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  • Time to “Decouple and Control” our Critical Mineral Resource Supply Chains

    The ongoing coronavirus pandemic tearing through our communities is more than a health crisis — it has “exposed the fragility and flaws of globalized supply chains and extensive offshore production, especially drugs and medical gear,” writes Austin Bay in a new column for Townhall with a special emphasis on China.  

    Hopes that China would liberalize in the wake of economic globalization that had “entwined the U.S. and Chinese economies in the 1990s” were misplaced. Warning signs of this — and of the consequences of an over-reliance on China for critical materials (such as in the form of the 2010 rare earths embargo) — were ignored, but with COVID-19, the chickens have come home to roost. 

    To minimize the damage and better prepare for the future, it is time for the United States to “decouple and control,” says Bay, explaining “[d]ecoupling is wonkspeak for separating supply chains. (The word’s easy; the chains and decoupling process are complex horrors.) ‘Control of production’ means ‘build it yourself.’”

    Bay invokes last month’s Senate Committee on Energy and Natural Resources hearing on securing supply chains post-COVID, during which panelists briefed Senators on the urgency of the situation and drove home the point that “China and Russia have significant control over ‘upstream raw resource supplies’ and manufacturing finished products.”

    He argues that as America begins the – arguably painful — process of decoupling and controlling, it can rely on allies like Mexico, Canada, and “roughly a dozen other nations for the production of critical military and health-related goods,” and that especially the new NAFTA, United States Mexico Canada Agreement (USMCA) which has replaced the nearly 25-year-old North American Free Trade Agreement, can be a “powerful economic and diplomatic tool for decoupling from China’s pirate economy.” Other allied nations in the Indo-Pacific, Bay thinks, might be good candidates for a similar arrangements going forward, as China cannot be trusted.  

    Writes Bay:

    “Beijing’s recent decision to impose its national security law on Hong Kong renders the Sino-British Joint Declaration of 1984 null and void.(…) So another Chinese Communist Party guarantee has entered the dustbin of history. (…)

    To protect their own political, economic and military security, the U.S. and other democracies must treat Beijing’s CCP regime as the aggressive adversary it is.”

    Thankfully, the urgency of the situation is — finally — resonating with U.S. policymakers on Capitol Hill, in the Cabinet Departments and at the White House. Legislation has been drafted and introduced, and new executive orders take aim at domestic strategic materials and critical mineral development.  Cabinet departments like the Department of Energy are also broadening their focus to account for the risks associated with our over-reliance on foreign (and especially Chinese) critical metals and minerals.

    Before the coronavirus pandemic hit, the U.S. had begun to enter into cooperative agreements with allied nations to ensure future supplies of critical materials, specifically with Canada and Australia. As we emerge from the fog of COVID-19, forging ahead with these types of agreements, and fostering a policy environment conducive to harnessing the United States’ vast domestic mineral potential will become paramount for our national security and economic wellbeing.

  • State Department Hopeful More Nations Will Join Energy Resource Governance Initiative in the Wake of COVID

    ***posted by Daniel McGroarty***

    As demand for renewable energy continues to grow despite the ongoing coronavirus pandemic, the U.S. Department of State hopes to expand the Energy Resource Governance Initiative (ERGI) – an initiative launched last year by the United States and joined by ten other countries, including Canada, Australia and Brazil – aimed at improving supply chain security for the metals and minerals underpinning green energy technology. 

    Under the initiative announced in June, the U.S. ”will share mining expertise with member countries to help them discover and develop their minerals such as lithium, copper and cobalt, as well as advise on management and governance frameworks to help ensure their industries are attractive to international investors.”

    Earlier this month, Frank Fannon, a top-ranking U.S. energy diplomat, told Reuters that “[w]e are very much looking to expand ERGI to include other governments as well as governmental institutions,” stating that he has been in talks with the European Commission, and that an expansion of the initiative could “include emerging-economy countries around the world, as well as Japan and other developed countries in Asia with strong energy demand.” 

    The announcement ties into broader efforts to reduce U.S. reliance on foreign (and especially Chinese) critical raw materials in the post-COVID context now gaining momentum in Washington, D.C., several of which ARPN’s own Sandra Wirtz outlined in an op-ed for The Economic Standard last week: 

    “The new urgency is exemplified by new legislation introduced by Sen. Ted Cruz (R-Texas): The Onshoring Rare Earths Act of 2020, or ORE Act, seeks to reduce U.S. reliance on China for critical minerals. Defined as the 17 rare earths, plus four key minerals underpinning battery technology (lithium, cobalt, graphite and manganese), the ‘Cruz Criticals’ are key to establishing a domestic supply chain. The bill proposes a series of measures aimed at encouraging domestic mineral production, and strengthens existing federal statutes prohibiting rare earth magnet sourcing from China, Russia, Iran and North Korea. Recognizing that mineral production can take many forms, from traditional mining to recycling, reclamation from legacy mines, coal waste and even fracking water, it also sets up a federally-funded pilot program for traditional mining of critical minerals as well as what Cruz terms ‘secondary recovery projects.’  (…)

    Meanwhile, the Department of Energy (DOE) is broadening its target list to include the above-referenced building blocks of battery tech. In a list close in composition to the Cruz Criticals, DOE is asking for project proposals to develop, in cooperation with its technology hubs, next generation technologies to extract, separate and process ‘key critical materials’: five rare earths — neodymium, praesodymium, dysprosium, terbium, and samarium — as well as cobalt, lithium, manganese, and natural graphite.

    At the White House, two new Executive Orders take aim at strategic materials and critical mineral development.  One Order, directing an executive branch review to reduce the regulatory burdens under NEPA — the longstanding National Environmental Policy Act — in order to speed infrastructure, energy and mining projects, has triggered threats of legal action that, if successful, could stop the regulatory review even before it begins. While receiving far less media attention, the second Executive Order, delegating Defense Production Act (DPA) Title III emergency authorities to the U.S. Development Finance Corporation, including the authority to underwrite loans to support strategic material production, could prove more meaningful.  And unlike a standard-issue Executive Order, which can be undone by a successor president with the stroke of a pen, the DPA allows any president to delegate authorities by law — without requiring Congressional approval.”  

    This list of initiatives provides a snapshot, and several additional pieces of legislation aimed at reducing U.S. mineral resource dependencies have been introduced.

    As Wirtz closed last week’s op-ed: 

    “All of which is to say that, after long period of inaction, the U.S. Government seems to be viewing strategic materials and critical minerals issues with a new seriousness.  That’s a welcome development.  COVID, with its sudden disruption of supply chains, should be the last warning the U.S. needs to bolster our mineral resource security going forward.”

    Read the full op-ed here.

  • National Security Expert Calls for Securing Domestic Mineral Resource Supply Chains: “Crisis Borne from China’s Predation and Our Own Neglect No Longer Theoretical”

    After decades of watching “China become the world’s workshop as it snatches up industries, jobs and critical supply chains, [i]t’s time to restructure the global economy in our favor, and that means decisive action to shore up our most important industries,” writes Brig. Gen. John Adams (U.S. Army, retired), president of national security consulting firm Guardian Six [...]
  • As China Looks to Move Past Coronavirus Pandemic, Resource War Theaters Come into Focus

    With much of the world still in lockdown, China appears to rev up its engine to move past the coronavirus.  The City of Wuhan, the epicenter of the global coronavirus pandemic, has re-opened, factories have restarted their operations, stores are reopening and people are leaving their confined quarters to venture outside.  With coronavirus having exposed [...]
  • 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 [...]
  • 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 [...]
  • 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 [...]