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American Resources Policy Network
Promoting the development of American mineral resources.
  • Guest Commentary: Jeff Green On New Congressional REE Policy Initiative

    The following is a guest post by American Resources expert and J.A. Green & Company president and founder Jeffery A. Green

    The United States has placed itself in a very precarious situation with respect to its ability to produce and refine strategic and critical materials. Over the past few years we have willfully ceded our last remaining production capacity for rare earth elements to the Chinese who have readily adopted the role as the world’s monopolist when it comes to the production of these crucial elements. In fact, China now controls more than 90 percent of the global production of rare earth elements.

    While rare earths are small, yet critical materials essential to the proper functioning of society’s high tech items, smart phones, computers, and televisions, they are also essential for the proper function of numerous defense-related end items including aircraft and missiles. Without access to these materials, we risk having to revert to Vietnam-era technologies, not a prudent strategy for the world’s greatest fighting force.

    Compounding the problem, the only major domestic producer of certain rare earth products, a major publically traded United States Corporation, filed for bankruptcy in 2015 after compiling more than $1 billion in debt. The company subsequently shuttered and disassembled its U.S. mining facility and sold a portion of its assets to China to pay creditors. Thus, the United States was left with no domestic production capacity for certain strategic and critical materials. Any restriction on access to foreign rare earth elements would leave the U.S. without the ability to produce a host of defense-related components and in a risky and precarious security situation.

    Legislation recently introduced by Congressman Duncan Hunter (CA) would aim to rectify this dangerous hole in U.S. national security policy. The Materials Essential To American Leadership and Security Act of 2017 or METALS Act would require certain major defense acquisition programs (“MDAP”) to forgo a small fraction of their overhead costs in order to reestablish a domestic industrial base for rare earth elements and other materials deemed strategic and critical for defense applications. Aircraft and missile MDAPs which utilize strategic and critical materials would be required to contribute just one percent of their internal programmatic administration funds to create a working capital fund designed to reignite the domestic industrial base for strategic and critical material production and separation. The revolving fund, to be known as the Strategic Materials Investment Fund, would issue five-year, interest-free loans to domestic companies seeking to bridge the “Valley of Death” and provide an alternative to Chinese-produced materials. Additionally, the fund would reimburse defense contractors should they incur higher prices for procuring domestically produced strategic and critical materials.

    The METALS Act would support and strengthen our domestic industrial base by providing the necessary capital to companies attempting to ensure American independence from non-allied foreign powers and provide a safe and secure supply chain for the Department of Defense. Funding for the Strategic Materials Investment Fund is specifically derived from the Department of Defense’s internal programmatic administration funds to alleviate any impact on the procurement of weapons systems. The bill would in no way impact the quantities of weapons systems to be procured.

    The METALS Act is the first step toward reestablishing safe and secure domestic supply chains for strategic and critical materials and ensuring the United States always has access to materials essential for defense and national security.

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  • Cobalt – First Steps Towards Reducing Mineral Resource Dependencies?

    recent piece for InvestorIntel zeroes in on a metal which, due to its growing use in battery technology, coupled with a challenging supply scenario is increasingly afforded “critical mineral” status – Cobalt.

    A co-product of Nickel and Copper, the metal’s recent history, as author Lara Smith argues, has been “chaotic.” ARPN agrees that about sums it up. Criticism regarding the production conditions in the Democratic Republic of the Congo (DRC) — from which 62 percent of global refined Cobalt is sourced — mounted in 2016.  93 percent of the Cobalt refined in China – the world’s biggest Cobalt consumer – originates in the DRC, which, at 3,400,000 metric tons, is also home to the world’s largest Cobalt reserves.  Production conditions in the DRC, which in some cases include child labor and poor environmental standards, have lead battery makers to search for Cobalt sources outside the African country.

    Smith highlights Elon Musk’s ambitious claim that Tesla will “produce 500,000 electric vehicles a year by 2018” and that the Cobalt used “will be sourced exclusively in North America.”

    And indeed, it looks like there is a flurry of activity in this area:

    A Nickel-Copper mine in Michigan recently ramped up production of Cobalt-bearing nickel concentrate (we highlighted ithere), but to date our domestic manufacturers remain import dependent for 75% of the Cobalt they consume.  Smith features a new Cobalt development project – involving “a high-grade and primary cobalt deposit” in Idaho in her post — which may decrease this number going forward. Cobalt co-product production may furthermore be feasible in a number of other states, including Alaska, California, Minnesota, Missouri, Montana, Oregon and Pennsylvania.

    As ARPN expert panelist and Benchmark Minerals Managing Director Simon Moores, who has called Cobalt the “most critical of the battery raw materials,” points out, demand for the metal is growing:

    “With a lithium ion battery production surge well under way – and Benchmark recently revising its megafactories tracker to now 14 that are under construction ranging from 3-35 GWh capacity – lithium ion battery demand for cobalt is set to exceed 100,000 tpa by 2020.”

    In light of these numbers, the above-referenced projects are welcome developments that will help ease our over-reliance on foreign mineral resources -– but they should ultimately be part of a comprehensive mineral resource strategy our country has been sorely lacking.

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  • USGS Report Bellwether for National Security Crisis?

    For over two decades, the United States Geological Survey has released its Mineral Commodity Summaries report.  And while ARPN followers will know how important this publication is, as it provides a snapshot of our nation’s mineral resource dependencies, in most years its release has gone largely unnoticed beyond the circles of mineral resource wonks. This year, a [...]
  • As Resource Dependence Deepens, Miners Pivot Back to U.S. For Exploration

    Against the backdrop of market prices recovering and supply woes looming, mining companies are expected to increase spending on exploration for the first time in five years, reports news agency Reuters. In what may spell good news for the United States, analysts anticipate the biggest expenditure increases to occur in the United States, Canada and Australia, all [...]
  • China’s REE Stranglehold Comes Back Into Focus

    If the first few weeks with a new administration at the helm in Washington, DC are any indication, we will see more efforts to make sweeping changes in federal policy in the coming weeks.  One area where President Donald Trump promised changes on the campaign trail is trade – and specifically relations with China. In [...]
  • USGS: U.S. Mineral Resource Dependence Deepens in 2016

    It’s out! Followers of ARPN may already have a hunch of what we’re referring to, as every year around this time we await its release with somewhat bated breath: The USGS’s updated Mineral Commodity Summaries report. Let’s start with the good news:  On the whole, the estimated value of total nonfuel mineral production increased slightly in [...]
  • Interview: AEMA’s Laura Skaer – The Mining Industry’s Challenges and a Look Ahead

    For the last few months, politics has sucked up much of the oxygen in Washington, DC and around the country.  With the inauguration of the 45th President of the United States behind us, many of us are hopeful that the time has come to finally shift the focus away from politics toward policy. Against the backdrop [...]
  • McGroarty on Critical Minerals: “It’s Not Your Grandfather’s Infrastructure”

    The New Year is now a little over a week old and the inauguration of the 45th President of the United States is just around the corner.  And while some are still dwelling on 2016 (we offered our post mortem at the end of the year), the time has come to look at what’s in store. One of [...]
  • 2016 – A Mixed Bag for Mineral Resource Policy

    It’s that time of the year again.  And as people are gearing up for the New Year, we are taking the opportunity to take stock of the last twelve months, and want to highlight a few select notable developments of relevance to ARPN followers. From a mineral resource policy perspective, we saw some positive developments [...]
  • Through the Gateway: A Scholarly Look

    Over the course of the past few months, we have featured two classes of metals and minerals, which we believe deserve more attention than they are currently being awarded.  Expanding on the findings of our 2012 “Gateway Metals and the Foundations of American Technology” report, in which we focused on a group of five “Gateway” metals which [...]

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