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“Gold once lured prospectors to the American west – but now it’s cobalt that is sparking a rush,” writes the BBC in a recent feature story about Cobalt, which, as ARPN followers will know, is a “key component in the lithium-ion batteries that power electronic devices and electric cars.” 

Once a somewhat obscure metal, Cobalt has recently been afforded “Critical Mineral” status on the U.S. Department of Interior’s list of 35 minerals deemed “critical” to U.S. national security.

Meanwhile, U.S. import reliance for Cobalt is pegged at 72 percent, with recycling providing most of the balance.  As rising demand and supply complications have combined in recent years, battery makers have begun exploring technologies that require less of the material, but, as Alaska journalist Shane Lasley recently pointed out:

“Researchers and analysts do not see a scenario where the reduction of cobalt per battery can come close to offsetting the growing number of batteries that will be needed in the coming three decades.”

The dynamics are quickly changing. Writes the BBC:

“In the past, cobalt supply depended on the markets for copper and nickel, more valuable metals that are typically extracted alongside cobalt.

But with cobalt prices on the up and consumption projected to rise by between 8% to 10% a year, its status as a by-product has started to change, says George Heppel, senior analyst at research firm CRU Group in London.”

Thus, not surprisingly, while most of the world’s Cobalt is found is found in the Democratic Republic of the Congo – a challenge in its own right – there are now about 300 companies worldwide on the hunt for cobalt deposits, writes the BBC.

In the U.S., companies are staking claims in various states, including Idaho, Montana and Alaska.

The BBC cites Benchmark Mineral Intelligence analyst Caspar Rawls, who thinks that while U.S. companies only represent a small fraction of the Cobalt market, “they may find they are able to command a premium price for their materials,” and says:

“Every company in the supply chain is looking to reduce their geopolitical risk, so I think any project outside of the DRC is in a strong position in that sense.” 

Whether U.S. policymakers understand the gravity of the situation, however, is an open question.

As we reported last week, Congress has just missed a great opportunity for meaningful policy reform that could have helped the U.S. do just that — “reduce their geopolitical risk” — when conferees for the 2019 National Defense Authorization Act (NDAA) failed to retain key critical minerals provisions in the final conference report.  And in the one clause in the defense bill that does touch on metals and minerals – a section entitled “Prohibition on acquisition of sensitive materials from non-allied foreign nations” – while cobalt appears as a “sensitive material” (in the form of samarium-cobalt permanent magnets), the list of non-allied foreign nations from which the U.S. is not allowed to acquire the materials does not include DRC Congo.

It’s hard not to conclude that this patchwork approach is no substitute for a coherent, comprehensive policy.

Meanwhile, the headline from a Wall Street Journal report from earlier this year says it all:  “There’s a Global Race to Control Batteries – and China is Winning.  Chinese companies dominate the cobalt supply chain that begins at mines in Congo.”

A recent Bloomberg story we featured last week put a face on the specter of trade war over aluminum and steel, and retraced the history of this symbiotic U.S.- Canadian trade relationship and what our very own Dan McGroarty has called the “world’s most integrated defense industrial base.”  

Digging a little deeper, a new Wall Street Journal piece takes us further into a “tightly woven production chain” which “illustrates the U.S. dependence on aluminum from Canada” and outlines the ramifications of current trade tensions between both countries for manufacturers and consumers.

The use of hydroelectric power in Quebec, Canada, allows for the cost-efficient operation of energy-intensive aluminum smelters, which in recent decades has led to Canada becoming the key producer of the metal for the United States.

Writes Kim Mackrael:

“The U.S. produces just 13% of the 5.6 million metric tons of raw aluminum it uses each year.

U.S. aluminum smelters are among the costliest and oldest in the world — above $2,000 per metric ton and 47 years on average, according to market consultant Harbor Aluminum in Texas. Canada’s smelters, aged an average 26 years, make the metal for about $1,500 a ton.”

Citing Eric Krepps, who runs runs the North American automotive business at Constellium NV, a Dutch aluminum company, who argues that there is not enough domestic aluminum production in the U.S., and that “[w]e could not source everything out of the U.S. even if we wanted to,” Mackrael reports that:

“Instead, the 10% tariffs are already adding costs right down the supply chain — directly through the duty paid at the border and indirectly though higher aluminum prices, delays and added bureaucracy, manufacturers say. Tariffs have contributed to a doubling in the premium paid for North American aluminum since January.

Analysts and some car companies say the higher aluminum prices will likely be passed on to American car-buyers rather than absorbed entirely by companies.”

Read more here – and to read more about the security implications of the escalating U.S.-Canada trade tensions over aluminum and steel tariffs, read Dan McGroarty’s recent piece for Investor’s Business Daily, entitled “The U.S.-Canada Trade War’s Collateral Damage: The U.S. Defense Industrial Base.”

Earlier this week, the full U.S. Senate Energy and Natural Resources Committee held a hearing to “examine the Department of the Interior’s final list of critical minerals for 2018 and opportunities to strengthen the United States’ mineral security.” Panelists included representatives from USGS and the Critical Materials Institute (CMI) as well as industry stakeholders and [...]

Last month, our very own Dan McGroarty argued in a piece for Investor’s Business Daily that the escalation of the trade war over U.S.-imposed trade tariffs on Canadian made aluminum and steel has serious implications not only for our economy, but also for the U.S. defense industrial base.  In it, he outlined the genesis of [...]

Bearing testimony to the growing importance assigned to the issue of critical minerals, the full U.S. Senate Committee on Energy and Natural Resources will hold a hearing to “examine the Department of the Interior’s final list of critical minerals for 2018 and opportunities to strengthen the United States’ mineral security” on Tuesday, July 17, 2018, [...]

In recent weeks, we have seen a flurry of articles and commentaries in national publications discussing reforms to address our ever-growing reliance on foreign mineral resources.  The two most recent examples are member of the ARPN expert panel Jeffery A. Green’s piece in Real Clear Defense entitled “Dangerous Dependence on China for Critical Minerals Runs [...]

It’s that time of the year again – we load up our shopping carts with fireworks and burger buns, and gear up for parades to honor of the men and women who have fought, and continue our safeguard our freedom today. Many of us will have already traveled this week – and according to AAA, [...]

Sometimes the title says it all: “Copper and cars: Boom goes beyond electric vehicles,” writes Mining.com contributor Frik Els. And indeed, while there is some uncertainty in light of the specter of a trade war looming between the United States and China, triggering a market pullback, the longer term outlook for Copper remains “rosy” precisely [...]

“We still have the most capable military in the world, but that position is increasingly in jeopardy.” That’s the sobering verdict of ret. Col. Wesley Hallman, senior vice president of policy at the National Defense Industrial Association, in a commentary for Defense News. Hallman argues that there are three misconceptions of America’s martial powers that [...]

In case you haven’t noticed, EV battery technology is the new black. With Lithium being one of the key metals driving this technology, our friends at Benchmark Mineral Intelligence have looked at the material’s supply chain – and the time it takes to develop the respective components of it. As Simon Moores, managing director at [...]