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  • Resource Policy’s Butterfly Effect – South Africa’s Landownership Issues to Cripple U.S. Defense Arsenal?

    Can the taking of a farm in South Africa cripple the American defense arsenal?  We’re about to find out – says ARPN’s principal Daniel McGroarty in a new piece for Investor’s Business Daily.

    Invoking the so-called “Butterfly Effect” – an expression used to describe the phenomenon whereby a minute localized change in a complex system can have large effects elsewhere -, McGroarty argues that

    “[e]xpropriation of a white-owned farm in South Africa can lead to civil strife that could disrupt mining in that resource-rich country, depriving the U.S. and its allies of metals and minerals supply, crippling defense preparedness by sidelining advanced weapons platforms – while strengthening adversaries like China and Russia, which happen to possess the very metals and minerals South Africa mines and America needs.

    So like the butterfly wings that trigger a tsunami, South Africa’s expropriation crisis could disrupt U.S. defense readiness, and hand our global adversaries dangerous new leverage.”

    The 2014 labor unrest that disrupted Platinum Group Metal (PGM) production for a certain period served as a recent warning – which, among other issues led the U.S. Geological Survey to use South Africa as a case in point to underscore the “risk associated with high production concentration in a single country” in its “Summary of Methodology and Background Information” for DOI’s 2018 Critical Minerals List.

    The recent racial tensions only exacerbate said risk.  McGroarty explains how a potential faltering of South African supply would affect U.S. defense contractors and ultimately U.S. national security:

    “What metals and minerals do U.S. defense contractors source from South Africa?  The PGMs, used in jet turbine blades and high-performance circuit boards.  Chromium, used as a superalloy in jet fighters and tanks.  Manganese, required for National Defense Stockpile material electrolytic manganese metal, for which the U.S. is 100% foreign import-dependent.  Titanium used in jet fighter air frames, and vanadium, used in super-conductor electromagnets like the ones needed for the U.S. Navy’s new railgun.

    You can find all of these metals and minerals on the recently published U.S. Government Critical Minerals List, deemed essential “to our national economy and national security.”  And the U.S. is import dependent — in some instances 100% dependent — for all of them.

    Here’s where the impact intensifies. If South African supply falters, what are the alternatives for the U.S. defense complex?  For chromium, we can turn to Russia. For PGMs, Russia again. For manganese, China is the global leader. For titanium and vanadium, it’s China or Russia.

    In other words, civil unrest, with the potential for civil war, in South Africa may well increase U.S. critical mineral dependence on China and Russia — nations recognized as U.S. adversaries in defense doctrine, and presently subject to sanctions and trade tariffs.”

    As followers of ARPN well know, many of our mineral resource dependencies are largely home-grown, as the U.S. is home to known resources of all of the metals and minerals referenced as “at risk” above and many more.

    Laments McGroarty:

    “As a nation, we’ve simply slipped into a post-industrial mindset that we don’t need to be a primary producer, exacerbated by a mine permitting process that is among the lengthiest in the world. Our manufacturers — including our defense industrial base weapons builders — simply buy what we need when we need it, from wherever it’s mined. And it’s worked.

    Until now that is, as the butterfly’s wings are flapping in South Africa.”

    The choice is ours – are we going to sit idly by and hope that China and Russia won’t “exploit any metals vulnerabilities that emerge” from South Africa’s land ownership issues, or are we going to enact the reforms necessary to “encourage domestic production of the metals and minerals we need to support our 21st Century lifestyles, and the advanced weapons platforms that keep us secure.”

    Click here to read the full piece.

  • A “Dangerous Dependence:”  Mineral Resource Security Goes Mainstream

    In recent weeks, we have seen a flurry of articles and commentaries in national publications discussing reforms to address our ever-growing reliance on foreign mineral resources.  The two most recent examples are member of the ARPN expert panel Jeffery A. Green’s piece in Real Clear Defense entitled “Dangerous Dependence on China for Critical Minerals Runs Deep,” and a piece in The Hill by American Enterprise Institute scholar Mark J. Perry scholar entitled “To reduce China’s leverage, rebuild America’s minerals supply chain.”

    Both pieces draw attention to China’s mineral resource dominance and point to current efforts to curb China’s leverage.

    Writes Perry:

    “Imagine a scenario where the U.S. is entirely dependent on a single nation for oil. You can’t. It’s inconceivable. We would never let one nation — much less a sometimes adversarial rival — dominate our supply of a critical resource. Or would we?

    Astoundingly, we have. We are completely import-dependent for 21 mineral commodities, and imports account for more than half of our consumption for 50 critical minerals. Who’s our largest supplier? China.”

    Citing USGS numbers highlighting our dependence on materials sourced from China, Green agrees:

    “We have gifted China robust trade leverage should they chose to use it. In 2010, during a geopolitical spat over disputed waters, China cut its exports of rare earth elements to Japan. China could easily cripple American supply chains and significantly limit our ability to produce advanced radar and weapon systems by limiting or disrupting the supply of any one of these minerals. Allowing a non-allied foreign nation to control such a broad swathe of critical minerals is a significant security threat to the U.S. and its warfighters.”

    The growing awareness of these issues in the mainstream media thanks to experts like Green and others spreading the word is a welcome development. However, whether we succeed in reducing Chinese leverage over our domestic industrial production and national security will depend in large part on how policy makers respond.

    Both authors cite recent legislative language pending in Congress that would go far in streamlining our outdated and duplicative permitting framework for mining projects that has so far hampered responsible domestic resource development.

    But while the U.S. House of Representatives has passed said provisions, the U.S. Senate has already failed to include them in its version of the National Defense Authorization Act (NDAA), once more underscoring that while awareness is growing, meaningful change will still face an uphill battle.

    In Perry’s words:

    “The opportunity to put a halt to our deepening reliance on imports for dozens of critically important minerals is within reach. Let’s ensure we have the robust domestic supply chain to guarantee our military has the supply of materials it needs when it needs them.”

  • Happy Birthday, America – Onward to Resource Independence Day?

    It’s that time of the year again – we load up our shopping carts with fireworks and burger buns, and gear up for parades to honor of the men and women who have fought, and continue our safeguard our freedom today. Many of us will have already traveled this week – and according to AAA, [...]
  • Critical Mineral List Finalized – Now Comes the Hard Part

    “Identifying which minerals are ‘critical’ is the easy part. Working out what to do about them is going to be much harder.”  – That’s the conclusion Reuters columnist Andy Home draws in his recent piece on the current Administration’s efforts to develop a strategy to reduce import reliance for metals considered “critical to the economic and [...]
  • The Daily Caller: DOI Critical Minerals List Highlights United States’ Over-Reliance on Foreign Mineral Resources

    Heavily quoting from ARPN’s statement on the issue, The Daily Caller’s Michael Bastasch earlier this month reported on the Department of the Interior’s finalized list of minerals deemed critical for U.S. national security. Writes Bastasch: “President Donald Trump’s administration’s release of a list of 35 critical minerals highlights just how reliant the U.S. is on [...]
  • ARPN’s Daniel McGroarty Comments on DOI’s Release of Final Critical Minerals List

    The Department of the Interior released its final list of Critical Minerals today. The following is ARPN principal Daniel McGroarty’s statement on the list: “DOI issued its final list of Critical Minerals, unchanged at 35.  What we see is the degree of US dependency – the US is 100% import-dependent for 14 of the 35 [...]
  • Congressional Western Caucus Members Call for Expansion of Critical Minerals List

    Earlier this month, members of the Congressional Western Caucus sent a letter to Secretary of the Interior Ryan Zinke, Secretary of Commerce Wilbur Ross, and Acting Chair of the Council on Environmental Quality (CEQ) Mary Neumayr calling for the inclusion of additional metals and minerals into the draft critical minerals list released by Secretary Zinke [...]
  • Mamula & Moore on Mineral Resource Policy: Time for a Change in Strategy and Philosophy

    “Why is the United States reliant on China and Russia for strategic minerals when we have more of these valuable resources than both these nations combined?” Stephen Moore, senior fellow at the Heritage Foundation and an economic consultant with Freedom Works, and ARPN expert panel member Ned Mamula, a geoscientist and adjunct scholar at the [...]
  • An Early Christmas Present? New Executive Order Calls for National Strategy to Increase Domestic Resource Development

    Only one day after USGS released its new report “Critical Minerals of the United States” – a study which underscores the United States’ over-reliance on foreign minerals – a new executive order directs Interior Secretary Ryan Zinke to publish within 60 days a list of critical minerals to be followed by a report (after another [...]
  • Panelists at U.S. House Hearing Stress Dangers of America’s Growing Resource Dependence

    During yesterday’s oversight hearing on the subject of “Examining Consequences of America’s Growing Dependence on Foreign Minerals,” before the House Natural Resources Committee, panelists raised some of the key issues we have consistently highlighted on our blog. Panelists included: Mr. Ronnie Favors, Administrator, U.S. Defense Logistics Agency, Strategic Materials, U.S. Department of Defense Dr. Murray [...]