American Resources Policy Network
Promoting the development of American mineral resources.
  • U.S. Over-Reliance on Critical Minerals — Are the Chickens Coming Home to Roost?

    The current coronavirus pandemic has shed a light on an inconvenient truth. We have become over-reliant on foreign (and especially Chinese) raw materials. As we previously outlined, “PPE has become the poster child, but whether it’s smart phone technology, solar panels, electric vehicles, or fighter jets — critical minerals are integrated into all aspects of U.S. supply chains — and, in spite of the fact that the United States is rich in mineral resources, we have maneuvered ourselves into a situation where we often find ourselves at the mercy of China.”

    It’s no secret that China is less friend than foe, and has a history of playing politics when holding leverage over its adversaries.

    With COVID-19, the chickens are coming home to roost.

    In a new piece for Foreign Policy, Jacob Helberg, senior advisor at the Stanford University Program on Geopolitics and Technology, an adjunct fellow at the Center for Strategic and International Studies, outlines how “China’s recent weaponization of supply chains and information networks exposes the grave dangers of the American deindustrialization that Jobs accepted as inevitable.”

    He writes:

    “Since March alone, China has threatened to withhold medical equipment from the United States and Europe during the coronavirus pandemic; launched the biggest cyberattack against Australia in the country’s history; hacked U.S. firms to acquire secrets related to the coronavirus vaccine; and engaged in massive disinformation campaigns on a global scale. China even hacked the Vatican. These incidents reflect the power China wields through its control of supply chains and information hardware. They show the peril of ceding control of vast swaths of the world’s manufacturing to a regime that builds at home, and exports abroad, a model of governance that is fundamentally in conflict with American values and democracies everywhere. And they pale in comparison to what China will have the capacity to do as its confrontation with the United States sharpens.”

    Warning that “[n]eglecting to quickly safeguard the access and integrity of American supply chains and information networks in the face of successive warnings would be a costly strategic mistake and a blow to U.S. national sovereignty,” Helberg makes the case for a U.S. domestic reindustrialization.

    He argues:

    “In this new cold war, a deindustrialized United States is a disarmed United States—a country that is precariously vulnerable to coercion, espionage, and foreign interference. Preserving American preeminence will require reconstituting a national manufacturing arrangement that is both safe and reliable—particularly in critical high-tech sectors. If the United States is to secure its supply chains and information networks against Chinese attacks, it needs to reindustrialize. The question today is not whether America’s manufacturing jobs can return, but whether America can afford not to bring them back.”

    As ARPN’s Daniel McGroarty recently pointed out, the first word in “supply chain” is “supply” – and, as followers of ARPN know, the vulnerability issue on the front end of our mineral resource supply chains in particular is largely homegrown:

    U.S. reliance on foreign non-fuel minerals has significantly increased over the course of the past 65 years, both in terms of number and type, as well as as a percentage of import reliance. Along with the rise in import dependency came a drastic shift in provider countries.

    Whereas the number of non-fuel mineral commodities for which the United States was greater than 50% net import-dependent was 28 in 1954, this number increased to 47 in 2014. And while the U.S. was 100% net import reliant for 8 of the non-fuel commodities analyzed in 1954, this total import reliance increased to 11 non-fuel minerals in 1984, and currently stands at 17. In the latest USGS Mineral Commodity Summaries report, China continues to be the elephant in the data room, and is listed 25 times as one of the major import sources of metals and minerals for which our net import reliance is 50% or greater.

    As such, it has been encouraging to see that in the wake of the above-referenced developments, U.S. policymakers on Capitol Hill, in the Cabinet Departments and at the White House have begun to strategic materials and critical minerals issues with a new seriousness.

    Reform-minded lawmakers have put forth several legislative initiatives, and have even formed a bipartisan “Critical Materials Caucus.” However, while critical minerals provisions were added to the latest round of COVID relief stimulus packages, chances of their passage have been dwindling as partisan tensions continue to flare.

    Opponents of comprehensive reform and increased domestic mining tend to argue that trade with allied partners, as well as mitigation strategies like recycling and reuse obviate the need for domestic mining. However, they fail to account for new estimations that material supply pressures will increase dramatically in the coming years in the context of a low-carbon transition. Earlier this year, the World Bank released a study estimating that that production of metals and minerals like graphite, lithium and cobalt will have to increase by nearly 500 percent by 2050 to meet global demand for renewable energy technology. And just last week, Nedal Nassar, chief of the Materials Flow Analysis Section at the National Minerals Information Center, U.S. Geological Survey stressed in a Mining and Metallurgical Society of America webinar that “a combination of trends and issues raise concerns regarding the reliability of supply for certain non-fuel mineral commodities.”

    Of course, recycling and reuse, as well as increased cooperation with our close allies to secure critical materials supply are important strategies as we strive to address our supply chain vulnerabilities for a post-COVID context — and it is encouraging to see that progress is being made here. [see our blog for examples of research breakthroughs, successful public-private partnerships, and updates on partnership agreements with allied nations.]

    The scope of the mineral resource supply challenge, however, warrants an “all-of-the-above” approach we have come to know from the energy policy discourse. As ARPN’s McGroarty outlined in a panel discussion last year, in the context of working toward “resource independence” that means a focus on new mining, recycling and reclamation of new minerals from old mine tailings, as well as leveraging cooperative agreements with allied nations.

    And China’s recent actions outlined by Helberg show that the time to act is now.

  • ARPN’s McGroarty for The Economic Standard: Red Swan – a Leaked 2010 Cable on Critical Infrastructure/Key Resource Vulnerabilities Provided Warning Signs We Failed To Act On

    In a new piece for The Economic Standard, ARPN’s Daniel McGroarty argues that while the “intellectual shrug” of “who could have seen this coming” tends to be a common reaction to our new normal of sheltering in place and social distancing, there were warning signs for a coming crisis we failed to recognize for what they were, and act accordingly.

    McGroarty tells the story of what he calls a “Red Swan” based on COVID-19’s point of origin in Wuhan, China — a leaked classified cable sent by the U.S. State Department in 2010 revealing “Critical Infrastructure/Key Resources” outside of the U.S. “whose loss could critically impact the public health, economic, and/or national and homeland security of the United States.” On it, under the heading for China: “Polypropylene Filter Material for N-95 Masks” — which, as McGroarty points out, are “[p]recisely the ones the federal government and states are scrambling to source right now. […] The U.S. Government knew in 2009 that N-95 masks were critical, came from China… And did nothing about it.”

    However, and this is where followers of ARPN may perk up, this is not all.  

    As McGroarty writes, the classified list in the cable also included a series of mines in China that were deemed critical, developing critical materials ranging from fluorspar and germanium over graphite to Rare Earths, tin and tungsten — for all of which the United States is greatly import-dependent, with degrees of reliance ranging from 63% for tungsten to 100% for fluorspar, graphite and rare earths. 

    Writes McGroarty:

    “As a warning unheeded, the cable makes for interesting reading in light of today’s COVID pandemic – and as U.S. policymakers embark on a rolling series of multi-trillion dollar spending bills, the next of which will include infrastructure projects. 

    At issue is not just one but three layers of risk:  Maybe the metals and minerals produced by the Chinese mines will be withheld in time of conflict, as Beijing seeks to leverage access for American concessions. Maybe the metals and minerals will soon be prioritized for internal Chinese consumption, under its Made in China 2025 program to drive Chinese technology dominance, with little left for export to the U.S. or elsewhere. 

    Or maybe – as the leaked cable presciently notes – the Chinese mines will be disrupted by a pandemic, slamming on the supply chain brakes for a U.S. economy dependent on critical materials that go from arriving “just in time” to “not at all.”

    In any case, the warning could hardly be more clear. The U.S. has a choice:  It can take immediate steps to reduce its dangerous dependency on a Chinese supply chain for critical technology metals. Or we can hope COVID 2.0 will not disrupt supply in a second global shut-down – or that Beijing won’t one day decide to curtail access to these critical materials in time of crisis.

    But here’s one thing we can no longer do:  If an act of nature or of man cuts off U.S. access to vital technology materials, we can’t claim to be surprised by the appearance of a Red Swan. We’ve seen it coming.”

    Read the full piece here.
  • McGroarty for RealClearDefense: To Confront China, Restore Strategic Aluminum Stockpile

    In a new piece for RealClearDefense, ARPN’s Daniel McGroarty argues that as it formulates a response to the current coronavirus pandemic,  the United States has a choice to make: Whether to allow this public health crisis spiral into a strategic resource crisis as well, or to confront China’s anticipated grab for market share head on [...]
  • COVID-19 Reveals Downsides of Globalized Supply Chains and Perils of Sole-Player Domination

    It’s like a scene from the movies. COVID-19 has not only taken over the headlines all over the world, it has slowed down economic activity, drastically scaled back public life, turned parents into homeschoolers, and sent financial markets into turmoil. It has also, as Forbes contributors Nives Dolsak and Aseem Prakash point out in a [...]
  • Are we Ready for the Tech Metals Age? Thoughts on Critical Minerals, Public Policy and the Private Sector

    Earlier this week, ARPN’s Daniel McGroarty shared his views on the coming tech metal age and its policy implications at In the Zone 2019 – Critical Materials: Securing Indo-Pacific Technology Futures – a conference hosted in cooperation with the University of Western Australia to look at critical mineral resource issues through the prism of the [...]
  • Podcast: ARPN’s Dan McGroarty Discusses U.S.-Chinese Trade Tensions Over REEs

    As the world looks towards Osaka, Japan, where world leaders will gather for the 2019 G20 Summit and Ministerial meetings later this week, former Missouri Speaker of the House Tim Jones discusses the current trade conflict between the United States and China and the implications of the looming supply disruptions for U.S. domestic industries as [...]
  • McGroarty Warns of Real World Problem for 21st Century American Warrior

    In a new commentary for Investor’s Business Daily, ARPN principal Daniel McGroarty warns of “America’s unilateral disarmament in the resource wars.”  Invoking the world of Marvel comics, in which Vibranium is the imaginary metal used for Captain America’s shield, IronMan’s exoskeleton, and Black Panther’s energy-absorbing suit, McGroarty argues that the 21st Century American warrior (perhaps [...]
  • Space Force Plans Raise the Stakes to Overhaul U.S. Mineral Resource Policy

    Last week, the U.S. Government outlined plans to establish a sixth military branch – the United States Space Force.   According to Vice President Mike Pence, who announced the plans during a speech at the Pentagon, the new force would be led by a four-star commander, and funding in the federal budget would begin for [...]
  • Rare Earths Issue Back in the Mix As Trade Tensions With China Escalate

    At ARPN, we have long highlighted the inter-relationship between resource policy and trade policy. While more recently, we looked at tensions in our relationship with Canada over tariffs on aluminum and steel, other areas of concern are coming into focus. Mounting tensions over trade with China have brought the Rare Earths issue, with which ARPN [...]
  • “Critical Minerals Alaska” – Rising Demand and Supply Side Complications Combine as Catalysts to Establish Domestic Sources of Cobalt

    In his latest installment of “Critical Minerals Alaska” – a feature series for North of 60 Mining News that “investigates Alaska’s potential as a domestic source of minerals deemed critical to the United States,” Shane Lasley takes a closer look at Cobalt, one of the key metals underpinning the current EV technology revolution. Once an [...]