critical minerals

Against the backdrop of an already volatile geopolitical context with hot wars raging in Central Europe and the Middle East and the Tech War pitting China versus the U.S. intensifying, the U.S. Department of Defense has announced the release of its first-ever National Defense Industrial Strategy (NDIS), which, according to the White House’s November 2023 statement is to “guide engagement, policy development, and investment in the defense industrial base over the next three to five years” and “ensure a coordinated, whole-of-government approach to and focus on the multiple layers of suppliers and sub-suppliers that make up these critical supply chains.”

As Assistant Secretary of Defense Dr. Laura D. Taylor-Kale told the media during the official press briefing on Nov. 11, 2024:

“this is the first time that we’ve really put pen to paper to map out a strategy and a vision to create a modernized, resilient, innovative defense industrial ecosystem.”

Citing specific threats to U.S. national security – adversaries building up their military power to “levels not seen since World War II”, China’s increasingly aggressive use of “gray zone tactics across all elements of national power,” Russian aggression and Israel’s “existential fight against Hamas” – Dr. Taylor-Kale says the NDIS “seeks to answer the question, ‘How do we prioritize and optimize defense needs in a competitive environment undergirded by geopolitical, economic and technological challenges?’”

According to Acting Principal Deputy Assistant Secretary of Defense Halimah Najieb-Locke, “the NDIS is grounded in the National Defense Strategy, with a special emphasis on integrated deterrence and building that resilient ecosystem” and reflects “the Biden-Harris administration’s focus on securing and reinvigorating our defense supply chains by incorporating the presidential direction and guidance from Executive Order 14017 on America’s Supply Chains.”

The Strategy outlines four priorities which ARPN will detail further in a separate post:

1. Resilient supply chains 
2. Workforce readiness 
3. Flexible acquisition 
4. Economic deterrence 

Of particular interest to followers of ARPN is Dr. Taylor-Kale’s highlighting of the importance to streamline and make more efficient use of investment tools available to the U.S. government under the Defense Production Act and the Industrial Base Analysis Sustainment Program to strengthen U.S. domestic critical mineral supply chains, tools which Dr. Taylor-Kale admits have been “underutilized” to date.

Says Dr. Taylor-Kale:

“(…) as we have our visibility and mapping efforts ongoing, we’re able to work with the services and marshal the entire defense budget where possible, where we have programs of record to say, how are we overcoming this? How are we using acquisition strategies that actually targetareas of concern that industry has? And how are we things such as multiyear procurements, advance procurements, purchase commitments?

There are a number of tools and flexible acquisition strategies that we can employ to really drive investment into this area in a way that before now has been disparate, and so you can’t feel the impact. So we’re answering the industry’s call for consistent demand signal by organizing ourselves and targeting our efforts.

She adds:

“As much as we have used and really expanded investments using the Defense Production Act over the last few years, we’ve really only used a quarter of the authorities, really looking at the authorities.

So our goal with the implementation plan, particularly the public-facing one, will really outline some of the key areas that are important and that we, within A&S, within Industrial Base Policy, have control over, looking at, for instance, critical minerals and strategic materials, where we’ve already done a number of key investments. Since the beginning of the administration, we’ve done almost $1 billion just in critical minerals and strategic materials.

And we will obviously, just as the DASD noted, will continue working in these areas because of its importance for supply chain resilience and some of the chokepoints (…).”

A detailed implementation plan will be developed in the coming weeks, with hopes of publishing an unclassified version in February and a more detailed classified version sometime in March.

The full press briefing transcript can be accessed here, while the full text of the strategy and NDIS Fact Sheet sheet can be downloaded here.

Happy New Year! They may say “Out with the Old, in with the New,” but if the waning days of 2023 are any indication of what is to come in 2024, we’ll likely continue down the path we’ve been on for the past twelve months, at least when it comes to the Tech Wars.

Somewhat lost in the shuffle of work parties, family gatherings and holiday shopping was the Chinese government’s announcement on December 21 that it would ban the export of technology to make rare earth magnets, adding to a ban already in place on extraction and separation technologies for REEs.

In what Reuters calls an “escalating battle with the West over control of critical minerals,” Beijing significantly tightened rules guiding exports of several metals in 2023. (see ARPN’s reprise post of 2023’s main events in the critical minerals realm for more on China’s tightening of the export control ratchet).

Don Swartz, CEO of American Rare Earths, a company currently developing a REE mine and processing facility in Wyoming, sees China’s move, which follows a November 2023 directive from the Chinese government to REE exporters to report transaction details, as a clear sign that “China is driven to maintain its market dominance,” with Swartz adding that “[t]his is now a race.”

Meanwhile, for all the tit for tat in the grander scheme of the Tech Wars and a flurry of activity on the resource policy front, the West has struggled to effectively decouple its critical mineral supply chains from China.

In the case of rare earths, China, which still accounts for nearly 90% of global refined output, controls the refinement process, and area that has Western REE companies struggling because of “technical complexities and pollution concerns” in the solvent extraction process, as Reuters points out.

Nonetheless, experts believe the latest announcement should be “a clarion call that dependence on China in any part of the value chain is not sustainable.” 

The West may have kicked off the new year already, but Chinese New Year is still upon us. 2023, the Lunar Year of the Rabbit, was supposed to bring us “relaxation, fluidity, quietness and contemplation.”  What we got, was an escalation of the Tech Wars, more resource nationalism and more geopolitical instability.  At the same time, these developments also served as catalysts kicking efforts to strengthen domestic supply chains into high gear.

With 2024 moving us into the Lunar Year of the Dragon, the overall energy of which is said to be “vital and competitive,” we may be in for a tumultuous ride.

Read ARPN’s Year in Review – A Look at 2023 Through the Prism of Critical Mineral Resource Policy here. 

 

– A Look at 2023 Through the Prism of Critical Mineral Resource Policy -  In the waning days of December 2022, ARPN and others were gearing up for a watershed year in the critical minerals realm – a year which could be a “breaking point if there is to be an EV revolution/transformation,” and one that would [...]

While critical mineral supply chain security has become more than an obscure concept these days, many people will still associate metals like lithium, cobalt or maybe rare earths with it, rather than some of the more mainstay metals. However, that does not mean we should not be worried about their supply. As Dario Pong, founder [...]

While last month’s meeting between U.S. President Joe Biden and his Chinese counterpart Xi Jinping was aimed at reducing tension between the two global powers, Evan Medeiros, a senior fellow on foreign policy at the Centre for China Analysis who served on the National Security Council during the Obama administration, believes that “the U.S.-China relationship is entering [...]

While the recent meeting between U.S. President Joe Biden and his Chinese counterpart Xi Jinping on the sidelines of the APEC summit in San Francisco last month was seen by some as a step towards alleviating tension between the two global powers, U.S. Secretary of Commerce Gina Raimondo’s latest speech and subsequent comments at the Reagan [...]

As demand for critical minerals continues to surge against the backdrop of the accelerating push towards net zero carbon emissions and supply chain challenges in the face of growing geopolitical volatility, the United States has taken several important steps to strengthen U.S. domestic critical mineral supply chains. Sometimes the obvious can be overlooked:  As a case [...]

 With hot wars raging in Central Europe and the Middle East, do we have bandwidth to focus on a war that’s metaphorical – for now, at least:  The Tech War pitting China versus the U.S.? Against the backdrop of China’s recently announced restrictions on graphite exports (see ARPN’s coverage here) set to take effect on Friday, [...]

It’s visualization time. And while your Thanksgiving-focused brain may trick you into believing the infographic you see here represents the proportions of turkey to sides, Visual Capitalist has put together an important reminder for those working in the realm of mineral resource policy, and quite frankly, everyone else. Using USGS data, the infographic (click here for a full-size look [...]

The long-planned and carefully crafted meeting between U.S. President Joe Biden Chinese President Xi Jinping near San Francisco may have gone off without a hitch, and defense dialogues between Beijing and Washington may have been restored, but analysts are not entirely optimistic that re-opened lines of communications will ultimately resolve deeply-rooted disagreements between the two countries on a [...]