Indeed, there are a number of similarities between both metal markets, which Reisman lists as follows:
· Both share significant supply constraints, forcing sourcing managers to devise supply- and commodity risk management strategies.
· Both come primarily from China.
· Both have seen price drops as a result of restrictive public policies.
CEO of junior miner American Manganese Larry Reaugh’s conclusion (based on a study conducted by the CPM Group) that China may well become a net importer of Manganese by 2018 as shutdowns for smaller plants along with other factors will drive cost up, also sounds familiar to those keeping a close eye on the Rare Earths.
American Manganese will likely begin operations at its project site in Arizona, for which it has filed a preliminary feasibility report, by 2015, thus helping to reduce the United States’ near-total reliance for Manganese from China. However, whether twin brother or ugly stepchild – the U.S. should take steps to this end on the policy level, as well. Reisman lists several elements that would go far in meeting this challenge for all critical metals and minerals:
“Enactment of US legislation and coordination among government agencies elevating the status of the 43 minerals listed in a recent ARPN report, requiring the development of complete supply chain risk management strategies for each and every mineral;
- Streamlining the US mining permitting process, currently the longest in the world;
- The establishment of public-private partnerships in which industry works with the DOD and other national security agencies to devise strategies and tactics to secure supply of key materials, and
- Strict enforcement of rules-based trade, among several others.”
Some in Congress have received the message – but whether this will result in actual policy changes remains to be seen.