We realize that New Year’s resolutions are somewhat controversial.  Some say, they‘re not worth the paper they’re written on – but we feel that whether or not we implement all of them, they offer a good opportunity to both step back to reflect and set goals as we look at the big picture ahead. And that certainly can’t hurt. 

With several positive stage-setting steps taken in 2018, 2019 continued to bring a number of positive developments in the realm of mineral resource policy.  

However, while we appear to be headed in the right direction — towards an all-of-the-above approach in mineral resource policy as outlined in our 2019 recap — most of the resolutions we spelled out last January remain stubbornly valid 365 days later (though not without some tweaks or additions). 

Without further ado, here’s our updated list of suggested new year’s resolutions for resource policy stakeholders:

Continue the National Policy Conversation 

Against the backdrop of the specter of China playing the “rare earths card” setting off alarm bells and the intensifying the battery arms race, the Commerce Department released the long-awaited interagency Commerce Department report pursuant to Executive Order 13817, A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals released in June 2019 at a critical juncture.

There are indications that it may have served as a catalyst for policy makers across the political aisle to understand the urgency of securing mineral resource supply chains, and the need at long last for a more comprehensive approach to mineral resource policy. In an increasingly toxic political climate in Washington, D.C., it is important that policy makers work to ensure that partisanship does not impede the advancement of policy solutions because, as ARPN‘s Dan McGroarty noted during a recent panel discussion:

“We can’t admire the problem anymore. We don’t have the luxury of time.“

This past summer, just as it did in 2010, the Rare Earths issue has once again re-introduced non-fuel mineral resource issues into the mainstream political discourse.  This growing awareness of our nation‘s mineral resource woes should be harnessed — and stakeholders should work to change the sentiment that “neither [political] parties’ base sees critical minerals as such a dire threat.”

Read!

The above referenced Commerce report – coupled with studies released in 2018 (DoI‘s Critical Minerals List and DoD‘s Defense Industrial Base Review) – represents must-read material for all stakeholders involved to develop an understanding of U.S. mineral resource needs and associated supply challenges and should form the basis for any meaningful policy discussions in 2020.   USGS‘s 2017 “Critical Minerals of the United States” should also be required reading.  

We’ve said it before, but we’ll say it again: “ARPN knows how the Congress works; let’s hope Members delegate a key staffer or several to divvy up the USGS tome and really get familiar with it.”

Don‘t Forget the Gateway/Co-Product Interrelationship

2019 was a fast-paced year on the mineral resource front.   And with China‘s Rare Earths saber-rattling and the intensifying battery arms race revolving primarily around cobalt, lithium, graphite and nickel, it might be easier to focus attention on just a handful metals and minerals.   

However, we must continue to look at the bigger picture. Courtesy of the materials science revolution, Gateway metals – which include mainstay metals like Copper, Aluminum, Nickel, Tin and Zinc  – and their Co-Products are increasingly becoming the building blocks of 21st Century technology. Their interrelationship should be factored into any mineral resource policy discussion.

(Read our 2018 “Through the Gateway” report here.)

Enact Legislation

Some legislative progress was made in 2019 (see our recap), however Congress failed once more to pass key critical minerals provisions.  Congress should make an effort to finally pass these common sense provisions in 2020.

As we previously noted, “as important as Executive Orders are, they are not legislation, and history has shown that policy that is set and enacted by the stroke of the Presidential pen can just as easily be undone. Ultimately, for any real progress to grab hold and develop staying power, codification of any reforms yielded by these orders through Congressional action is highly desirable.” 

Again, it’s all about harnessing momentum.  As E&E’s Dylan Brown wrote discussing a recent U.S. House hearing on critical mineral issues: “They are split on solutions, but many Republicans and Democrats share national security concerns about growing reliance on foreign countries, in particular China, for a slew of minerals used in military and renewable energy technology.”

Factor Resource Policy Into Trade Policy – and Vice Versa

2018 brought the inter-relationship between trade and resource policy to the forefront with  U.S.-imposed tariffs on steel and aluminum imports from Canada and Mexico weighing on the negotiations surrounding the USMCA trade agreement between the United States, Canada and Mexico.  The tariffs were ultimately removed in 2019, but the agreement signed in December between Canada, Mexico and the United States may open the door to increased metal imports from China via Mexico as its amended rules of origin for automobiles include tighter definitions of what constitutes North American steel — but not of what constitutes North American aluminum.

In 2019, the inter-relationship between trade and resource policy became even clearer in the context of the U.S.-Chinese trade war.  The specter of China rare earths as an economic weapon has revealed that the current trade war between the U.S. and China is in fact one front in a larger tech war – a competition to see which country will dominate the 21st Century Technology Age, in which our “Achilles’ heel” is our over-reliance on foreign metals and minerals underpinning 21st Century technology and China’s dominance across the supply chains for many of them.

Against this backdrop, the U.S. has stepped up its cooperative efforts with close allies and reliable trading partners — a trend stakeholders should build on in the coming months.  The bottom line is that policy-making cannot occur in a vacuum.  Trade issues should inform mineral resource policy and vice versa. 

Once more, our 2020 resolutions come down to:  

Discuss, Read – and Act.  

And while there is some debate on whether 2020 represents the beginning of the new decade or not we have every hope that we‘ll continue on the positive trajectory towards a comprehensive mineral resource policy — one that, when we look back on 2020, will mark this year as beginning of our journey to American resource independence. 

We blinked, and 2020 is knocking on our doors. It’s been a busy year on many levels, and mineral resource policy is no exception. So without further ado, here’s our ARPN Year in Review.

Where we began:

In last year’s annual recap, we had labeled 2018 as a year of incremental progress, which had set the stage for meaningful resource policy reform. The Department of Interior (DOI) list of 35 metals and minerals deemed critical from an economic and national security perspective, released in May of 2018, marked a first tangible step towards addressing the question of “how the U.S. Government can match policy to the priority of overcoming our Critical Minerals deficit.” Additional progress was made on several other fronts (see our 2018 recap). However, most legislative efforts to reduce our mineral resource dependencies – save for a “potentially precedent-setting” provision in the 2019 National Defense Authorization Act (NDAA) prohibiting the acquisition of sensitive materials from non-allied foreign nations – faltered in 2018; and it took another full year since the Critical List release —until June of 2019 — for the U.S. Department of Commerce to release the interagency report pursuant to Executive Order 13817, A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals.

At last, a strategy? But in the Trade War – or Tech War?

The Commerce report, which, according to the agency’s official announcement, “contains a government-wide action plan, including recommendations to advance research and development efforts, increase domestic activity across the supply chain, streamline permitting, and grow the American critical minerals workforce,” came at a critical juncture.

Only hours before the Commerce Department report release and against the backdrop of an escalation of U.S.-Chinese trade tension, China’s National Development and Reform Commission (NDRC) had announced it is studying proposals to impose export controls on rare earth elements to “protect and better use such a ‘strategic resource.’”

As ARPN’s Dan McGroarty pointed out, the specter of using rare earths as an economic weapon has revealed that the current trade war between the U.S. and China is in fact one front in a larger tech war – a competition to see which country will dominate the 21st Century Technology Age, in which our “Achilles’ heel” is our over-reliance on foreign metals and minerals underpinning 21st Century technology and China’s dominance across the supply chains for many of them.

Leave it to the Rare Earths

China’s decision to cut off Rare Earths exports to Japan in the fall of 2010 helped bring the mineral resource supply challenge into focus. For the first time in a long time, non-fuel mineral resource issues entered the mainstream political discourse. However, as we noted at the time, there was no comprehensive approach to these issues, and though some progress was made over the years — such as the creation of the Critical Materials Institute (CMI) under the auspices of the U.S. Department of Energy — a more holistic approach was not yet in sight. Particularly on the legislative front, partisan differences hindered passage of comprehensive reform bills.

With the tech wars heating up and the battery arms race kicking into high gear, 2017/2018 set the stage for reform. This summer’s specter of China playing the “rare earths card” yet again set off alarm bells — and may have served as a catalyst for policy makers across the political aisle to understand the urgency of securing mineral resource supply chains, and the need at long last for a more comprehensive approach to mineral resource policy.

Since then, progress has been made on several fronts:

International Cooperation to Counter Chinese Dominance

In an effort to stave counter China’s dominance in the critical minerals segment on the whole, and REEs in particular, the US State Department and its Canadian and Australian counterparts in June of 2019 announced that to ensure future supplies of materials needed for new energy technologies, including lithium, copper and cobalt, they will cooperate and “work to help countries discover and understand their mineral resources.”

Since then, we have seen the following examples of increased mineral resource cooperation between the United States and its allies:

- The signing of a Memorandum of Understanding (MoU) between Australia and the United States on energy mineral resources in the context of the Energy Resources Governance Initiative (ERGI) launched by the U.S. Department of State on June 11 and convened with partners at the United Nations General Assembly on September 26.

- The signing of an agreement on developing U.S. and Australian critical mineral assets between Geoscience Australia and the U.S. Geological Survey (USGS), in which both partners outlined “specific steps to strengthen an existing Memorandum of Understanding (MoU)” with an emphasis on collaboration on “joint critical mineral potential mapping and quantitative mineral assessments; determining geological controls on critical mineral distribution; and developing data analytics capability to understand supply and demand scenarios for developing critical minerals trade between the two countries.

- The creation of a U.S.-Canada Critical Minerals Working Group tasked with developing an action plan for U.S-Canadian collaboration on “critical minerals” subsequent to a June meeting between U.S. President Donald Trump and Canadian Prime Minister Justin Trudeau.

Domestic Developments and Policy Initiatives

• After weeks of Chinese threats that it could cut off U.S. access to REEs, the Trump Administration in July invoked Title III of the 69-year old Defense Production Act to spur domestic REE development. The President issued five Presidential Determinations (PDs) permitting the use of Defense Production Act (DPA) Title III authorities to strengthen the domestic industrial base and supply chain for light and heavy REEs, rare earth metals and alloys, neodymium iron boron (NdFeB) rare earth permanent magnets, and samarium cobalt (SmCo) rare earth permanent magnets.
• In a move that would represent the “first financial investment by the U.S. military into commercial-scale rare earths production since World War Two,” the U.S. Army has plans to fund construction of rare earths processing facilities. As part of this push, an Army division in November solicited proposals on the cost of a pilot plant to produce so-called heavy rare earths, indicating it would “fund up to two-thirds of a refiner’s cost and that it would fund at least one project and potentially more.”
• While long-standing and often-introduced legislation to reform our outdated and cumbersome permitting process for mining projects — as put forth by Sen. Lisa Murkowski (R-Alaska) and Rep. Mark Amodei (R-Nev.) — still faces uphill battles, there is growing awareness across party lines that a “more holistic” approach to mineral resource policy is warranted. Case in point: a recent hearing in the U.S. Senate and a recent hearing on the issue in the U.S. House. As E&E’s Dylan Brown wrote: “They are split on solutions, but many Republicans and Democrats share national security concerns about growing reliance on foreign countries, in particular China, for a slew of minerals used in military and renewable energy technology.”
• Meanwhile, the Administration has set out to modernize National Environmental Policy Act (NEPA) regulations. On June 13, the US Forest Service announced a proposal to streamline environmental review of proposed projects on National Forest System land. The White House Council on Environmental Quality is expected to soon issue a draft of its revamped National Environmental Policy Act regulations, while the Bureau of Land Management has already implemented several changes resulting in shorter wait times for Environmental Impact Statements (EIS) for infrastructure and mining projects.
• U.S. imposed tariffs on steel and aluminum coming from Canada and Mexico were weighing heavily on the negotiations surrounding the USMCA (U.S.-Mexico-Canada) trade agreement earlier this year. In May, the tariffs, which particularly in the case of Canada ignored nearly 80 years of deep defense cooperation with our northern neighbor, were lifted. However, the agreement signed earlier this month between Canada, Mexico and the United States may open the door to increased metal imports from China via Mexico as its amended rules of origin for automobiles exclude definition for aluminum.

Profiles of Progress – Public-Private Partnerships to Secure Mineral Resource Supply Chains

In 2019, public-private partnerships to advance R&D in materials science — which we have been featuring as part of our “Profiles of Progress series” — have continued to yield positive results.

Examples include:

DoE’s New Research Center on Lithium Battery Recycling to Leverage Resources of Private Sector, Universities and National Laboratories
Advances in Metals and Minerals Research May Yield Breakthrough in Quest for Fusion Power
Public and Private Sectors to Collaborate on World Bank “Climate-Smart Mining Facility”
Penn State University Launches Center for Critical Minerals
REE Extraction and Separation From Phosphoric Acid

Sustainably Greening the Future – Changes in Mining Technology for the New Decade

Meanwhile, it’s not your grandfather’s mining industry anymore. Advances in technology harnessed by the modern mining industry make it possible to restore a balance between mining and environmental protection. As Fleming Voetmann, VP for Public Affair at the International Copper Association outlined earlier this year, “industries are responding by recognizing their responsibility and trying to meet the increased expectations of consumers, society and governments.”

Sustainably greening the future begins with responsible sourcing, an area where consumer electronics companies like Ericsson and mining companies like Rio Tinto have been overhauling their supply chain policies to ensure suppliers conform to certain environmental and social standards, while companies like consumer electronics maker Phillips and mining company Teck are supporting local communities. The World Bank’s Climate-Smart Mining Initiative also ties into this context.

But it does not end here. In an effort to offset some of the carbon costs of resource development, mining companies started to incorporate renewable power sources into their operations. These include, for example:

• Rio Tinto looking at incorporating renewables and battery storage into its main mining sites in Australia, for example, as part of its $1 billion upgrade for its Pilbara ore project
• Fortescue Metals partnering with a power utility to – with the backing of the Australian federal government – help power its Pilbara operations with solar energy and battery storage
• Gold Fields planning to predominantly operate its Agnew gold mine in Western Australia (WA) using renewable energy by partnering with a global energy group and investing in an energy micro grid combining wind, solar, gas and battery storage
• Antofagasta partnering with a utility company to turn its Zaldívar mine into the first 100% renewable energy-powered Chilean mine with a mix of hydro, solar and wind power.
• Rio Tinto looking to reduce its carbon footprint at its Kennecott Utah copper mine by as much as 65% through the purchase of renewable energy certificates

These are just a few examples from 2019. In 2020, we can expect more companies to follow suit.

Towards an All-Of-The-Above” Approach?

2019 continued the path of incremental progress begun late in 2017. Momentum has been building, but partisan obstacles remain that are near certain to continue into the coming decade. However, as ARPN Principal Dan McGroarty recently noted during a panel discussion:

“We can’t admire the problem anymore. We don’t have the luxury of time,”

arguing that once supply chains are formed, “it’s very difficult to break them, and this will have national security consequences for us.”

McGroarty has suggested that the application of an “all-of-the-above” approach we’ve come to know from the energy policy discourse – in the context of working toward “resource independence,” a focus on new mining, recycling and reclamation of new minerals from old mine tailings — could be useful in formulating policy solutions for our critical mineral woes.

To reclaim America’s leadership role, from which “we have clearly – clearly stepped away” according to Sen. Murkowski, we must take swift and comprehensive steps, building on the progress that has been made over the past few years. ARPN holds hope that the 2020’s will be the decade of American resource independence.

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