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American Resources Policy Network
Promoting the development of American mineral resources.
  • 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 of Washington, D.C.-based government relations firm J.A. Green & Company and member of the ARPN panel of issue experts, zeroes in on the potential ramifications of a looming REE supply cutoff on the U.S. defense industry and appropriate responses in a new piece for Defense News.

    Green laments that supply chain experts for years warned about the “potential for China to cut off access to the critical materials in almost every major weapon system”– but their concerns were often “downplayed by free-trade theorists and policy makers who claimed that China would not take such aggressive action to upset the market.” Green argues that recent statements made by China’s state economic planner, the National Development and Reform Commission, or NDRC, suggest otherwise, and says that “the Chinese strategy is based on a harsh calculus:”

    “Depriving only defense contractors of rare earth supplies will drive costs and production lead times up for the U.S. military and cause concern within the U.S. government, but it will not lead to widespread public discontent. Any student of Clausewitz can see the targeting of a particular center of gravity in the U.S. with this move. The strategy threatens U.S. military supplies rather than cheap consumer goods in what may be an attempt by China to force U.S. policymakers to abandon efforts to counter abusive Chinese trade practices in favor of addressing greater national security concerns.”

    Thankfully, Green says, the U.S. is taking steps to secure supplies of rare earths and other critical materials. He specifically highlights the long-awaited Critical Minerals Strategy put forth by the Commerce Department in early June which  “begins operationalizing the identification and mitigation of supply chain gaps” and a passage in the FY 2019 National Defense Authorization Act which limits “the ability of defense contractors to use rare earth magnets from China (and other non-allied countries).”  

    This, coupled with DoD beginning to query American contractors about their “ability to begin rebuilding pieces of the supply chain, including rare earth separation and magnet production” are “prudent and necessary,” says Green, who concludes:

    “[T]here is more to be done, particularly in Congress, to defend against hostile foreign actions. Mine-permitting reform would help get U.S. supplies of critical minerals flowing again, and Alaska’s Republican Sen. Lisa Murkowski’s American Mineral Security Act and Nevada’s Republican Rep. Mark Amodei’s mine-permitting reform bill both provide strong momentum forward on that effort.

    Pentagon programs such as the Defense Production Act Title III — which was responsible for the inquiries into rare earth separation and magnet production — and the Industrial Base Analysis and Sustainment are both good avenues through which the government can directly invest in promising American manufacturers. Congress now must provide them with adequate funding (…).

    The U.S. needs to seriously address its critical materials vulnerabilities, which it has begun to do with recent reports. But reports can only show the way forward; it is now time for Congress to enact prudent policies and to provide the resources to finally blunt the rare earth and critical materials trade weapon once and for all.”

    It appears, though, as if policy makers are finally realizing the urgency of the situation.  Today’s Wall Street Journal features a new bill by Sen. Marco Rubio (R., Fla.) which would “allow investors to form a cooperative that is exempt from antitrust laws, in an attempt to shield it from government-backed competition from China and volatile markets that have made it virtually nonexistent in the U.S. The Secretary of Commerce would secure a charter for the business, though it would need to be privately funded and operated under the terms of the legislation.”

    In a statement, Rubio explained that:

    “[c]ontinued U.S. dependence on China for the mining and processing of rare earths and the manufacture of those metals into useful products is untenable,” because “[i]t threatens our national security, limits our economic productivity, and robs working-class Americans of future opportunities for dignified work.”

    The cooperative would be “a monopoly open to investment from the Defense Department, the military’s private suppliers and technology companies, among others,” with international investors allowed to join contingent on approval from the Committee on Foreign Investment in the U.S., known as Cfius, reports the Wall Street Journal — a contingency that is likely owed to the much-criticized fact that the only current U.S. REE producer has a Chinese minority stakeholder.

    With the stakes so high, it is good to see that policy makers appear willing to move beyond the report stage.

    We’ll be keeping tabs on critical minerals legislation, including Sen. Rubio’s REE legislation and others as they move forward, so check back for updates. 
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  • Mamula and Bridges: Hardrock “Modernization” Bills Could Do More Harm Than Good

    “Does America stand for self-reliance and innovative discovery of critical minerals for our economy and national defense and security? Or will Congress drive the fatal stake through the heart of our struggling domestic metals mining industry?”

    According to a new Washington Examiner piece by Cato Institute Adjunct Scholar in Geosciences and ARPN expert panel member Ned Mamula and author Ann Bridges, we will soon find out. 

    The authors of “Groundbreaking! America’s New Quest for Mineral Resource Independence” argue that two pieces of proposed mining-related legislation – touted as “modernizations, overhauls or replacements of the Mining Law of 1872” – would do more harm than good. 

    Write Mamula and Bridges:

    “At first blush, overhauling the Mining Law sounds appealing and overdue. But H.R.2579 seeks to boost royalties to 12.5% on new mining operations and 8% on existing mines for the “privilege” of extracting America’s public lands mineral wealth that is so vital to our nation’s defense, computing, communication, transportation, medical, renewable energy and battery technologies.

    Under current mining law, hardrock (metal) producers already pay hundreds of millions of dollars annually in the form of private state royalties, and a variety of federal and state taxes on claim fees, mining activities, products and payroll, plus an existing 2% royalty fee on minerals extracted from Federal lands based on current market value of minerals delivered to a smelter.

    To better place America on a path to mineral independence, we should be reducing the overall costs of mining, not adding to them.”

    Mamula and Bridges lament that the bills under consideration “appear to dissuade new domestic exploration and production, including the all-important critical minerals and ‘green’ technology metals,” and that proposed fee increases “could well bankrupt existing miners operating on razor-thin margins.”

    Already facing competition from massive Chinese and Russian state-owned companies — many of which may not be up to par when it comes to social and environmental standards — and politically-motivated market distortions, U.S. companies would suffer if the above-referenced bills were to move forward, say Mamula and Bridges. They conclude:

    “In order to put our country on a course to achieve mineral independence, we should not penalize our mining entrepreneurs. Instead, we should incentivize them by reducing the overall costs of mining, enabling them to compete globally. We should also bring production home, by providing increased access to federal mineral lands.

    Both bills would take America’s national interest in the wrong direction, even as China’s overt posturing of its rare earth monopoly bolsters its leverage against the U.S. negotiating position, which is weakened by a lack of any long-term strategic plan for domestic mining and critical minerals production.

    To remain strong, our nation needs a dependable supply chain of critical minerals and metals that will only come from a durable Mining Law. The overhauls proposed in the two congressional bills would have crippling consequences that would reverberate through every sector of our economy and undermine our national security.

    If passed, these bills would gut the entrepreneurial spirit of the Mining Law by imposing stricter anti-mining regulations, repressive royalties, and impossibly short lifetimes for mining claims. These changes would spell the beginning of the end for domestic hardrock exploration and mining and put thousands out of work. Worse, they would increase our already dangerous dependence on foreign sources for critical minerals.”

    Click here for the full piece.

    And for more context, see Ann Bridges’s piece – co-authored with Paul Driessen – entitled “Americans Declare Freedom, Not Fights,” in which they call for a “Declaration of Mineral Independence.”

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  • 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 [...]
  • U.S. to Cooperate with Canada and Australia To Encourage Responsible Resource Development for New Energy Technology

    Amidst growing concerns over the availability of metals and minerals underpinning the EV revolution, the United States, Canada and Australia have joined forces to encourage the responsible development of said materials. As the Financial Times reported earlier last week, the US state department and its Canadian and Australian counterparts “will work to help countries discover and [...]
  • 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.”     [...]
  • Resource Alert:  North of 60 Mining News Has Launched “Critical Minerals Alaska” Magazine and Dedicated Webpage

    Over the past few weeks, China’s threat to play the “rare earths card” has generated quite a buzz and, along with growing concerns over supply chains for battery tech, has directed much-needed attention to our nation’s over-reliance on foreign mineral resources.  As followers of ARPN know, many of these issues are in fact home-grown, as the United [...]
  • Tesla May Get Into Mining Business, Says Elon Musk, A Visionary Rooted in the Reality of Resources

    If you looked up the definition of “visionary entrepreneur” in the dictionary, chances are you’d stumble over Elon Musk’s name.  Perhaps like no other CEO today, Tesla’s innovator-in-chief has had his finger on the pulse of time, and has arguably “revolutionized many industries.” And while he continues his “mission is to help save Earth for humanity through sustainable [...]

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