In case you hadn’t noticed amidst holiday preparations, travel arrangements and the usual chaos of everyday life – 2019 is just around the corner, and with that, the time to reflect on the past twelve months has arrived. So here is ARPN’s recap of 2018:

Where we began. Unlike previous years, we started 2018 with an unexpected level of optimism on the resource policy front. Not only had USGS released a new study in December of 2017 entitled “Critical Minerals of the United States” which discusses 23 mineral commodities USGS deems critical to the United States’ national security and economic wellbeing, but the report had been followed by what we dubbed “an early Christmas present:” A new executive order directing the Secretary of the Interior to publish a list of critical minerals to be followed by a comprehensive report spearheaded by the Department of Commerce outlining a strategy to alleviate our over-reliance on foreign minerals.

At last, a list. The DOI List was published in February, with a public comment period running through March. ARPN’s Daniel McGroarty filed two sets of comments, the first identifying a group of “gateway” metals critical for defense applications but absent from the DOI List, and the second articulating the gateway/co-product relationships between metals and minerals on the DOI List. While the gateway metals did not make the cut, we considered the final list, released in May, a “great starting point” leaving the question of “how the U.S. Government can match policy to the priority of overcoming our Critical Minerals deficit.”

Unfortunately, to date, that question has not fully been answered, and the Secretary of Commerce’s report subsequent to the above-referenced Executive Order has yet to be released. But the stage has been set.

Progress was made on several other fronts:

• Public-private partnerships to advance R&D in materials science — which we have been featuring as part of our “Profiles of Progress series” — have yielded positive results and have been expanded to cover additional metals and minerals
• Awareness of the important inter-relationship of “Gateway Metals” and their “Co-Products,” which we highlighted in our April 2018 report is growing, and is becoming a part of the broader mineral resource policy conversation. See for example Ned Mamula’s and Ann Bridges’s just-released book “Groundbreaking! America’s New Quest for Mineral Independence.
• A just-outlined partnership agreement between Australia and the United States on critical minerals to foster mineral research and development cooperation between the two countries is a welcome development. It could also serve as a precursor to deepening and revitalizing the National Technology Industrial Base (NTIB), which, established in the 1990s to foster technology links between the U.S. and Canada, was expanded in 2016 to include Australia and the UK.
• And while there has not been a tangible result in terms of the formulation of a critical minerals strategy, another landmark study released this year has underscored the need for comprehensive reform, specifically from a national security perspective: The long-awaited Defense Industrial Base Review outlined nearly 300 supply chain vulnerabilities and sounded the alarm on China represents a significant and growing risk to the supply of materials deemed strategic and critical to U.S. national security. As one of the ARPN expert panel members phrased it: “Fortunately, the report goes beyond problem identification to provide a Blueprint for Action. Though many of these are locked away in a classified annex to the report, the White House has provided some clues as to how it wishes to proceed.”

Opportunities and upticks. In terms of trend lines, the rise of battery tech continues to dominate the agenda, as evidenced by the volume of posts on our blog covering this field. And, based on the analysis provided by our friends at Benchmark Mineral Intelligence we expect this development to continue in 2019.

We have also witnessed an uptick in activity on the trade front in 2018 with tariffs and trade agreements dominating the agenda.

• Chinese-U.S. tensions escalated in 2018 resulting in the imposition of various tariffs targeting the other nation. Initially included on a provisional list of tariffs to be imposed on Chinese goods released by the Office of the U.S. Trade Representative (USTR) earlier this summer, Rare Earth metals and their compounds were ultimately excluded from the final list of tariffs, underscoring the growing awareness of their strategic importance in the United States. Other omissions from the tariff lists give a window into strategic vulnerabilities.
• The U.S. Administration won agreement to replace NAFTA with the USMCA — the new U.S.-Mexico-Canada trade agreement in November. The talks had opened a window to drop the so-called Section 232 tariffs — named for a seldom-used section of the 1962 Trade Expansion Act — on steel and aluminum imports from Canada and Mexico, which stand in the way of a fully integrated North American defense supply chain and, particularly with regards to Canada “ignore nearly 80 years of deep defense cooperation with our northern neighbor.” Unfortunately, the provision remained intact in the November agreement, but, as ARPN’s Daniel McGroarty recently outlined in a piece for The Hill: “The opportunity is here, to use the momentum generated by the new USMCA agreement as a springboard to take the strategic North American alliance to a new level.”

Meanwhile, a glaring missed opportunity in 2018 has a silver lining:

Congressional conferees for the 2019 National Defense Authorization Act (NDAA) failed to retain key critical minerals provisions in the final conference report including the Amodei amendment ARPN followers will be familiar with. And in the one clause in the defense bill that does touch on metals and minerals – a section entitled “Prohibition on acquisition of sensitive materials from non-allied foreign nations” – while cobalt appears as a “sensitive material” (in the form of samarium-cobalt permanent magnets), the list of non-allied foreign nations from which the U.S. is not allowed to acquire the materials does not include DRC Congo.

However, the NDAA’s Section 873, “Prohibition on acquisition of sensitive materials from non-allied foreign nations,” amends Subchapter V of chapter 148 of title 10, U.S. Code by inserting section 2533c – which, among other things, effectively prevents the Pentagon from sourcing of Rare Earth Magnets from China. This is a potentially precedent-setting provision which Jeffery A. Green, president and founder of J. A. Green & Company and member of the ARPN panel of experts called “the single biggest legislative development in the rare earth sector since the 2010 Chinese embargo created an awareness of our military’s reliance on foreign rare earth materials.”

On the whole, 2018 stands for incremental progress on the mineral resource policy front. However, how we harness this progress in the coming months will decide how future generations will judge this year in the history books. The potential for meaningful reform is here and the stage is set. The stakes are too high to let this opportunity slip away.