We’ve named it the year of the Supply Chain, noting that others said “2021 is the year ‘supply chain’ went from jargon to meme.”
While an increased focus on the supply chain was undoubtedly a critical development in the mineral resource realm, and several steps to increase supply chain security for critical minerals were taken in 2021, overall mineral resource dependency trend lines remained largely unchanged.
On the day urban legend identifies as the point in the new year’s calendar where we are most likely to abandon our New Year’s Resolutions, we take our first look at the latest hot-0ff-the-press USGS Mineral Commodity Summaries report released this Monday, shows that we are still 100% import dependent for 17 of the metals and minerals included in the USGS report — a number that remains unchanged from the previous year and the year before that. If we left 2021 resolved to make supply chains a priority in 2022, the new USGS report shows this is a resolution we’ve made before.
And looking ahead to February 2, it’s a little like Bill Murray’s classic “Ground Hog Day” in the Critical Minerals world, where the clock clicks to the same day all over again – in the Critical Minerals movie, to a situation of deep dependency on foreign sourced metals and minerals.
Once more, we can’t help but observe that this represents a stark contrast to our import reliance for metals and minerals in 1984, when we were 100% import reliant for just 11 mineral commodities.
A deeper look at the chart depicting U.S. Net Import Reliance — or the “Blue Wall of Dependency,” as we have dubbed it based on the many overly blue bars showing our significant degree of import dependence, reveals that the number of metals and minerals for which we are 50% or more import dependent is also once again unchanged over last year — with the report pegging it at 47.
A few changes, however, are notable and significant, particularly in the context of the accelerating global green energy transition:
For the Rare Earths, a key group of tech metals underpinning 21st Century technology and the accelerating green energy transition, our import reliance dropped from 100% in the 2021 report to currently “greater than 90%.” That said, the rare earth concentrate being extracted in the U.S. are currently sent to China for separation. Once again, a single link lacking in a supply chain continues U.S. dependency.
And for Lithium, perhaps the most frequently cited battery tech mineral (aside from Cobalt, Nickel, Graphite, and Manganese) U.S. import reliance has dropped significantly from “greater than 50%” to “greater than 25%.”
On the other hand, import dependence for Copper, another (and often overlooked) key component of green energy technology, has increased from 37% to 45%.
As in previous iterations of the report, China continues to be the elephant in the data room. And against all pledges in recent years for the United States to reduce import reliance on supplies from China, the 2022 Mineral Commodity Summaries lists China 25 times as one of the major import sources of metals and minerals for which our net import reliance is 50% or greater, which is up by one.
Of course, the sourcing of critical minerals is only one segment of the supply chain, and, as a recent look at the complete clean energy supply chain by Visual Capitalist has revealed, China has not only established itself as a global lead supplier of critical minerals. The country has also established dominance in the processing segment. (Take a look at our latest post on the issue here.)
While the urgency of the need to secure critical mineral supply chains has registered with stakeholders over the past two years, USGS’s findings underscore once more that supply chains in the 21st Century are extremely complex and meaningful change takes time.
However, as ARPN’s Dan McGroarty phrased it during a congressional hearing in 2019 – “we can’t admire the problem anymore. We don’t have the luxury of time.”
Securing our supply chains is a behemoth task – and it is too complex to address piecemeal, but it is not impossible. To successfully address the issue, our focus must be across the entire value chain from mine to manufacturing and must encompass an “all of the above” approach we have come to know from the energy realm.
If we are able to do that in the coming months, maybe 2022 can be the year that strengthening tech metal supply chains can move from resolution to reality.
