Real Clear World

In his latest piece for Real Clear World, American Resources principal Dan McGroarty reviews the Department of Defense’s just-released National Defense Stockpile Report to Congress against the backdrop of our mineral dependencies. According to McGroarty, the report reflects a re-thinking on the part of the Pentagon, where, less than a year ago, researchers downplayed the United States’ dependence particularly on Rare Earths – a widely-criticized assessment that was labeled “naïve” and “ill-informed” by experts at the time.

Says McGroarty:

(…) after two decades of this post-Cold War experience, a new realization is dawning: Shifts in global metal production have produced a situation in which the U.S. is extraordinarily dependent on foreign-sourced metals and minerals. For the Pentagon, increasingly dependent on the metal-intensive weapons systems of a modern military, this foreign dependence is a dangerous exposure — a weakness that can be exploited in time of conflict.

The new report finds “shortfalls – insufficient supply to meet demand – for approximately a third of these [the 72 metals and minerals studied in the report] materials,” and goes on to recommend nine metals for stockpiling in the near term.

Invoking the challenges associated with China controlling much of the global output of many critical minerals and metals, McGroarty points out that contrary to other mining nations like Australia, the United States’ rigid permitting process would prevent mining operation for any of the 23 key resources identified by the Pentagon in the new report from completing the permitting process – a scary scenario from a national defense perspective.

Concludes McGroarty:

“The question now, in a Washington where the government is funded from month-to-month, and strategic thinkers are savants who see an hour into the next news cycle, is whether the U.S. Government can muster a sustained policy to reverse our metals dependency — before the shortfalls posited in the Pentagon’s hypothetical scenarios become all too real.”

In his latest column for Real Clear World, American Resources Principal Daniel McGroarty zeros in on China’s dominance of the Rare Earths market. Invoking lopsided production numbers – in spite of international efforts to develop Rare Earths outside of China, China’s supply monopoly still hovers at 95 percent – McGroarty likens China’s REE control to the Organization of Petroleum Exporting Countries’ (OPEC) powerful position in the oil market.

As for the national security implications of the United States’ (unnecessary) reliance on foreign – and in many cases Chinese – mineral imports, McGroarty points out that according to the Congressional Research Service, REEs are “critical to five functional areas that collectively encompass every major war-fighting capability used to project power via ground, sea, air and space,” adding that they are just “one example of several dozen rare metals U.S. weapons designers use to create the “killer apps” of the modern military.”

Says McGroarty:

“In a different century and a different conflict, Lenin quipped that capitalists would sell his Bolsheviks ‘the rope to hang them with.’ Is it our strategy in the 21st Century to expect the world’s rising power to sell us the resources we may confront them with on the battlefields of tomorrow?”

In the post-fiscal cliff world, this would be a good question for U.S. policymakers to ponder.

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In his latest column for Real Clear World, American Resources principal Daniel McGroarty zeroes in on the newly-released Chinese government white paper entitled ‘Situation and Policies of China’s Rare Earths Industry’ and notes the insight it provides into China’s broader mineral strategy. McGroarty’s key points are as follows: · The white paper essentially sets the [...]

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