Over the past few weeks, the spread of the coronavirus has begun to expose the supply chain challenges associated with an over-reliance on foreign raw materials, the effects of which will be felt across broad segments of manufacturing.
In a new piece for PennLive Patriot-News, Michael Stumo, CEO of the Coalition for a Prosperous America (CPA), takes a look at the United States’ Rare Earths supply chain — for which followers of ARPN will know that China is the elephant in the room — and calls for the United States to “start matching China’s industrial strategy” which means “tapping our domestic mineral resources.”
Zeroing in on the issue from the renewable energy angle, Stumo points out that the coming surge in demand for the metals and minerals underpinning green energy technology — electric cars, wind turbines, solar panels etc. — will be staggering, citing one estimate suggesting “that the stock of available minerals required for electric vehicles will need to increase by 87,000 percent [and t]he resources for solar panels will need to rise 1,000 percent; wind turbines, 3,000 percent.”
Stumo argues that with China’s dominance in the mineral resource sector being strategic and allowing the regime in Beijing to levy power over global industries “Washington must stop turning a blind eye to such mercenary behavior, particularly when it includes forced labor camps, a disregard for environmental standards, and efforts to degrade U.S. industry.”
Fortunately, even before the outbreak and ongoing spread of Covid-19 placing a magnifying glass over our resource dependencies, and against the backdrop of the nascent tech war between China and the United States U.S. stakeholders were beginning to take steps to reduce supply chain vulnerabilities, particularly for Rare Earths.
In July of last year, the Trump Administration invoked Title III of the 69-year old Defense Production Act to spur domestic REE development. The President issued five Presidential Determinations (PDs) permitting the use of Defense Production Act (DPA) Title III authorities to strengthen the domestic industrial base and supply chain for light and heavy REEs, rare earth metals and alloys, neodymium iron boron (NdFeB) rare earth permanent magnets, and samarium cobalt (SmCo) rare earth permanent magnets.
Other initiatives have made it into Title II of the American Energy Innovation Act (AEIA) (S. 2657) a package consisting of several pieces of legislation currently pending in the U.S. Senate.
With regards to Rare Earths specifically, Title II calls for the enactment of a program to “develop advanced separation technologies for the extraction and recovery of rare earth elements (REEs) and minerals from coal and coal byproducts,” and respective reporting to Congress.
Unlike some of our trading partners, we are in the fortunate position to be home to “vast, untapped geologic deposits worth an estimated $6.2 trillion.” While we will not be able to meet all our mineral resource needs by solely relying on domestic resource development and processing, and will have to rely on trading with allies. However, we can significantly reduce our vulnerabilities by maximizing our domestic resource potential and choosing allies over adversaries when it comes to sourcing from other nations.
As Stumo concludes:
“Mining will remain essential for producing the next generation of advanced industries. Doing it here at home will protect the global environment while supporting good jobs in many domestic industries.”