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  • Coronavirus Underscores Perils of Resource Dependence – A Look at Rare Earths

    While many first think of the human dimension and health implications of the recent outbreak and ongoing spread of the coronavirus — and quite rightly, given the potentially  fatal consequences — the crisis with pandemic potential has ramifications that reach far beyond the health sector. In a new piece for Tech Metal News, Shane Lasley takes a closer look. He writes:

    “Instead of export restrictions resulting from politics or trade disputes, it now seems that the novel coronavirus pneumonia (NCP) outbreak could leave the U.S. and the rest of the world with an REE shortage.”

    The spread of the virus, which originated in Wuhan, capital of the Chinese province of Hubei, earlier this year, has indeed had – in the words of analyst Jack Lifton, a “foreseeable but unintended consequence.” 

    As Lasley outlines, an increasingly limited workforce and slowed transportation as truck drivers refuse to enter areas of concern and travel is restricted have prompted reports that China’s rare earth sector has slowed “to a crawl” and is currently “running at about 20 percent capacity.” This has prompted industry experts to warn that “dwindling REE stockpiles could result in supply chain disruptions both within the country and globally,” if the“sector does not get back up and running soon.”

    To ARPN Principal Daniel McGroarty, whom Lasley quotes throughout his piece, this prospect is hardly surprising.  He says:

    “It’s not necessary to predict how severe the coronavirus will be or how long it will last, to see even at this early point that, in our interconnected global economy, near single-source reliance for a critical material is a vulnerability.”

    …All of which underscores the need for the United States to diversify its sources of mineral resource supplies — for rare earths and beyond. 

    Concludes McGroarty:

    “Saying an event is a ‘black swan,’ beyond anyone’s power to predict, is no excuse for failing to develop more diverse supply. (…) Just as world health organizations are laser-focused on developing an anti-virus vaccine, we’ve got to take steps to ensure the U.S. economy builds up its immunity to global shocks that can destroy growth and GDP – and a key part of that is avoiding extreme dependencies on any one country for critical minerals.”

    Steps taken over the past few months point in the right direction, and have resulted in U.S. domestic production of“critical rare-earth mineral concentrates [having] increased by 8,000 metric tons (over 44%) in 2019 to 26,000 metric tons, making the U.S. the largest producer of rare-earth mineral concentrates outside of China,”according to USGS.

    However, it is important to note that all of the U.S.-produced rare earths concentrate was exported to China for separation into individual rare earth elements, since that portion of the supply chain doesn’t exist in the United States.

    Here’s hoping that policy makers well beyond the public health sector see the coronavirus as a the wake-up call that it is.

  • 2020 Mineral Commodity Summaries:  Domestic Mineral Resource Production Increases While Foreign Dependencies Continue

    Last week, USGS released its 43rd Mineral Commodity Summaries – a comprehensive snapshot of global mineral production which gives us a window into where we stand as a nation in terms of mineral resource security.  

    Perhaps most instructive from an ARPN perspective is the chart depicting U.S. Net Import Reliance — previously casually referred to as “Page 6,” on our blog, but now moved to “Page 7.”  Maybe we’ll just call it the Blue Wall of Dependency, based on the many blue bars showing 100% import-dependence — which is down one from 2019 (a quick look into the footnotes of our favorite chart reveals that this is owed to Thorium being added to the category of metals and minerals for which “not enough information is available to calculate the exact percentage of import reliance”), but still totals 17.

    As followers of ARPN know, we have seen some incremental progress towards reducing our mineral resource dependencies, and particularly our over-reliance on metals and minerals from China, over the past two years. However, meaningful changes will take time. 

    There is a slight overall decrease in the number of metals and minerals for which we are 50% or more than 50% import-dependent — an area where we are down from 49 to 47. However, this drop, too, must be taken with a grain of NaCl.  For example, whereas in previous reports, iron oxide pigments were separated into two separate categories (natural and synthetic), these were combined into one category for the 2020 report.  Arguably significant drops can be noted for our dependencies for foreign supplies of Lithium and Aluminum (to >25% for Lithium and 22% for Aluminum).  And while our import reliance for Nickel has dropped to 47%, we are now dependent at a rate greater than 50% for Magnesium compounds.   Also notable, our reliance for Cobalt — a critical component of Electric Vehicle battery technology — has gone up from 61% to 78%.

    Once more, our favorite chart underscores that much remains to be done to reduce our mineral resource dependencies.  China continues to be the elephant in the data room, and is listed 25 times as one of the major import sources of metals and minerals for which our net import reliance is 50% or greater.

    On a positive note, the 2020 Mineral Commodity Summaries notes that domestic metal mine production has increased to $28.1 billion, which is almost $500 million higher than in 2018.  Perhaps most encouraging, a significant increase in domestic production has occurred in the Rare Earth mineral concentrates segment, where USGS notes that “the domestic production of critical rare-earth mineral concentrates increased by 8,000 metric tons (over 44%) in 2019 to 26,000 metric tons, making the U.S. the largest producer of rare-earth mineral concentrates outside of China.”  Yet all of the U.S.-produced rare earths concentrate was exported to China for separation into individual rare earth elements, since that portion of the supply chain doesn’t exist in the U.S.

    Hopefully, these findings provide fresh impetus for mineral resource policy reform, for which we have seen incremental progress since 2018. 

    To read the full USGS report, click here.

    For previous iterations, click here.

  • Addressing a Piece of the Mineral Resource Puzzle – Federal Land Withdrawals

    As followers of ARPN know, the United States has finally embarked on a quest to look for ways to reduce its over-reliance on foreign mineral resources, and in doing so, reduce the leverage it has yielded to nations like China over our national security. In a new series for the Capital Research Center, geologist and [...]
  • 2020 – A Twofold Watershed Year for Rare Earths?

    Against the backdrop of the recently-signed memorandum of understanding (MOU) for critical materials between the U.S. and Canada to reduce U.S. reliance on Chinese Rare Earths supplies, and the FY 2020 National Defense Authorization Act (NDAA) which  “has expanded its recognition of the critical importance of the rare earths” … “2020 looks to be a [...]
  • Trade Publication Zeroes in on Over-Reliance on Critical Minerals, Cites ARPN’s McGroarty

    Against the backdrop of the upcoming two-year anniversary of the Presidential Executive Order on Critical Minerals, trade publication Industry Week discusses the issue of U.S. over-reliance on foreign mineral resources in its latest issue. Recounting some of the key steps taken by the federal government in recent months – i.e. last year’s  Department of the Interior [...]
  • Tomorrow, Tuesday, Dec. 10 – U.S. House Committee to Hold Hearing on “Research and Innovation to Address the Critical Materials Challenge”

    On Tuesday, December 10 — close to the two-year anniversary of the White House’s executive order “to develop a federal strategy to ensure secure and reliable supplies of critical minerals” the House Science, Space and Technology Committee will hold a hearing on “Research and Innovation to Address the Critical Materials Challenge.” The hearing comes against the backdrop of increased [...]
  • Time to Reduce Our Reliance on “Untrustworthy Countries for Strategically Important Minerals”

    As we recover from collective food coma and return to our desks after a tumultuous Thanksgiving travel week, J. Winston Porter, a former EPA assistant administrator in Washington, reminds us of the importance of keeping the focus on the issues associated with our over-reliance on foreign mineral resources.    In a new piece for InsideSources, Porter [...]
  • Sen. Murkowski, Panelists, Underscore Urgency of Securing Critical Mineral Supply Chains

    “With our eyes wide open, we are putting ourselves in the same vulnerable position [as we did with oil and gas decades ago] when it comes to these [critical] minerals,” Sen. Lisa Murkowski (R-Alaska) told the audience at “Minerals: The Overlooked Foundation of Our Future,” an event organized by RealClearPolitics in partnership with our friends [...]
  • India and the Tech Wars: Ripple Effects of the Confrontation over Who Will Dominate the 21st Century Tech Age

    While most of the headlines regarding the trade war between the United States and China — and, for ARPN followers, the underlying tech war over who which country will dominate the 21st Century Technology Age — focus on the main players in Washington, DC and Beijing, the ripple effects of this confrontation can be felt [...]
  • ARPN Expert Panel Member: Any Real Solution to REE Dependence Must Include Investing in Our Domestic Production Capabilities

    “There is more to President Trump’s engagement with Greenland than meets the eye, (…)[h]owever, if policymakers want to get serious about securing U.S. access to rare earths, any real solution must include investing in our domestic production capabilities,” writes Jeff Green, ARPN expert panel member and president and founder of public relations firm J.A. Green & [...]