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American Resources Policy Network
Promoting the development of American mineral resources.
  • China’s Grand Strategy to Exploit United States’ “Soft Underbelly” Goes Beyond Rare Earths

    Much is being made of China’s recent threats to cut off Rare Earth exports to the United States, and the issue has – finally – helped bring the issue of mineral resource policy reform to the forefront. 

    However, as Ian Easton, research fellow at the Project 2049 Institute and author of The Chinese Invasion Threat, writes in a new piece for The National Interest, “[t]he game is far bigger and the stakes higher than even many national-security experts seem to realize.” 

    Easton argues:

    “Beijing’s monopolization of the global rare earths industry gives it far more than a card to play in an escalating trade war. (…)

    In the minds of Chinese strategists, this issue is ultimately about which nation, China or America, wins the central struggle of the twenty-first century, the race for world leadership. Obviously, they intend to win and to win big.”

    He references official Chinese propaganda which underscores the Chinese Communist Party’s (CCP) position that REEs are “‘strategic resources’ for the ‘six new technology groups’ that Beijing sees as engines of China’s future strength,” and points to a 2015 publication by the Chinese military to underscore that China has “long viewed rare earths as a domain of strategic competition.

    In fact, as ARPN’s principal Dan McGroarty pointed out as early as 2010, Chinese high regard for REEs and their potential dates back as far as almost 30 years ago, when former Prime Minister Deng Xiaoping reportedly said:
    “There is oil in the Middle East. There are rare earths in China. We must take full advantage of this resource.” 
    The 2015 Chinese military publication Easton cites darkly stated:  “Now the struggle between nations for these strategic resources is becoming increasingly fierce. So we must . . . strengthen our protection and control over these strategic mining resources.”
    In his article, which is well-worth a read in its entirety, Easton outlines how “China’s authoritarian leaders have successfully executed a series of centralized plans to lock up the global rare earths market.”

    Easton argues that is has been a combination of China’s ability to leverage “predatory economic policies” that exploit the openness of the international system, and a “great wall of protectionism” that has helped the country gain the upper hand on the Rare Earths front. 

    The results, as followers of ARPN well know, have been “jaw-dropping,” – a near-total supply monopoly, and, as a fresh look at recent patent filings shows, an increasing monopoly on the know-how and processing methodologies. As James Kennedy, president of a St. Louis, Missouri-based consultancy found, China had filed for 25,911 patents on all the rare earth elements, as of October 2018, which is “far ahead of 9,810 by the US, 13,920 by Japan and 7,280 by the European Union since 1950 when the first US filing was made.” 

    Easton argues that China is ready to leverage the same basic strategy it has successfully implemented in the REE field “across all the drivers of future military, technological, and economic growth, from pharmaceuticals to aviation and artificial intelligence to 5G communications.”

    Easton’s bottomline should be a wake up call for U.S. policy makers:

    “With minerals, China has found a soft underbelly to exploit. (…)

    It is imperative for the continued security and prosperity of the United States that Washington wakes up to China’s strategic successes (and its own policy shortcomings) and begins to act accordingly.

    So far, little has been done to ensure America is able to supply its own rare earth mineral needs. This leaves the nation, and especially the military, in a precarious situation. The Chinese government views the United States as an enemy and has demonstrated that it will go to great lengths to undermine American national-security interests. So, too, should American leaders be willing to take all necessary measures to break free of Beijing’s iron grip. Prioritizing American rare earths mining and encouraging domestic investment, production, and stockpiling is the place to start.”

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  • Critical Mineral Uranium: No Import Quotas, But “Significant Concerns” Prompt Fuller Analysis of Nuclear Fuel Supply Chain

    Primarily known for its energy applications, (and thus falling under the purview of the Department of Energy) uranium may have not been much of a focal point for ARPN in the past.  

    However, the policy issues surrounding uranium – many of which have a familiar ring to followers of ARPN – increasingly warrant a closer look.  Last year, the Department of Interior included uranium in its list of 35 metals and minerals deemed critical from a U.S. national security and economic perspective – for good reason.

    As Congressmen Paul Gosar (R-Ariz.), Rob Bishop (R -Utah, Mark Meadows, R-N.C.) outlined in an op-ed for Fox News earlier this month, “U.S. utilities rely on foreign sources for 98 percent of the uranium they use to fuel the nuclear power plants that provide 20 percent of our country’s electricity” – a fact that not only poses a significant national security risk, but harms domestic industry.

    They argued: 

    “Uranium [fuels] our nuclear Navy. But instead of buying from the domestic uranium mining companies that once thrived in the West, utilities are enriching adversarial countries like Russia and China.

    Following their carefully orchestrated geopolitical plan, Russia and its allies flood the global market with uranium from state-owned companies, making it impossible for America and other free-market economies to compete.

    Meanwhile, quietly and gradually, China has been buying up previously free-market uranium mines to control global supply.

    Rather than keep good jobs here at home and depend on our own resources to power the electric grid, the U.S. jeopardizes national security by relying on nations that have demonstrated their will to undermine our defense infrastructure and our economy, and to do us harm.

    As a result, America’s uranium mining industry is dying. U.S. uranium mining companies produced 721,000 pounds of uranium last year – only enough to fuel one nuclear reactor.”

    The Congressmen, writing on behalf of the bipartisan Western Congressional Caucus, called on U.S. President Trump heed a recommendation to impose an import “quota that reserves a relatively small 25 percent of the U.S. market for the domestic uranium mining industry.”

    The recommendation was initially put forth by two domestic uranium mining companies that in January 2018 had requested a Commerce Department investigation under Section 232 of the Trade Expansion Act, with a presidential decision on the findings of the DoC investigation expected by July 15 of this year. 

    Taking many by surprise, however, while agreeing with the Commerce Department that the United States’ reliance on foreign uranium “raise significant concerns,” President Trump last week announced that he will not impose quotas on uranium imports. This comes a  somewhat unusual move for a President who has invoked national security concerns when calling for restricting foreign metal imports elsewhere.

    The President instead announced the formation of a “U.S. Nuclear Fuel Working Group” to conduct a “fuller analysis of national security considerations with respect to the entire nuclear fuel supply chain.”

    In his memorandum announcing his decision on July 12, the President states:

    “I agree with the Secretary that the United States uranium industry faces significant challenges in producing uranium domestically and that this is an issue of national security.  The United States requires domestically produced uranium to satisfy Department of Defense (DOD) requirements for maintaining effective military capabilities — including nuclear fuel for the United States Navy’s fleet of nuclear-powered aircraft carriers and nuclear-powered submarines, source material for nuclear weapons, and other functions.  Domestic mining, milling, and conversion of uranium, however, while significant, are only a part of the nuclear supply chain necessary for national security, including DOD needs.”

    Over the next 90 days, the The Working Group “shall examine the current state of domestic nuclear fuel production to reinvigorate the entire nuclear fuel supply chain, consistent with United States national security and nonproliferation goals.”

    We’ll be keeping tabs on the Working Group’s findings, so check back for updates.  
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  • Moving Beyond the Report Stage? – Specter of REE Supply Disruptions Prompts Congressional Action on Critical Minerals

    The U.S. and China have resumed trade talks after last month’s meeting between U.S. President Trump and Chinese President Xi Jinping on the sidelines of the G-20 summit in Osaka broke a deadlock — but key issues remain far from settled. Against the backdrop of both sides preparing for a protracted battle, Jeff Green, president [...]
  • Happy 4th of July! The Road to Resource Independence

    Another trip around the sun, and once again we find ourselves stocking up for barbecues, fireworks and parades in honor of the men and women who have fought on our behalf, and continue our safeguard our freedom today. We’ve always used the occasion of Independence Day to remind ourselves that “while we cherish the freedom we [...]
  • Measuring Criticality in Today’s Interconnected World

    Against the backdrop of the current U.S.-Chinese tensions over Rare Earth Elements and the “global battery arms race,” Morgan D. Bazilian, Professor of Public Policy and Executive Director of the Payne Institute at the Colorado School of Mines, argues that the United States must “widen its consideration of critical materials past a limited understanding of security in [...]
  • ARPN’s McGroarty: Trade War Between U.S. And China One Front in Larger Tech War for Dominance of 21st Century Technology Age

    “The specter of using rare earths as an economic weapon makes clear that the current trade war between the U.S. and China is in fact one front in a larger tech war – a competition to see which country will dominate the 21st Century Technology Age,” says ARPN principal Dan McGroarty in a new piece [...]
  • Podcast: ARPN’s Dan McGroarty Discusses U.S.-Chinese Trade Tensions Over REEs

    As the world looks towards Osaka, Japan, where world leaders will gather for the 2019 G20 Summit and Ministerial meetings later this week, former Missouri Speaker of the House Tim Jones discusses the current trade conflict between the United States and China and the implications of the looming supply disruptions for U.S. domestic industries as [...]
  • Global Times: REE Supply Restrictions Likely for U.S. Military Equipment Firms

    The specter of China playing the “rare earths card” is looming larger this week.   According to the Global Times’s twitter feed, U.S. military equipment firms will likely face restrictions of Chinese Rare Earth supplies in the near future, as China’s economic planners will “study and roll out policies on rare earths as soon as possible.”     [...]
  • CBS’s 60 Minutes Airs Updated Rare Earths Segment Featuring ARPN’s McGroarty

    Bearing testimony to the significance of the looming specter of China playing the “rare earths card,” CBS’s 60 Minutes this weekend aired an update to its 2015 segment on rare earths featuring ARPN principal Dan McGroarty.  You can watch the segment on the CBS website, which also features a written transcript. There is hope that the [...]
  • Commerce Department Releases Long-Awaited Interagency Report on Critical Minerals

    On Tuesday, June 4, the U.S. Department of Commerce released the “interagency report that was submitted to the President pursuant to Executive Order 13817, A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals.”  The report, which, according to the agency’s official announcement, “contains a government-wide action plan, including recommendations to advance research and development [...]

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