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It’s that time of the year again.   We’re gearing up to celebrate the men and women who have fought for, and continue to safeguard our freedoms.  It may not feel like it when the cost for the average July 4^th cookout has drastically increased, but we have much to be thankful for, particularly at a time when geopolitical tensions are mounting and the impact of Russia’s war on Ukraine is being felt around the globe.

From a critical mineral resource perspective, we at ARPN have always used the occasion of Independence Day to remind ourselves that “while we cherish the freedom we are blessed with in so many ways, we must not become complacent, as there are areas where we’re increasingly becoming less independent” — with our reliance on foreign mineral resources being a case in point.

The good news is that on the back of the coronavirus pandemic, Russia’s war on Ukraine and growing resource nationalism in the Southern hemisphere, stakeholders have begun to realize the extent of our mineral resource supply chain vulnerabilities, which significantly increased over the course of the past 65 years.

A case in point:  the U.S. Congress is taking aim strengthening critical mineral supply chains via the National Defense Authorization Act (NDAA).

A provision in the Senate’s annual defense authorization bill, advanced by the Armed Services Committee earlier this month, contains a provision which would authorize $1 billion in funding for the National Defense Stockpile Transaction Fund for “the acquisition of materials determined to be strategic and critical materials required to meet the defense, industrial, and essential civilian needs of the United States.”

The fund includes many of the metals and minerals considered essential to national defense supply chains, including rare earth elements, titanium, tungsten, cobalt and antimony, a metal we recently discussed as it has its own provisions incorporated in this year’s senate and house bills, which will need to be reconciled and voted on later this year.

According to Defense News, the S1 billion senate-sought allocation would cover not only the $253.5 million requested by the Department of Defense (DoD)for FY 2023, but would also allow for the backfilling of multiple funding requests by the Defense Logistics Agency (DLA), a combat-support agency of the DoD, which manages the fund.

At its peak in 1952, the fund was valued at $42 billion in today’s dollars, but has subsequently been depleted to dip to its current level of $888 million, with lawmakers fearing the National Defense Stockpile becoming insolvent by FY2025 absent congressional action.

With the end of the Cold War in 1989, Congress authorized the sale of excess stockpile materials with proceeds transferred to DoD or other federal programs.  However, as Maya Clark points out in a Heritage Foundation report from earlier this year, “the threat environment today is more similar to the Cold War than to the 1990s.”

Clark cites the National Defense Strategy Commission which stated in a 2018 report that “[t]he United States confronts more numerous – and more severe – threats than at any time in decades.”  Fast-forward to Russia’s invasion of Ukraine in 2022 and other geopolitical challenges we’ve discussed over the past few months, and the threat environment is even more severe than it was a mere four years ago.

The push to boost the United States’ National Defense Stockpile Transaction Fund ties into the overall realization that our nation’s critical mineral woes can no longer be ignored. Additional promising initiatives tying into an overall comprehensive “all-of-the-above” approach are currently being pursued by members of Congress as well as the Administration, and range from increasing cooperation with allies to secure critical mineral resources over leveraging “closed-loop” solutions to boosting domestic production and processing.

However, as we have previously argued:

“Those familiar with the inner-workings of Washington, D.C. know all too well that particularly in an election year policy efforts can quickly lose steam or fizzle over attempts to placate certain constituencies. Against all affirmations to strengthen domestic supply chains, the not-in-my-backyard (NIMBY) sentiment is still strong.”

As followers of ARPN well know, the stakes are too high to let the momentum for comprehensive reform fizzle.

At the beginning of this year, we posited the question of whether 2022 could be the year that strengthening tech metal supply chains can move from rhetoric to reality.  As we mark Independence Day 2022, with efforts galvanized by heightened national and economic security concerns, it certainly appears that we are getting closer to that goal.

On the heels of the coronavirus pandemic having exposed the West’s overreliance on Chinese supplies of mineral resource supplies, Russia’s war on Ukraine has set off a potential realignment of critical mineral resource supply chains that warrants attention.

Moscow’s invasion of Ukraine has largely isolated it on the global front both diplomatically and economically, and, with sweeping sanctions taking hold, the Western world has turned elsewhere to meet certain critical mineral needs previously supplied by Russian companies and halted shipments of materials to the Russian Federation.

Unsurprisingly for followers of ARPN, Russian buyers have begun turning to China to plug shortfalls.

A case in point:

With Ukraine and Australia, two of Russia’s key suppliers of alumina before the war, halting shipments to Russia, China’s alumina exports to Moscow have skyrocketed in recent months. In March, Russia had bought 9,950 metric tons of alumina from China, amounting to almost 10 times more than purchases for the same period in 2021. In May, according to Bloomberg News, Russia received a whopping 190,000 metric tons from China, bringing the year-to-date figure to 380,000 – almost 1,000% higher than the numbers for the same period in 2021.

While to date, Beijing has walked a carefully calculated line on Russia’s war on Ukraine emphasizing its concern with violence while maintaining the need to respect territorial integrity and security interests of all parties, China stands to gain major strategic opportunities from filling the void left by a Western business pullout from the Russian market, both in terms of imports and exports. China will also be able to further its grip on global critical minerals via access to Russia’s vast mineral riches.

In a telephone conversation earlier this month, according to a Chinese Foreign Ministry readout cited by Newsweek, Chinese President Xi Jinping and Russian President Vladimir Putin stressed support for “each other’s core interests,” with Xi telling Putin that “China stands ready to promote the stable and long-term development of pragmatic bilateral cooperation with Russia,” and is “ready to continue mutual support with Russia on issues concerning core interests and major concerns, such as sovereignty and security, and to deepen strategic coordination between the two countries.”

With China and Russia the number one and number two global producers and processors for many of the metals and minerals underpinning 21st Century technologies, the stakes cannot be underestimated. For years, ARPN sounded the alarm with regards to the lack of awareness of the geopolitics of mineral resource security, but it took the confluence of a global pandemic, subsequent supply chain challenges amidst growing demand, rising resource nationalism in the Southern hemisphere and Russia’s war on Ukraine to get stakeholders’ full attention to the issue. Promising efforts to reduce our nation’s overreliance on metals and minerals from our adversaries are currently underway.

However, as we have previously pointed out:

“Those familiar with the inner-workings of Washington, D.C. know all too well that particularly in an election year policy efforts can quickly lose steam or fizzle over attempts to placate certain constituencies. Against all affirmations to strengthen domestic supply chains, the not-in-my-backyard (NIMBY) sentiment is still strong.”

Ultimately though, with the stakes as high as they are today, a comprehensive “all-of-the-above” approach to mineral resource security, from mine to manufacturing and across all segments of the value chain, is the only way to, in U.S. Secretary of State Anthony Blinken’s recent words, “bet on ourselves and win the competition for the future.”

In yet another indication that increasing demand and supply chain challenges in the wake of the coronavirus pandemic and war in Ukraine have raised the geopolitical stakes, U.S. Secretary of State Anthony Blinken explicitly referenced critical minerals and the United over-reliance on China both in terms of mining and processing in a speech outlining U.S. policy [...]

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 [...]

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, [...]

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 [...]

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 [...]

Every December, editors of the English-speaking world’s dictionaries release their choices for Word of the Year, a “word or expression that has attracted a great deal of interest over the last 12 months.” Unsurprisingly, for 2020, the honorees were coronavirus-related terms, with Merriam-Webster and Dictionary.com bestowing the honor on the word “Pandemic,” whereas the Collins Dictionary Word of the [...]

Over the past few weeks, we dove into the materials challenges associated with the accelerating EV revolution, outlining that while general awareness of immense mineral intensity of the green energy transition is growing, misconceptions in terms of how to address the challenge persist, with too many still subscribing to the notion that we can recycle, [...]

In a recent op-ed, National Mining Association president and CEO Rich Nolan argues that while the United States still has a shot at winning the EV revolution, it is currently not only not in the lead, but is rather “being lapped.” In the lead – not surprisingly to any of ARPN’s followers — is China, which [...]