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Against the backdrop of surging demand for critical minerals and mounting geopolitical pressures, countries all over the world have stepped up their involvement in the critical minerals sector as the green energy transition charges on.

Followers of ARPN are aware of rising resource nationalism in Latin and South America, parts of Asia, and now Africa (see our most recent coverage of the issue here).  While some of these developments can be chalked up to a historically penchant for resource nationalism, more recently, government involvement in the critical minerals sector is on the rise even in the Western world.

As ARPN outlined earlier, while modern Western democracies are typically hesitant to embrace more state intervention in the critical minerals sector, many believe that in order to succeed, the United States and its allies need to learn “how to stomach more state intervention [themselves].” 

While state involvement has taken different forms depending on the geographical region, type of government and prevailing political leanings in a given country, a general trend towards more government intervention in this field cannot be dismissed, prompting PHP Group Ltd. Chief Executive Officer Mike Henry to warn that some of these efforts could backfire, and in fact undermine the global push towards net zero carbon emissions.

Speaking at an industry conference in Brisbane, Australia, he told attendees that it was “‘understandable’ that nations were scrambling to secure domestic supply of the metals needed in renewable energy and electric vehicles, but warned against an excessively domestic focus and over-reliance on the ‘sugar hit’ of state-provided subsidies,” as Yahoo Finance reports.

Said Henry:

“Governments striving to secure their own critical mineral supplies must ensure they don’t undermine the outcome the world needs to achieve – where in fact a combination of pragmatic international cooperation and competition can jointly accelerate the energy transition,” 

Speaking specifically in reference to Australia’s just-released critical minerals strategy, which had left some disappointed as they had hoped for more subsidies, permitting reforms and additions to the country’s critical minerals list, he added:

“There’s a big movement underway in the U.S. right now towards permitting reform. Australia needs to do that,” and “[w]hat governments here – federal and state – should focus on are those things within their control to make investment fundamentally more attractive,” i.e. focus on better productivity and fiscal settings.

Henry’s comments should give policy stakeholders pause as they rush towards protectionism.

For a prudent all-of-the-above mineral resource policy to succeed, governments should avoid a heavy-handed approach and rather focus on providing well-structured frameworks conducive to unleashing their countries’ mineral potential and securing critical mineral supply chains without stifling the progress that stems from market innovation.

It’s back to the grind.

The parades, barbecues, pool parties and fireworks to mark this year’s Independence Day are over.  There’s much to be thankful for, especially at a time when the impact of Russia’s war on Ukraine, now in its second year, reverberates around the globe and geopolitical tensions continue to mount.

ARPN has 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.

Thankfully, stakeholders are increasingly aware of the urgency to strengthen critical mineral supply chains, and, on the heels of a global pandemic, ongoing war between Russia and Ukraine, and growing resource nationalism, a flurry of activity has dominated the critical minerals space, ranging from domestic efforts over bilateral trade agreements to multilateral alliances.

For the U.S., a notable example of domestic efforts is the series of DPA Presidential Determinations involving specific Critical Minerals, beginning with President Trump’s July 2019 designation of the Rare Earth permanent magnet supply chain being designated as “essential for the national defense,” followed by President Biden’s designation of what ARPN calls the “Battery Criticals” as DPA Title III eligible in March 2022, followed by Platinum and Palladium in a DPA Presidential Determination in June 2022.  Earlier this spring, two further Presidential Determinations (February 27, 2023 Presidential Determination, and DPA Presidential Determination (2023-5)), effectively created an entirely new category of critical minerals – the “defense criticals” and designated airbreathing engines, advanced avionics navigation and guidance systems, and hypersonic systems and their “constituent materials” as priority DPA materials.

(for more on the Defense Criticals, read our post here.)

Followers of ARPN are further aware of policy initiatives like the United States’ Inflation Reduction Act (IRA) or the European Union’s Critical Raw Materials Act (CRMA), which are currently being followed by bilateral trade agreements, as well as U.S.-EU discussions to launch a “critical mineral club.”

While the United States and our partners have taken several important steps to decouple critical mineral supply chains from China, Beijing, having systematically built out its dominance across the entire value chain from mining over processing to manufacturing, still has a chokehold on many key critical minerals, and particularly the EV battery supply chain.

And for all of the recent U.S. policy efforts, the latest USGS Mineral Commodity Summaries report confirmed that our critical mineral dependencies still persist.

There is momentum to change this, 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.

With a new “Great Game” afoot in the global mineral resource realm (see our most recent post on the issue here), the U.S. must double down on its push to secure critical mineral supply chains from “soup to nuts” to borrow a term used by U.S. Energy Secretary Jennifer Granholm.

With the West’s resource dependence running deep, and Beijing’s determination to continue its global quest for resource dominance unbroken, the critical mineral arms race will continue to heat up.   Stakeholders here and elsewhere must gear up for the long haul.

As ARPN stated in a previous post, Rome wasn’t built in a day.

Neither was the United States of America.

But built it was, challenges were overcome — and we are celebrating the men and women who have fought for and continue to safeguard our freedoms this week.

Here’s hoping that one day we will be able to say the same for the critical mineral supply chains that anchor the technology economies of the 21st Century.

As nations all across the globe scramble to secure critical mineral supply chains against the backdrop of surging demand in the context of the green energy transition and rising geopolitical tensions, India is stepping up its critical mineral resource policy game. This week, the Indian Ministry of Mines released a comprehensive Critical Minerals List, consisting of 30 [...]

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Resource nationalism has arrived in Africa. After Zimbabwe banned lithium ore exports last December in a move that only permits concentrates to be shipped out, Namibia has banned the export of unprocessed lithium and other critical minerals, according to Reuters. The country is largely known as a source for uranium, but also has significant deposits of lithium [...]

In their quest to secure critical mineral supply chains against the backdrop of surging demand and rising geopolitical pressures, stakeholders are leaving no stone unturned – quite literally — and have in fact begun turning the same stone twice. As Australia’s Financial Post reports, the Australian government has completed a mapping project of sites containing mine [...]

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As geopolitical tensions continue to mount all over the globe, leaders of the Group of Seven (G7) countries gathering in Hiroshima, Japan last week reaffirmed the need to “manage the risks caused by vulnerable minerals supply chains and build more resilient sources.”   Buried in the boilerplate consensus common to G-7 sessions is real interest in cooperation among the [...]

Even before the Biden Administration announced the “most aggressive” plan to curb tailpipe emissions to date with new vehicle pollution standards proposed by the Environmental Protection Agency (EPA) last month, automotive OEMs and Tier 1 suppliers were facing difficulties getting both the parts and raw materials needed for their electric vehicle (EV) components. The newly proposed rules [...]

Against the backdrop of the accelerating global push to net zero carbon emissions, a volatile overall geopolitical climate and a new EPA proposal to tighten tailpipe emission standards U.S. stakeholders are looking for ways to secure critical mineral supply chains. The expectation is that with the proposed EPA rules requiring automakers to reduce carbon emissions [...]