in their responses that might be considered business sensitive, proprietary, or otherwise confidential.

Pursuant to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit via email two well-marked copies: one copy of the document marked "confidential" including all the information believed to be confidential, and one copy of the document marked "non-confidential" with the information believed to be confidential deleted. Failure to comply with these marking requirements may result in the disclosure of the unmarked information under the Freedom of Information Act or otherwise. The U.S. Government is not liable for the disclosure or use of unmarked information and may use or disclose such information for any purpose. If your response contains confidential, proprietary, or privileged information, you must include a cover sheet marked as follows identifying the specific pages containing confidential, proprietary, or privileged information:

Notice of Restriction on Disclosure and Use of Data:

Pages [list applicable pages] of this response may contain confidential, proprietary, or privileged information that is exempt from public disclosure. Such information shall be used or disclosed only for the purposes described in this RFI. The Government may use or disclose any information that is not appropriately marked or otherwise restricted, regardless of source.

In addition, (1) the header and footer of every page that contains confidential, proprietary, or privileged information must be marked as follows: "Contains, Confidential, Proprietary, or Privileged Information Exempt from Public Disclosure" and (2) every line and paragraph containing proprietary, privileged, or trade secret information must be clearly marked with [[double brackets]] or highlighting. Submissions containing CBI should be sent to: [email protected].

Signing Authority

This document of the Department of Energy was signed on April 12, 2024, by Giulia Siccardo, Director, Office of Manufacturing and Energy Supply Chains, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register .

⁽¹⁾ https://www.energy.gov/sites/default/files/2023-07/doe-critical-material-assessment_07312023.pdf .

⁽²⁾  The following materials are on the DOE critical material list: aluminum, cobalt, copper, dysprosium, electrical steel, fluorine, gallium, iridium, lithium, magnesium, natural graphite, neodymium, nickel, platinum, praseodymium, silicon, silicon carbide and terbium. https://www.energy.gov/cmm/what-are-critical-materials-and-critical-minerals .