This election season you can expect to hear a lot of news.
Some of it meaningful, much of it not.
Give the up first podcast 15 minutes, sometimes little less,
and we'll help you sort it out.
What's going on around the world and at home?
Three stories, 15 minutes, up first every day.
Listen every morning, wherever you get your podcasts.
This is Planet Money, from NPR.
Keythrummer.
Sally Helm.
For the last couple of weeks, I have been, shall we say, a little bit obsessed with...
Graphite.
Graphite, I've been talking about it a lot.
Graphite of pencil fame.
But also, as you keep pointing out, also of battery fame.
It is a key ingredient in batteries, which I did not know before I started looking into this.
Which makes it a critical mineral.
It is important for the whole green energy electric future.
And also important, almost all of the battery-ready graphite in the world comes from one single
place, which is China.
And that is actually true of lots of the materials that go into batteries, like processed lithium,
processed cobalt.
But you know, keep you here about those other metals.
Graphite is flying under the radar.
Another person who shares your concern, Sally.
John Jacobs.
He works for a company that is getting into graphite processing.
Is it kind of like the underdog critical mineral?
I think, well, I mean, I'm biased, but it is.
It has not been given its fair shake, I would argue.
There's more graphite by weight in a lithium-ion battery than anything else.
So, I mean, you know...
Then lithium.
So there's more than anything...
More than anything.
In the battery world, graphite has kind of been like always the brides made, never the
bride.
But lately, however, it has started to step into the spotlight.
About a month ago, John Jacobs gets an email.
I almost deleted because I thought it was spam.
The email in question is cordially inviting John to a ceremony in the Rose Garden at the
White House.
You know, President Joe Biden would like the pleasure of your company.
Unfortunately, the event is just a few days away.
John's not able to make it.
The thing he knows what's going to happen there.
We heard inklings this was coming.
So we knew there was going to be some announcement related to tariffs.
Tariffs and import talks.
The idea that we were invited was the clear hints that graphite was probably going to be
included in this.
John was right.
At that Rose Garden ceremony that he could not attend, President Biden announces a tariff
package that will make a bunch of Chinese imports more expensive.
And included in this package are some tariffs on Chinese graphite.
This is part of a much larger strategy by the Biden administration to build up future
clean tech industries here in the United States and to reduce our reliance on China.
Electric vehicles, batteries, the minerals that go into batteries, those are all a big
part of this.
Hence tariffs.
I think these are clear shots across the bow from the administration to the current companies
to say you need to now start being serious about using sources outside of China.
And based on my front lines experience and talking to these companies, they are engaged.
They are ready to do that.
They're noticing.
They're noticing.
The clock has started.
We got to figure this out.
Yes.
Hello and welcome to Planet Money.
I'm Keith Romer.
And I'm Sally Helm.
President Biden says he wants to create a new battery future.
And it doesn't rely so much on China.
And he is using tariffs.
Putting up a big ol' fence around our tiny fledgling battery industry.
But announcing a tariff in the Rose Garden, that is one thing.
Actually building a brand new supply chain in the real physical world, that is harder.
Today on the show, graphite finally gets its due.
We get down on the ground and look at this big supply chain story through the lens of
one.
It's a rotten, critical mineral.
And we visit a small town that realizes it might be the perfect place to create an American
graphite industry.
If it can figure out a tricky situation with one very expensive pipe.
Support for this podcast and the following message come from Wise.
The app that makes managing your money in different currencies easy.
With Wise, you can send and spend money internationally at the Mid Market Exchange
rate.
No guesswork and no hidden fees.
Learn more about how Wise could work for you at Wise.com.
Support for this podcast and the following message come from Wise.
The app that makes managing your money in different currencies easy.
With Wise, you can send and spend money internationally at the Mid Market Exchange
rate.
This works and no hidden fees.
Learn more about how Wise could work for you at Wise.com.
tariffs on graphite, they are part of an effort to move the battery supply chain away from
China.
Because when it comes to batteries, China has been way ahead for years.
So how that happened.
In the 2010s, the Chinese government decided it wanted to jumpstart the electric car industry
in China.
So it started giving incentives for people to buy electric cars, which ended up increasing
worldwide demand for batteries.
I heard the next part of the story from a guy named Hugh Jackman.
Wolverine!
It is not French Hugh Jackman, famous Wolverine actor.
This Hugh is a graphite guy.
He is the CEO of a mining company in Canada.
I can tell you a funny story though.
My daughter, I was meeting her in London and I booked a hotel where I was saying and she
came in before me and she goes, hi, I'm Hugh Jackman's daughter and the guy at the
desk said, yeah, Hugh Jackman's daughter, really?
We got a really nice room.
Hugh has been in minerals a long time.
And when China started really building its battery industry, he was there.
He told me there was one particular meeting about a decade ago.
I remember it quite vividly.
It was a trip to China actually.
And I went to visit a customer using a material.
This customer was making lithium ion batteries for consumer electronics.
So Hugh has this meeting.
It's basically a small room with a couple of chairs and a table and these two guys sitting
around the table and they go, so we're looking at going into the EV battery market.
They're like, we also want to buy some of your materials to start making batteries for
electric vehicles, EVs.
And they start talking about these huge numbers.
And I said, wow, these guys are for real.
This industry is absolutely going to explode.
Now battery people, they measure the size of their industry by the amount of power it
can produce.
And at that time, around 2014, the entire car battery industry worldwide was measured
in gigawatts.
But these guys, they're not talking gigawatts, they're talking terawatts, so bigger than the
whole industry at that time.
A thousand times bigger.
And so there was a huge opportunity.
An opportunity that China wanted to seize.
So around 2016, they tried to juice the demand for Chinese batteries.
They tell Chinese consumers those incentives were offering to help you buy electric cars.
Now you only get them if your car has a battery that was made in China.
And it works.
The Chinese battery industry grows and grows.
It becomes dominant.
By 2023, China supplies about 80% of the world's battery sales.
You know, nobody else fought about the battery industry.
The Chinese believed in it, but nobody else really did.
So that is how China got way ahead on batteries.
Now let's talk about how the tariffs come into this.
If you are President Joe Biden looking at China's huge battery industry, you might be worried
about a few things.
First, what if something happens in China and you can't get any more batteries?
Like natural disaster, pandemic, or a conflict between the US and China?
Yeah, you can see how relying on China for all of our batteries could potentially be a problem.
Another thing Biden might be worried about is jobs.
Because if EVs are the future and we're importing all of our EV batteries and end up importing
EVs themselves, that could take the American auto industry.
This would go away.
And finally, President Biden claims that by subsidizing these industries, China isn't
playing fair.
That they're supporting their industries in a way that makes it too hard for the US to
compete.
President Trump also made claims along these lines.
And in fact, he put some tariffs on graphite.
They were announced back in 2018.
Then after requests from Tesla and some battery makers in 2020, those tariffs were paused.
Now President Biden, to and graphite tariffs all over again.
Some go into effect this week.
Others not until 2026.
HUEG-JAKMA is among those who have reaped the rewards from this big global fight.
Because remember, these tariffs are only on imports from China.
Graphite from Canada?
No problem.
So HUEG's graphite mine in Quebec stands to benefit.
The phone's been ringing quite a lot.
So it's been good for us.
Our emails are coming in.
Or video calls are going on.
Just in the past week, since this happened.
But in a couple of weeks, yeah.
But mining graphite is really only part of the story.
For one thing, you can also make synthetic graphite.
And in either case, the real game in town is graphite processing.
Because you cannot just dig up some graphite from the ground, put it straight into a battery
and expect that to work.
I would not.
No, don't do it.
There is a whole very technical way that you have to mill the graphite down and reshape
it and code it.
And on that whole thing, China is even further ahead.
When it comes to battery-ready natural graphite, they produce 93% of the world's supply.
So what the US really needs to do is build up its graphite processing capacity.
And to see what that is potentially going to look like, we are going to visit
one small town in Alabama, a town that wants to become one of our nation's leading graphite
processors.
All right.
We just passed into Kusa County, right on the one in Drinkusa and Talapusa.
I went down to East Central Alabama to understand what it is going to take to physically build
a new battery industry from nothing.
Yeah, or basically nothing.
Because there is some graphite in the United States, including in Alabama, the deposits
there have not been mined for something like 70 years.
But this region was once called the graphite belt.
It is the purest, largest graphite deposit in North America.
You sound proud of that.
I am.
That is Woody Beard.
And he might be overstating things a little bit here, but you know, this graphite means
a lot to him.
He is the mayor of Alexander City, Alex City to locals.
Alex City has got about 15,000 people.
It is about 30 minutes away from that graphite deposit.
And Woody, he has split his whole life.
Do you think people who knew you would have thought you would end up the mayor of Alex
City?
Oh, he'll know.
He told me barely a minute at high school, failed out of junior college, then he ended
up in the National Guard, then he became a nurse.
Woody has lived a lot of lives.
And while back, he started getting really interested in bringing business to Alex City.
Because actually this is not the first time that Alex City has been caught up by the big
forces of global trade.
For decades, a really major employer there was the clothing brand Russell.
They made sweatshirts, sweatpants, uniforms.
But in the late 90s and early 2000s, textile manufacturing started falling apart in the
US.
In part, because after NAFTA, some factories moved to Mexico, and in part because of what
economists have termed the China shock.
Chinese imports undercut all kinds of American made products.
Alex City lost a lot of jobs.
Buildings that had been busy every day of the week, they were empty.
It was absolutely depressing.
Everything was going down, businesses were closed, and everything's fixed.
Claps, and you know, you can't leave a building empty for long.
It starts deteriorating.
I saw some of this as I was driving around.
Some of the Russell buildings have been repurposed over the last two or three decades.
But you can still find abandoned warehouses.
There's one with a big red X painted on it, said Condemn.
A couple years ago, Woody decides he wants to do something to help bring Alex City back.
He runs from air, and he wins.
And in 2021, something important happens.
A group of people walk into his office and they say, we want to start up an industry of
the future right here in Alex City.
It all depends on graphite.
They said they want to talk to us, and they came in, and they told us what they wanted
to do.
These folks are from a company called Westwater Resources.
And they say, we've bought the rights to the graphite deposit in Kusa County.
And we want to open a mine, and we also want to open a process and plan.
And they've played this big game.
We're all lucky enough.
We could bring that process and plan here.
Remember, it's not enough to dig up the graphite.
You also have to process it.
And to do that here, the company says, they're going to need a couple of things.
Hi on the list, a really, really big wastewater treatment facility, one that can handle the
runoff from the plant.
Woody tells them, no problem.
Alex City has one, because the tax island industry that used to be here.
He tells the Westwater people, our wastewater plant is exactly what you need.
They're skeptical.
I see getting a damn truck.
So we drive out there and are watched their head scientists look around at the president
company.
And he just nodded to president like this is it.
The wastewater plant will work.
It has everything.
Well, almost everything.
The only thing they need is a pipe going from there to there.
What kind of pipe?
A sewer pipe.
Washed water pipe.
In the quest to start up a graphite processing business in Alabama, to compete with China's
93% dominance.
We have just encountered problem number one, the pipe.
The company needs a pipe for their wastewater.
Now, city wants this company to set up here, right?
If the plant gets built, it will lead to these good paying jobs for people in town.
The pipe is going to cost $9 million.
But Woody says he's going to make it happen.
We borrowed $9 million and ran a wastewater line from our plant all the way up there and
tied it into their plant.
On good faith.
The company promises this is going to work out.
We'll pay you to use the pipe once we get up and running.
So Alex City starts building.
We had to go under all these driveways, bore, dig, plant grass.
I mean, it was, it took about four or five months and we administered all that.
And you know, it's not often discussed, but this is what it looks like to build an industry
that doesn't exist.
You don't have to figure out permits.
You have to build pipes and roads and the whole factories.
If the US battery industry wants to compete with China, it is going to take a lot of down
on the ground work like this.
It might take a lot of new sewer pipes.
In 2022, Westwater Resources breaks ground on their new processing plant.
Today, they have three big buildings in an industrial park about 10 minutes drive from Woody's
office.
Oh, here we go.
Oh, I'm going to ask you to put one of these things on.
Oh, sorry, I should tell you that.
No, that's great.
We need hardhats.
Cool.
And we need more from John Jacobs, that guy from the beginning who got the email invitation
to the Rose Garden tariff ceremony.
There's a little vest in here too.
He takes me out to a huge building like as big as a cathedral.
Steel beams rising up to support this tall, tall roof.
Inside, there are cylindrical tubes.
There are a couple of big gray machines that are shaped kind of like an upside down rocket
ship.
Towards the back are a couple of big circular metallic spinny machines.
OK, so what you're looking at here is the world's largest blunder.
And there's a series of metallic blades in this thing.
And then it can be spun basically at different energies or speeds.
This machine makes the graphite particles smaller.
And you also have to shape them into a bunch of tiny, consistent little spheres.
John walks me over to where that will happen.
Right now we have 10 spiritizing machines installed.
And so this would be the next step.
Spiritizing.
Good word.
It means what it sounds like.
And it is super important for batteries.
Because the graphite will eventually get mixed into a giant slurry and basically painted
on to a sheet of metal.
It's not a sphere, it's going to be clumpy.
So imagine like you're painting your wall at home.
If you get a little speck on your paint roller, it's going to leave a streak.
That's bad.
When John's company first tried to make these spheres, there was some room for improvement.
I think the technical term was it was too much like a potato shape.
It needs to be more like a sphere.
This is problem number two for building a battery industry in the US.
The potato problem.
What you're really trying to do is find the correct settings.
How long are you going to mix it and how much impact are you going to subject the particles
to to create what you want.
If you do too much, it destroys the sphere.
Yeah, he says their particles were like too flat.
So they would try some setting.
Send out a sample here from the battery makers.
The feedback months later through our battery partners would make it more of a sphere.
So we'd go back to them again and they would do it again.
You get sick of hearing that?
Like more of a sphere?
Yeah, you do.
Yeah, believe me.
Yeah, it just never seems to be spheroidal enough.
They're looking for something really specific.
It's like kind of like a sphere.
It is kind of potato.
Sphere potato.
It's a sphere potato.
It's kind of that's what it is.
It has to be just the right shape.
And this, the sphere potato problem, this is a huge issue for any new graphite processor.
And it's really a huge issue for the entire battery industry overall.
When you are building a new industry from scratch, there's just a lot of technical learning
that has to happen.
It can take years.
Westwater has actually been working on the potato problem since about 2022.
And they just recently solved it.
They can now make their graphite into the exact right sort of sphere, sort of potato
shape.
And that means they can sell it.
In fact, they recently signed their first sales agreement with this big battery company
called SK on.
Which is good news for John.
But this plant, it is not open yet.
Like I was hoping for giant containers overflowing with graphite.
I wanted to lay down on a big pile of graphite and make a graphite snow angel.
But in this big room full of new equipment, I did not see any graphite.
Because it's not being processed here yet.
This building we're in after two years, it's still not finished.
The fact that we still need money to complete the construction of the plant is a fact.
And so in the absence of that, we wouldn't be able to finish it.
And that brings us to the third and final problem in the story of building a battery industry
in the United States.
Money.
That's after the break.
This message comes from an PR sponsor and theropic.
Their Claude 3 model family is Enterprise Ready AI.
Haiku is fast and cost effective.
On it, perfectly balances skill with speed and Opus sets new intelligence industry benchmarks.
Visit anthropic.com slash Claude.
All that sitting and swiping, your body is adapting to your technology.
Learn how and what you can do about it.
I really felt like the cloud in my brain kind of dissipated.
Once I started realizing what a difference these little breaks were making, there's no turning
back for me.
Make NPR's Body Electric Challenge.
Listen to the series wherever you get your podcasts.
It's a high stakes election year.
So it's not enough to just follow along.
You need to understand what's happening so you are fully informed on November.
Every weekday on the NPR Politics Podcast, our political reporters break down important
stories and back stories from the campaign trail.
Do you understand why it matters to you?
Listen to the NPR Politics Podcast wherever you get your podcasts.
This message comes from the Rich Roll Podcast.
For over a decade, Rich Roll has been exploring what sparks and sustains personal evolution.
Because change is possible and conversation matters.
Explore the Rich Roll Podcast at voicingchange.media.
Okay, so about a month ago, President Biden signed a tariff package to try and help build
a battery supply chain that doesn't rely on China.
And we've been in Alex city to see exactly what that will take.
So far, Westwater's graphite processing plant has solved their infrastructure problem.
They've got a key sewer pipe.
They've solved their technical problem, the whole potato issue.
But the plant is still not up and running.
And for Woody Beard, the mayor of Alex city, that has become an issue.
And it just dragged and dragged and dragged.
About May of 23, we got word that they had run out of capital.
And they were seeking $150 million in capital to try to finish.
$150 million.
To finish the plant, Westwater needs money.
And so as of today, they're not using that sewer pipe, which means Alex city is not
getting paid.
And remember, they have to take out a loan for $9 million.
You know, I want money.
I want to pay this damn loan.
We're paying out the sewer department fund.
So how do you feel about all this?
It pisses me off.
When I was at the plant, I told John from Westwater about my conversation with Woody.
So I mean, I think his real question is like, what's taking so long?
Well, actually it's a nice way to tie the story home is the tariffs.
Without those governmental assistance things, you're sort of spinning your wheels.
John says, look, they need $150 million to finish their plant.
They only got their first sales agreement a few months ago.
Now that they have that, it should be easier to convince lenders and investors to give
them the money.
And tariffs will give them an even better case.
Because like, it's hard to break into an industry where China is just so dominant.
You have all these startup costs and it's hard to convince companies to switch from their
normal graphite supplier to you.
But if tariffs make Chinese graphite more expensive, it starts to become an easier sell.
Of course, a lot of companies want government protection for their industry.
But tariffs are not necessarily good for the rest of us.
Like it's good for you guys that there's a tariff on graphite.
But the argument against tariffs is they make things more expensive for consumers, for
regular people.
So why should you guys get a tariff?
Well, okay.
So all in all, because it's not a terribly labor-intensive process, once we're doing it, the
cost should be very similar to China.
But figuring out how to do it is expensive.
The argument, John, is making here.
It's what economists would call the infant industry argument.
The idea is, it sometimes makes economic sense to temporarily protect a young industry that's
getting on its feet.
If it has some time and space to grow, it'll eventually be able to compete on its own.
And then producers and consumers might be better off.
We'd have more graphite for batteries, a more resilient supply chain, and maybe even
like some new technological innovations.
But it's honestly kind of murky, whether graphite processing in the United States is the
kind of infant industry where protection is justified.
For economists, the bar is really, really high.
And in practice, countries often are not using tariffs for reasons economists would approve
of.
They're really just trying to prop up some politically important industry.
One key thing economists look for, the tariffs should be temporary.
Eventually, the infant industry should grow up and be able to compete on its own.
John says he agrees with that.
A business that would have to rely on governmental support and incentives and tariffs and all
this stuff forever.
That's a dangerous business because policies change.
These things come and they go.
And so you cannot bet on these tariffs being around forever.
Right now, these tariffs are set to be indefinite.
Some will kick in this week, others in a couple of years.
So the US has time to build up its supply chain.
Though as we have seen, that's not going to be easy.
When I was at the not quite finished graphite processing plant, I saw something that reminded
me of this whole laborious supply chain building process laid out on a huge concrete slab
where piles and piles of steel beams, each labeled with some kind of particular letter
or number.
It was like a giant life size Lego set.
And there were two guys picking through them to find the exact steel piece they needed.
While I was there, I saw them fit one into place, literally putting in the latest piece
of this new battery supply chain.
But just at this one plant, this one building, there were still hundreds more pieces of steel
to go.
Over the past 10 or 15 years, there has been this quiet revolution at the grocery store.
The stuff we buy now comes in just this overwhelming number of sizes, from teeny snack sizes to mega
jumbo sizes and everything in between.
This is queso and a can.
Queso and a can.
But also queso in a jar.
Also queso in a small jar.
It's a lot of queso.
On our next episode, a packaging expert takes us to the grocery store and shares some of the
secrets behind how companies get us to buy more stuff.
After this job, I will never walk through a grocery store in the same way ever again.
You can't unsee it, right?
That's on the next Planet Money.
This episode was produced by Emma Peasley and edited by Jess Zhang.
It was fact check by Sierra Juarez and engineered by James Willens.
Our school mark is our executive producer.
Special thanks to Denise Walls, Raka U-House, Gordon Hanson, Eladia Mazzoco, and Penny
Goldberg.
I'm Sally Helm.
And I'm Keith Romer.
This is NPR.
Thanks for listening.
Last year, over 20,000 people joined the Body Electric Study to change their sedentary
screen-filled lives.
And guess what?
We saw amazing effects.
Now you can try NPR's Body Electric Challenge yourself.
Listen to updated and new episodes wherever you get your podcasts.
Black perspectives haven't always been centered in the telling of America's story.
Now, we're taking center stage.
Introducing NPR's Black Stories, Black Truths, a collection of Black-led stories from NPR's
pasts, search NPR Black Stories, Black Truths, wherever you get your podcasts.
This is my voice.
It can tell you a lot about me, and I'm not changing it for anyone.
In NPR's Black Stories, Black Truths, you'll find a collection of NPR episodes centered
on the Black Experience.
NPR Black Stories, Black Truths, wherever you get podcasts.
