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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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  • 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 national outlet has taken note – and it may be good timing, as our growing reliance on foreign mineral resources spell trouble.

    Earlier this month, John Moody, Executive Vice President, Executive Editor for Fox News, raised the specter of the President and his administration having to face the “very real possibility that China could cut off U.S. access to 17 rare materials vital to our advanced aircraft and guided missile systems,” as China has a near-total supply monopoly for Rare Earths.

    In a new piece for Fox News, Moody, citing the latest USGS Mineral Commodity Summaries report, highlights the United States’ 100 percent import dependency for at least 20 metals and minerals, and the fact that China is the most common source for many of these and other metals and minerals listed in the USGS report. According to Moody, this is a serious threat to our future military security – a threat which albeit acknowledged, has so far largely been ignored.

    Moody quotes REE expert and mining industry veteran George Byers, who confirms:

    “That 2017 USGS report is not fake news, (…). You have 29 or 30 studies on critical materials, including rare earths that go back to the early ‘90s. The outcome of each study is to declare ‘we have a crisis, let’s do something about it.’ But all they do about it, is to ask for another study.”

    Pointing to a legislative effort to be spearheaded by Rep. Duncan Hunter (R, Calif.), which seeks to mandate that the U.S. military obtain Rare Earths sourced domestically – even if this would mean subsidizing those industries – Moody explains the underlying challenge:

    “The problem, these analysts note, is that U.S. production capacity in this area has been allowed to wither to almost nothing, due to plentiful supplies from China that can be produced at a lower price than U.S. made rare earths.

    Even more perilous, China’s own rapacious demand for rare earths is outstripping its ability to supply domestic consumers as well as the U.S., meaning it may be unable to ship goods to the U.S. even if it wants to.

     In addition to rare earths, which are vital components of high-grade permanent magnets used in military aircraft and missile systems, the United States, according to the USGS report, is now 100 percent reliant on foreign countries for supplies of manganese, which is used to make impact resistant steel, among other things. Though readily available in mines in Arizona, Arkansas and Minnesota, it can be imported more cheaply. The USGS study lists American production of manganese last year as: zero.”

    Indeed, Rare Earths – though of critical importance for our domestic manufacturers and our military, are just the tip of the proverbial iceberg, and with trade issues looming and the global race for mineral resources heating up, our failure to respond to these supply challenges may soon come to haunt us.  Perhaps more national exposure for these issues will help generate some much-needed momentum for the formulation of a comprehensive mineral strategy this year.

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  • 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 [...]
  • As Japan Retreats, US Dozes Off Again On Critical Minerals

    Over the course of the last few months, slumping prices have prompted Japanese companies to reassess their rare metals strategies and cancel cooperative agreements that were once considered a high priority. As Nikkei Asian Review reports, state-owned Japan Oil, Gas and Metals National Corp. (JOGMEC) has cancelled a joint exploration contract for a tungsten mine in [...]
  • U.S. Forest Service Puts Damper On New Year For Wyoming

    What could have been a great start of the year for Wyoming’s economy and the United States’ critical resource needs had the U.S. Forest Service (USFS) done its job, feels more like a hangover thanks to the agency. As Laura Skaer, executive director of the American Exploration & Mining Association, writes for the Casper Star Tribune, the [...]
  • The “Electronification of Everything” Raises Specter of “War Over the Periodic Table”

    Via our friend and ARPN expert Simon Moores’ Twitter feed, we came across a three-part must-read series for Bloomberg View, in which author and policy expert David S. Abraham discusses the role of rare earths in today’s increasingly high-tech world.   Perhaps most interestingly, Abraham clarifies a common misconception in part two of the series: “Although [...]
  • The Geo-Politics of Rare Earths: China Reported to Add to Stockpile

    ARPN readers know that one of the core tenets of the Resource Wars thesis is that the market for strategic and critical metals is never immune to government interventions. Witness today’s Bloomberg report: “China Said to Add 10,000 Tons to Rare Earths Stockpiles.” Bloomberg reports: “China may stockpile more medium-to-heavy rare earths this year such [...]
  • Tesla Motors’ Gigafactory to Drive Critical Mineral Demand

    The graphite, lithium and cobalt industries are set for major demand surges as Tesla Motors prepares to break ground on its super-battery plant, the Gigafactory, next month. The high-end EV manufacturer is looking to double the world’s battery output as it seeks to bring the production cost of battery packs down in a bid to [...]
  • 3D Printing & the “New Rare Earths”

    “3D printing companies are the new Rare Earths.” Thus spake Twitter, a few hundred-million Tweets ago, giving birth to the new meme on what matters most in our constantly-evolving technology world. Meaning, of course, that the furor over Rare Earths sparked three years back — when China used its then-97% production monopoly as a weapon [...]

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