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American Resources Policy Network
Promoting the development of American mineral resources.
  • While Some Reforms Fizzled, Enacted NDAA Contains Potentially Precedent-Setting REE Sourcing Provision

    As we have noted, the recently-signed John S. McCain (may he rest in peace) National Defense Authorization Act for Fiscal Year 2019 (H.R. 5515), stands as a missed opportunity to enact several meaningful mineral resource policy reforms.

    Nonetheless, one provision of the signed legislation marks an important development for the realm of resource policy – so important, in fact, that Jeffery A. Green, president and founder of J. A. Green & Company and member of the ARPN panel of experts calls it “the single biggest legislative development in the rare earth sector since the 2010 Chinese embargo created an awareness of our military’s reliance on foreign rare earth materials.”

    The NDAA’s Section 873, “Prohibition on acquisition of sensitive materials from non-allied foreign nations,” amends Subchapter V of chapter 148 of title 10, U.S. Code by inserting section 2533c – which, among other things, effectively prevents the Pentagon from sourcing of Rare Earth Magnets from China.

    In response to questions from InvestorIntel, Green provides some more context:

    “The new law which sets an increased budget for defense expenditure prevents the purchase of rare earth magnets from China, which currently produces 85-90% per cent of the world’s rare earth magnets. Some 90% of rare earths consumed by the US military are produced by China.

    The new law takes effect immediately, but practically speaking, it will take the DoD some time to implement the law through regulation and to start including the prohibition in new contracts.

    To be clear, this law only applies to the use of Chinese NdFeB (Neodymium, Iron, Boron) and SmCo (Samarium, Cobalt) magnets, the latter being already subject to a previous law requiring domestic sourcing.

    The new law, 10 U.S.C. 2533c, closely mirrors an existing domestic sourcing law, ‘the specialty metals clause’, at 10 U.S.C. 2533b.  While the latter is a Buy American clause, the former states DOD will not allow rare earth magnets and tungsten in weapon systems that is produced by potential adversaries.

    The law explicitly prohibits rare earth magnets and tungsten from being ‘melted or produced’ in China, Russia, North Korea and Iran. That means the production of the magnet can’t be in those countries, so importers and distributors can’t simply bring magnet block into another country and finish into a final part – the law is designed to reinvigorate rare earth magnet manufacturing outside of China.”

    As Green had previously stated in a piece for Real Clear Defense as the bill was being considered by lawmakers:

    “While a good first step, and one long overdue, Sec. 873 addresses just a small percentage of America’s import dependence for essential military components. In next year’s NDAA, Congress should consider expanding this provision, with input from the technical experts at the Department of Defense, to include other critical minerals essential to national security.”

    With the precedent-setting passage of the amendment, the groundwork has been laid for this to actually happen. Writes Green:

    “The DOD may ask in the near future for new materials to be added to 10 U.S.C. 2533c, so there’s a good chance that this precedent continues as the Trump Administration seeks to eliminate the strategic vulnerability of foreign import reliance for critical materials – this bodes well for prospective producers outside China and Russia.”

    Read the full InvestorIntel piece here.

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  • Green: Over-reliance on Foreign Mineral Imports “Fiscally Foolish and Politically Dangerous”

    In a new piece for The Hill, member of the ARPN expert panel and president and founder of Washington, DC-based government relations firm J.A.Green & Company Jeff A. Green stresses the national security risks associated with our over-reliance on foreign sources of supply for key mineral resources.

    Citing FBI Director Christopher Wray, who recently told Congress that China is seeking to undermine the United States’ military, economic, cultural and information power across the globe, Green argues that

    “[a] major contributor to China’s rising power, and one of its primary trade weapons, is its near-monopoly over several minerals and materials that the United States military relies on to maintain its technological edge.”

    As Green points out, our mineral resource dependencies have grown significantly over the last few decades, and the risk of supply chain disruptions looms large:

    “Given the nation’s increased foreign dependence, adversarial nations that provide these minerals, such as China and Russia, have gained geopolitical leverage at exactly the wrong time. Russia now poses a national security threat across multiple domains, and China has demonstrated an “impressive military buildup…across almost every domain,” according to the head of U.S. Pacific Command, Admiral Harry Harris.

    And yet, as of 2017 China was still a major supplier of 26 commodities to the United States that are essential for aerospace and defense applications. Given that the United States possesses mineral reserves worth $6.2 trillion, according to the United States Geological Survey (USGS), continuing to rely on imports is fiscally foolish and politically dangerous.”

    Green commends the administration for taking steps that begin to address the issue, and cites various executive orders and Secretary of the Interior Ryan Zinke’s draft list of 35 minerals that are considered essential to U.S. National Security.

    Meanwhile, he argues, the U.S. Congress has so far missed opportunities to enact legislation that would address one of the key obstacles to domestic mineral resource development – an outdated and convoluted permitting structure.  Rep. Mark Amodei’s (R, Nev.) “National Strategic and Critical Minerals Production Act,” and Sen. Dean Heller’s (R, Nev.) identical Senate bill would “remove a significant barrier to entry, and expedite the mining permit process to no more than 30 months,” but so far, Congress has failed to take steps to pass these bills.  Writes Green:

    “The White House, through its executive orders, has shown that it understands the risks of the current, laborious mine permitting system in the United States, and recognizes the potential rewards for encouraging new sources of critical materials. Whether through Amodei’s bill or another mechanism, Congress should also act to mitigate these risks and encourage new efforts.” 

    To read the full piece, click here.

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  • The Arctic – A Looming Battlefield for Resource Supremacy?

    While relations between Russia and the United States continue to make headlines on a daily basis, one particular aspect of this relationship – in spite of the fact that it may be one of the most contentious ones – has been largely flying under the radar. As Fox News national security correspondent Jennifer Griffin recently wrote: [...]
  • Through the Gateway: The Geopolitics of Co-Product Supply – a Look at Scandium

    Throughout ARPN’s work, we have consistently highlighted the geopolitical dimension of mineral resource policy.  Where we source (or fail to source) our metals and minerals is an often forgotten – or ignored – factor, with implications for our domestic manufacturers, and, at times, even for our national security. Case in point – and in keeping [...]
  • Ukraine, Food Security, and Russia’s Imperial Reset

    American Resources readers will want to see what ARPN expert Chris Berry has to say about the potash sector in light of recent events in Ukraine. Now that Ukraine, formerly known as the “breadbasket of the Soviet Union,” has lost Crimea to the Russian Federation as Russian forces mass along its border, it’s time to [...]
  • Resource Wars: EU zeros in on Arctic mineral riches

    While many of us in the continental U.S. are enjoying record-breaking temperatures this March, EU foreign policy chief Catherine Ashton probably needed her down coat as she embarked on her new mission: laying the groundwork for a common EU policy on the Arctic. Traveling near the North Pole earlier this month, Ashton made a case [...]
  • Critical metals take center stage in border dispute: The Kuril Islands and Rhenium

    According to a recent article in the Russian daily Pravda, Russia finds itself locked in a territorial dispute that is becoming increasingly acute. The conflict over the group of four islands, which Russia calls the “Southern Kurils” and Japan calls the “Northern Territories, is the reason why Japan and Russia never signed a peace treaty [...]
  • A new dimension of Resource Wars – China throws hat into Arctic ring

    Having intensified over the past few months with Russia reportedly willing to risk a new “Cold War” over the area’s vast resources, the geopolitics of the Arctic’s race for mineral riches has just been elevated to a whole new level with China having thrown its hat into the ring. According to the Wall Street Journal’s [...]
  • Supply, Demand, and the March of Science

    Just when American Resources has read its thousandth story on companies substituting around scare metals like the Rare Earths to reduce usage, along comes this Platts report on a new discovery in Russia’s RUSAL research labs, working in conjunction with a team from the Siberian Federal University.  Scientists there have fabricated a new aluminum alloy [...]
  • Strategic Metals Flashback – or Flash Forward?

    Our Director of Research, Sandra Wirtz, unearthed this piece from the Time Magazine online archives  – “Strategic Metal: #1,” dateline October 13, 1941 – just weeks before Pearl Harbor.  It inspired me to do a little research on my own, with an eye toward our present-day approach to strategic metals. With war raging in Europe, [...]

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