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American Resources Policy Network
Promoting the development of American mineral resources.
  • McGroarty: Tech Wars Heat Up – Administration Invokes Defense Production Act to Spur Domestic REE Development

    ARPN’s Dan McGroarty discusses President Trump’s decision to invoke the Defense Production Act to spur domestic REE development for The Economic Standard:

    The Tech Wars Heat Up: U.S. Makes National Security Declarations to Spur Rare Earths Development

    Forget the trade war – the tech war is heating up.  After weeks of Chinese threats that it could cut off U.S. access to the essential technology materials known as rare earths, the Trump Administration today took a counter-action of its own.

    Jennifer Dlouhy has the story at Bloomberg News:  “Trump invoked the 69-year-old Defense Production Act — once used to preserve American steelmaking capacity — to remedy what he called ‘a shortfall’ in production of the super-strong magnets made with rare-earth minerals neodymium and samarium.”  In fact, the White House published five separate Title III declarations, carefully identifying each category of rare earths plus the powerful permanent magnets — and the smart bombs and precision-guided munitions — they make possible.

    The Defense Production Act dates to the early months after North Korea’s invasion of South Korea in 1950.  Title III of the act requires the specific finding made today by the president:

    “domestic production capability for separation and processing of Heavy Rare Earth Elements is essential to the national defense.

    Without Presidential action…, United States industry cannot reasonably be expected to provide the production capability for separation and processing of Heavy Rare Earth Elements adequately and in a timely manner.”

    How will China respond to the new U.S. action?  And how quickly can the U.S. close the rare earths gap — with production today at zero, even as known U.S. rare earth resources exist — before China loses its leverage over materials the U.S. Government has deemed critical to “the national economy and national security?”

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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 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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  • Section 232 Tariffs on Aluminum and Steel on the Way Out?

    News headlines these days are full of doom and gloom. As the Guardian writes, “whether or not the world really is getting worse, the nature of news will interact with the nature of cognition to make us think that it is.” Against this backdrop, it’s nice to see a little – albeit cautious – optimism [...]
  • Metals in the Spotlight – Aluminum and the Intersection between Resource Policy and Trade

    While specialty and tech metals like the Rare Earths and Lithium continue to dominate the news cycles, there is a mainstay metal that has – for good reason – been making headlines as well: Aluminum.  Bloomberg recently even argued that “Aluminum Is the Market to Watch Closely in 2019.”  Included in the 2018 list of 35 [...]
  • ARPN Expert Zeroes in on Issues Surrounding Uranium – an “Underappreciated Energy Source”

    In a new series for Capital Research Center, Ned Mamula, member of the ARPN expert panel, adjunct scholar in geosciences at the Center for the Study of Science, Cato Institute, and co-author of “Groundbreaking! America’s New Quest for Mineral Independence,” takes a closer look at Uranium – an “underappreciated energy source.”  In the four-part-part series, Mamula [...]
  • 2019 New Year’s Resolutions for Mineral Resource Policy Reform

    Out with the old, in with the new, they say. It‘s new year‘s resolutions time.  With the end of 2017 having set the stage for potentially meaningful reform in mineral resource policy, we outlined a set of suggested resolutions for stakeholders for 2018 in January of last year.  And while several important steps  were taken [...]
  • “Action Can’t Come Soon Enough” –  A Call for Comprehensive Resource Policy From a National Security Perspective

    As America gets back into the swing of things after suffering from a collective “post-Thanksgiving rut,” James Clad, former deputy assistant Secretary of Defense and current Senior Fellow at the American Foreign Policy Council in Washington, DC, provides a good  recap of why we need to get our resource policy house in order from a national security [...]
  • ARPN’s McGroarty for The Hill: With USMCA, Time to Take Strategic North American Alliance to the Next Level Has Arrived

    “Now that President Trump has won agreement to replace NAFTA with the USMCA — the new U.S.-Mexico-Canada trade agreement — he has an opportunity to build on that accomplishment, and broaden the benefits of trade to strengthen national security,” writes ARPN Principal Daniel McGroarty in a new op-ed for The Hill. The next step, says McGroarty, [...]
  • Lithium – Challenges and Opportunities Underscore Need for Domestic Resource Policy Overhaul

    In an interview with InvestingNews.com, Simon Moores, Benchmark Mineral Intelligence’s managing director and a member of the ARPN panel of experts, discusses challenges relating to Lithium – one of the key materials underpinning EV battery technology. Moores says that big challenges still lie in bringing new supply to the market, but the situation is not [...]
  • McGroarty in The Hill: Copper Should Be Factored Into NAFTA “Auto Rules of Origin” Negotiations

    In a new piece for The Hill, American Resources Policy Network principal Daniel McGroarty zeroes in on the intersection between trade and resource policy. Against the backdrop of the current negotiations to update the North American Free Trade Agreement (NAFTA), McGroarty argues that one of the metals ARPN followers have come to know as a [...]

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