mineral resource policy

At ARPN, we have long highlighted the important but oft-overlooked nexus between resource policy and geopolitics.   The latest case in point is South Korea, which, as ARPN President Daniel McGroarty points out in his latest opinion piece for Fox News, is navigating murky waters “talking sunshine and Rare Earths as North Korean war clouds gather.”

For decades, South Korea has acquired strategic mineral resources it requires for its domestic high-tech industries from its sworn enemy North Korea via the South Korean state owned resource corporation KORES, which also happens to be 50% owner of North Korea’s largest graphite mine.

Rumored nuclear warhead testing on behalf of the Pyongyang regime has triggered an “unusual degree of collaboration” between U.S. and Chinese leaders to discuss Kim Jong Un’s brinkmanship.  And while South Korea did shut down the Kaesong Industrial Complex in the wake of its Northern neighbors’ 2016 nuclear tests, now, with South Korea’s presidential election to be held on May 9, leaders are not only mulling the prospect of re-opening said complex, but to even expand it.

The question is “why South Korea sees North Korea – its sworn enemy – as a source for those materials, in the face of strong evidence that the revenue generated from those purchases is funneled into financing North Korea’s nuclear weapons program.” 

Says McGroarty:

“South Korea can’t have it both ways. It can’t claim be under an existential threat from Kim Jong Un, only to reopen a hard currency spigot that will keep Kim and his cronies in power, and fund a nuclear weapons capability that will – by 2020, some national security experts say —  threaten the continental United States itself.”  

McGroarty argues that South Korea would be well-advised to begin working with American suppliers to develop new non-North Korean sources of critical metals and minerals. After all, he says:

“With U.S. naval strike groups sent North Korea’s way and calls for the expedited deployment of THAAD missile defense systems ringing out, one thing is certain:  It’s going to be very hard to convince the American people to go to the brink with a nuclear-armed madman on behalf of an ally who has helped bankroll the nuclear weapons arrayed against it.”     

Resource policy does not occur in a vacuum — and that’s a message that should not just resonate with South Korea’s political leaders, but U.S. policy makers as well.

Read the full opinion piece on Fox News here.

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 in Congress during the first half of the year, culminating in the inclusion of critical mineral legislation in the House and Senate energy bills, respectively.

While Sen. Lisa Murkowski’s American Mineral Security Act of 2015 (S. 883) was passed as part of the Senate’s Energy Modernization Policy Act of 2016 (S. 2012), observers were hopeful that the mineral sections of the package would be conferenced with H.R. 1937, the National Strategic and Critical Minerals Production Act of 2015 - a bill similar to Murkowski’s introduced by Rep. Mark Amodei, R- Nevada, and passed as part of the House of Representatives’ energy package.  Both bills aimed at facilitating domestic resource development by calling for an assessment of critical mineral resource needs and tackling permitting delays, and would have constituted a big step towards reducing our dependence on foreign mineral resources.

However, as the summer drew on, a successful conference between both chambers’ versions became more and more doubtful, and in spite of all efforts, in December, the push to enact comprehensive energy legislation with strong critical mineral provisions was declared dead by chamber leaders.

Meanwhile, earlier this year, the Environmental Protection Agency (EPA) dropped a proposed set of new financial assurance requirements for owners and operators of certain hard rock mining operations. The proposed rule, which ARPN Principal Dan McGroarty discussed in a widely publicized op-ed over in the Summer, would de facto duplicate the responsibilities of other federal agencies, preempt state authority, and in doing so place an undue burden and a potentially devastating blow to the mining industry.  While the EPA published the proposed rule in December, there is a good chance the agency will take a fresh look at the issue with the change of Administrations in January, which is expected to bring a significant shift in policy priorities.

In 2016, a trend we had previously noted continued – the increasing importance of metals and minerals previously often dubbed “minor metals.”  The growth of the battery technology sector, which ARPN expert Simon Moores’ recent event in Washington, D.C. discussed, represents only one facet of this development.

Many of these high tech metals and minerals have become indispensible building block of 21^st Century tech, and are derived mainly by way of “Co-Product”-development – i.e. as part of the development of more common “Gateway Metals” like Copper, Aluminum, Zinc, Nickel and Tin, for example.   Acknowledging the disparity between the growing importance of these materials and the lack of public discourse on the subject, we embarked on an online informational campaign aimed at shedding light on the relevance and correlation between Gateway and Co-Product Metals.  In case you missed the series or parts thereof, here’s a handy summary post with links to everything we’ve published on the subject.

As we’ve pointed out as part of our campaign, much remains to be done, as our foreign mineral resource dependencies – particularly for many of the Co-Products we featured, but also for some of the Gateway Metals – are significant, and, in some instances deepening.

We would be remiss, however, if we didn’t point out a positive development here:

In October, The Department of Energy’s Critical Materials Institute (CMI) announced it will join with global mining and minerals company Rio Tinto to study new ways to capture Gateway Metals needed in clean power manufacturing.

As we’ve previously pointed out:

“[M]any challenges remain and we are a far cry from the comprehensive critical minerals strategy our nation would need. However, efforts like the latest CMI-Rio Tinto public private partnership represent a promising step towards reducing our foreign dependencies for many of the mineral resources that are necessary for our society’s shift towards a clean energy future, and for our domestic manufacturers to thrive and be competitive.”

On the whole, 2016 represents another mixed bag for mineral resource policy, however, there are indications that with the new Administration taking over in Washington, D.C., we may see a shift towards a more comprehensive and strategic look at our nation’s critical mineral needs.

If you are based out of Washington, DC or happen to be in town on October 21, here’s an event you should not miss: Our friends at Benchmark Minerals, a U.K.-based price data collection and assessment company specializing in the lithium ion battery supply chain, are taking their Benchmark World Tour to Washington, DC.   ARPN expert and Benchmark [...]

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