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100-Day Supply Chain Report — Striking a Balance Between Strengthening Domestic Resource Development and Cooperation With Allies

In its just-released 100-Day Supply Chain Report, the Biden Administration has committed to an “all of the above” approach to critical minerals — a “wrap-around strategy” that includes recycling, substitution, as well as new mining, as Secretary of Energy Jennifer Granholm told U.S. Senators earlier this month.

While investing in “sustainable production, refining, and recycling capacity domestically,” the Administration will also seek to “diversify supply chains away from adversarial nations and sources with unacceptable environmental and labor standards” by working closely with allies and partners.

With recent studies having made clear that the global shift towards a green energy future will require massive material inputs, it makes sense to see the goal of decoupling from “adversarial nations” like China in a North American context. U.S. domestic production and processing can and should be strengthened, but we are in the fortunate position to also leverage close relations with allied nations.

Enter Canada — a resource-rich nation that is not only on our doorstep, but the linkage with which legally codified, at least in terms of national defense.

As ARPN’s Daniel McGroarty outlined in a piece for Investors’ Business Daily:

“The linkage [between the U.S. and our neighbors to the North] is enshrined in U.S. and Canadian law. Unlike any of America’s other allies, Canada has long been part of a special relationship, linking the two country’s defense industrial bases as one.

The defense union dates back to the months preceding America’s entry into World War II: In 1941, FDR and Canadian Prime Minister Mackenzie King agreed to allow American-made war materiel produced in Canada to flow to embattled Britain under Lend-Lease. As the war wore on, Canadian aluminum production ramped up at the massive Saguenay, Quebec, complex, eventually accounting for 40% of all allied aluminum production.

U.S.-Canada industrial collaboration continued through the Cold War and beyond. Twenty-five years ago, the U.S. federal code formally recognized Canada as a part of the U.S. National Technology and Industrial Base (NTIB) for national security and defense planning purposes.

As a result, our two countries share the world’s most integrated defense industrial base. And in a nod to our long alliance, the Canadian air base at Bagotville, Quebec — built in 1942 to protect the aluminum production facilities during World War II — is today part of the joint U.S.-Canadian North-American Air Defense network, better known as NORAD.”

While as such, our relations with Canada will be the most natural fit for critical mineral resource cooperation, the U.S. also has a strong ally in Australia, with whom the U.S. has also entered into cooperative agreements, and will able to leverage another framework for allied cooperation — the National Technology Industrial Base (NTIB), which originally established to strengthen technology links between the U.S. and Canada in 1993, which was expanded in 2016 to include the United Kingdom and Australia.

As ARPN’s McGroarty noted in an opinion piece for The Hill in 2018, when discussing the findings of the DoD’s then-released Defense Industrial Base report:

“This four-country economic colossus — with a combined GDP of more than $25 trillion — constitutes a vast reservoir of economic might to draw on for collective national security. With defense technology driven by the rapid development of materials science, the four NTIB nations also host production or known resources of all 35 of the minerals and metals on the U.S. Government’s newly-established Critical Minerals List. As the DIB report notes, Congress has ordered ‘DoD to [develop] a plan to reduce the barriers to the seamless integration across the National Technology and Industrial Base.’ Given the dangers of what the Pentagon Report calls China’s ‘economic aggression,’ it’s time to put this integration into overdrive.”

Strengthening domestic resource production as well as processing and closer cooperation with our friends and allies should not be considered mutually exclusive strategies. Striking the right balance will be key as the Administration moves forward to implement the recommendations from its 100 Day Supply Chain Report.

What ARPN’s McGroarty told members of Congress about a decade ago still rings true today:

“We cannot maintain our modern economy without a steady supply of metals and minerals. Those we do not possess here at home, we must source from other countries. But those we possess but choose not to produce perpetuate a needless foreign dependence – leverage that other [adversarial] nations may well use to America’s disadvantage.”