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Earlier this month, during a meeting in Beijing hours before the kickoff of the Winter Olympics and against the backdrop of Russia amassing troops at its border with Ukraine, Russian President Vladimir Putin and China’s Xi Jinping issued a joint statement calling out what they see as “interference in the internal affairs” of other states by “some forces representing a minority on the world stage” which “continue to advocate unilateral approaches to resolving international problems and resort to military policy.”

Using this what Ken Moritsugu writing for Military.com called “thinly veiled reference to the U.S. and its allies,” both leaders declared that relations between China and Russia “are developing in a progressive way with a spirit of friendship and strategic partnership,”  and “have indeed become unprecedented,” setting “an example of dignified relations that support mutual development,” as Mr. Putin phrased it.

According to the official Chinese Xinhua News Agency, Mr. Xi was quoted as saying that China and Russia are committed to “deepening back-to-back strategic cooperation,” representing a “strategic decision that has far reaching influence on China, Russia and the world” as the two nations confronted what Mr. Xi called “regional security threats” and “international strategic stability.”

While ties between the two countries are not new and Russia has long been a key supplier of oil, gas and coal for China, this very public declaration of a strategic deepening of relations between Moscow and Beijing should give pause to U.S. stakeholders, particularly from a critical minerals perspective.

Only a few days ago, the USGS released its latest Mineral Commodity Summaries report, once more underscoring U.S. overreliance on foreign, and especially Chinese critical minerals.   As we pointed out,

“ (…) 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 Russia may not appear quite as often on USGS’s chart depicting U.S. net import reliance, it is an import source for some key materials underpinning 21^st century technology, including Scandium, for which the U.S. is 100% import dependent.

The declaration of the “no limits” partnership between China and Russia comes at a time when geopolitical pressures on mineral resource policy, are on the rise.

[See our latest on the rise of resource nationalism in Central and South America here.]

Against the backdrop of the accelerating global green energy transition, the urgency of securing critical mineral resource supply chains should take center stage for U.S. policy makers, and for some time it seemed like it would.

This summer’s 100 Day Supply Chain report and subsequent policy statements pointed towards the adoption of an “all of the above” approach to mineral resource policy on the part of the Biden Administration.   However, as we previously pointed out,

“since then, the overall approach to date has appeared more geared towards “rely[ing] on ally countries to supply the bulk of the metals needed to build electric vehicles and focus[ing] on processing them domestically into battery parts, [as] part of a strategy designed to placate environmentalists.”

The Administration’s recent cancellation of a promising mining project in Minnesota, seems to all but confirm fears by observers that the Biden-Harris White House would turn to embrace an “activist-driven U.S. anti-mining policy,” as Duggan Flanakin, director of policy research at the Committee for a Constructive Tomorrow, phrased it in a recent piece that does not mince words for RealClearEnergy.

Efforts to “friend-shore” and deepen critical minerals cooperation with allies like Canada and Australia are welcome, but they are not sufficient to meet our massively increased (and ever-growing critical mineral needs).

The challenge only gets more pressing, as we previously outlined, “when we realize that “NIMBYism Is Global” – as was the headline for a recent piece by Forbes senior contributor David Blackmon zeroing in on what he called the ‘grand ironies in the whole energy transition narrative: The same class of left-leaning activists who promote wind and solar and electric vehicles (EVs) as the solution also oppose the mining of the lithium and other critical minerals necessary to make them work.’”

A look to our friends in Europe, where the Serbian government canceled Rio Tinto’s $2.4 billion lithium mining project in January over sustained NIMBY protests, suffices to confirm this.

The stakes are too high, and with geopolitical tensions rising, the time to embrace a comprehensive “all of the above” here in the U.S. – from “soup to nuts” or from mine to manufacturing is now.

Against the backdrop of the global push to net carbon zero, supply chains for the critical metals and minerals underpinning this shift are facing immense pressures. As followers of ARPN well know, China, which not only holds the pole position when it comes to sourcing critical minerals, but has also cornered the downstream supply chain, is the elephant in the room here – but there are other significant geopolitical challenges stakeholders have to reckon with.

Often overlooked in the policy discourse, yet no-less crucial in the global race for critical mineral resources, is the Southern Hemisphere. Resource-rich Latin and South America have long been key players in this sector, but, with Latin America emerging as a major source of renewable energy metals and minerals, the region’s importance is growing in the context of the green energy transition.

Renowned author and energy expert Daniel Yergin agrees, stating that Latin America is “a major, major source of lithium, a major source of copper. Those are two of the critical elements in the energy transition.”

Yergin points to a rising challenge that is set to have major geopolitical implications that should get U.S. policy stakeholders thinking, and ultimately acting:

“But you also have across Latin America a wave of populism… Resource nationalism is not just about oil and gas, it’s also about minerals, definitely, with the batteries and everything else.”

Indeed, as Peter Schechter and Juan Cortiñas outline in a recent piece for Marsh McLennan’s Brink News,

“[t] he political tide in Latin America has turned decisively toward leaders who openly shun laissez-faire economics. A new generation of presidents and legislative leaders is advocating for greater government control of national economies, and with this trend, the specter of resource nationalism has once again gained a foothold in the region.” 

Argentina, Bolivia, and Chile, which form the so-called Lithium Triangle — home to more than half of the world’s known lithium reserves according to experts — are central in this new development, but other countries in the region, like Mexico, are also in the critical minerals business.  In each case, the trend toward resource nationalism is unmistakable.

President Andrés Manuel López Obrador has called for reserving future lithium extraction for the state, stating that the Mexican government “will deny any request for a concession to exploit lithium, and we have the power to do that.” 

In Chile, home to the world’s largest reserves of lithium and copper, recently elected center-left president Gabriel Boric has also proposed to nationalize mineral operations and end private concessions, with government documents arguing that “the strategic resources such as copper and lithium should serve the interest of all Chileans and therefore be incorporated into the ‘full and exclusive domain of the state.’”  

Argentina’s government is developing a new strategic roadmap for mining. With lithium mining at its heart, policy changes could include “analyzing investment incentives for lithium mining, including a possible exemption for profit repatriation … and a system of ‘progressive’ export taxes to charge lower rates at the start of a new project.” 

In Peru, another key traditional mining jurisdiction, President Pedro Castillo ran on a platform calling for increased mining royalties during his 2021 campaign, and has taken “a hands-off approach to the increasing social conflicts in the country’s mining regions” since assuming office.

According to media reports, against the backdrop of a global lithium market expected to grow by 500% in the next 35 years, developers in Argentina, Bolivia, Chile and possibly Peru are even evaluating the possibility of creating an OPEC-like cartel.

And while Schechter and Juan Cortiñas contend that it is “important not to confuse this resource nationalism with predictions of a highly ideological leftward turn,” this does not change the underlying implications for U.S. critical mineral resource supply chains as U.S. demand for lithium and other green energy critical materials continues to grow.

With its 100 Day Supply Chain Report and subsequent policy statements, the Biden Administration committed to an “all-of-the-above” approach to mineral resource policy.  However, since then, the overall approach to date has appeared more geared towards “rely[ing] on ally countries to supply the bulk of the metals needed to build electric vehicles and focus[ing] on processing them domestically into battery parts, [as] part of a strategy designed to placate environmentalists.”

As we previously pointed out, the “friend-shoring” concept may be an important pillar of the “all-of-the-above” approach, and highly appealing especially to those policy makers with “not in my backyard (NIMBY)” constituencies.

However, it will not be sufficient to meet our vast material needs, particularly as NIMBY-ism is going global.

It’s time we come to terms with the fact that as much as we want to rely on our friends and allies, this can only be part of our critical mineral resource strategy.  To succeed and remain competitive in the 21^st Century, we will also have to harness our arguably vast domestic resource potential across the entire value chain — from mine to manufacturing.

As the global push for net carbon zero accelerates in the wake of last year’s UN Global Climate Summit in Glasgow, another leading automaker draws attention to the critical raw materials challenge: In a recent interview with German paper Die Zeit, Mercedes-Benz Group (previously Daimler AG) Chief Executive Ola Kaellenius warned that EV battery raw material scarcity (…) more

In recent months, industry news has been dominated by headlines like “carmakers face raw material bottleneck.” And while, rightfully, against the backdrop of the accelerating green energy transition and EV revolution, much of the coverage focuses primarily on supply chain challenges arising for the battery criticals Lithium, Cobalt, Nickel, Graphite and Manganese, it’s not just the (…) more

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 (…) more

They say a picture is worth a thousand words. This Visual Capitalist graphic may not exactly qualify as a picture – but is certainly reveals a lot about the complexity and urgency of the West’s critical mineral woes, and underscores how China has managed to corner the strategic and clean energy materials supply chain especially when (…) more

As the United States continues to look for ways to shore up and secure its critical mineral supply chains, a business deal involving China is raising eyebrows for some of our neighbors to the North. An October 2021 announcement by Chinese state-owned enterprise Zijin Mining Group Co. Ltd that it would purchase Canadian lithium miner (…) more

 Happy New Year — and “shoutout to everyone who said they would start eating healthy in the new year and already decided to wait until Monday,” (i.e. today) as one Instagram influencer put it this weekend. Here’s the thing with New Year’s resolutions – while the new year seems like the perfect time to proclaim ambitious intentions (…) more

ARPN’s Year in Review —   a Last Look Back at the United States’ Critical Mineral Resource Challenge in 2021 Well, two words, for the sticklers.  Merriam Webster may have gone with “vaccine,” but for ARPN, there was really no doubt. As one article put it, “2021 is the year ‘supply chain’ went from jargon to (…) more

On November 9, 2021, the U.S. Geological Survey announced it is seeking public comment on a draft revised List of Critical Minerals. The revised  list is an update to the United States’ first whole-of-government Critical Minerals List released in 2018 and developed in consultation with other cabinet agencies pursuant to Executive Order 13817. Later codified into law, the (…) more