-->
American Resources Policy Network
Promoting the development of American mineral resources.
  • Canada’s New Critical Mineral Investment Rules for State-Owned Entities Harden Already-Drawn “Geopolitical Battle-Lines in the Metals Sector”

    Within days of Canada outlining new investment stipulations for state-owned entities aimed at protecting the country’s critical minerals sector, the Canadian government last week told three Chinese resource companies to divest their interests in Canadian critical mineral firms.

    Basing the decision on “facts and evidence and on the advice of critical minerals subject matter experts, Canada’s security and intelligence community, and other government partners,” Canada’s Minister of Innovation, Science and Industry declared in a statement:

    “While Canada continues to welcome foreign direct investment, we will act decisively when investments threaten our national security and our critical minerals supply chains, both at home and abroad. In accordance with the [Investment Canada Act], foreign investments are subject to review for national security concerns, and certain types of investment—such as those in the critical minerals sectors—receive enhanced scrutiny.

    Therefore, we reviewed a number of investments in Canadian companies engaged in the critical minerals sector, including lithium. These companies were reviewed via the multi-step national security review process, which involves rigorous scrutiny by Canada’s national security and intelligence community. As a result of that process, the Government of Canada has ordered the divestiture of the following investments by foreign investors in Canadian critical mineral companies: 

    • Sinomine (Hong Kong) Rare Metals Resources Co., Limited is required to divest itself of its investment in Power Metals Corp.
    • Chengze Lithium International Limited is required to divest itself of its investment in Lithium Chile Inc.
    • Zangge Mining Investment (Chengdu) Co., Ltd. is required to divest itself of its investment in Ultra Lithium Inc.”

    As Reuters columnist Andy Home observes, the new policy on critical mineral investment is both “wide ranging and far-reaching:”

    “It’s not just China’s state-owned players that will come in for extra scrutiny, but also any private investors ‘assessed as being closely tied to, subject to influence from, or who could be compelled to comply with extrajudicial direction from foreign governments.’”

    What’s more, he argues, “the policy covers not just mining but all stages of the minerals processing chain.”

    The ramifications of Canada’s move will stretch beyond our neighbors’ borders. For one, it hardens the already drawn “geopolitical battle-lines in the metals sector” between the West and adversary nations, i.e. China.

    It also places additional pressure on all segments of the already strained  U.S. critical minerals supply chain.

    The recently passed congressional Inflation Reduction Act contained sourcing requirements for EV credits.  Observers have outlined that, while sending an appropriate message, the requirements also represent an “almost insurmountable challenge” as “considering it takes seven years to build a mine and refining plant but only 24 months to build a battery plant, the best part of this decade is needed to establish an entirely new industry in the United States.”  

    The global push towards net zero carbon emissions, which has received fresh impetus with the COP 27 climate summit commencing today in Sharm El Sheik, will further up the ante.

    While we are still days and maybe weeks away from leaving the Congressional midterm election with all its theatrics in the rear view mirror, policymakers and other stakeholders would be well-advised to shift focus from politics to policy, and act swiftly and decisively to bolster North American supply chains.

    Share
  • President Xi Jinping’s “Coronation” Adds Fuel to the Fire to Decouple Critical Mineral Supply Chains from China

    With pressures rising on critical mineral supply chains as nations rush to flesh out environmental initiatives before the COP27 climate change summit kicks off in Sharm El Sheikh next month, the stakes for the United States and its allies to “decouple” from adversary nations — in the new U.S. National Security Strategy, read:  China — may have gotten even higher with China’s Communist Party (CCP) confirming President Xi Jinping for another term in office this past Sunday.

    In what effectively amounted to a “coronation,” as the Wall Street Journal editorial board phrased it, the CCP’s move has effectively “confirm[ed] China’s combination of aggressive nationalism and Communist ideology that is the single biggest threat to world freedom.” 

    Mr. Xi’s confirmation to another term was hardly a surprise, but in his landmark speech addressing the CCP Congress, he emphasized the the need to increase China’s self-sufficiency in technology and supply chains, and reaffirmed China’s commitment to attaining control over Taiwan — a key point of contention in the country’s relations with the United States, which have already starkly deteriorated in recent years.  According to the Wall Street Journal, the “coronation” “all but guarantees an era of confrontation between China and the U.S.”

    Aware that “China has big footed a lot of the technology and supply chains that could end up making us vulnerable if we don’t develop our own supply chains,” as U.S. Secretary of Energy Jennifer Granholm phrased it earlier this summer, the United States and its partners have stepped up efforts to decouple from China.

    These may become all the more pressing in light of current fears, as Damon Kitney reports for The Australian, that China may seek to retaliate after the U.S. Department of Commerce announced sweeping limitations to semiconductor and chip-making equipment sales to Chinese customers this fall.

    Speaking to a private forum in Melbourne, earlier this month, Australia’s former Ambassador to the U.S. and federal Treasurer Joe Hockey told attendees:

    “In terms of critical minerals, my concern is – and there has started to be a few reports in the US suggesting this – is that after the midterm elections, and with a re-empowered (Chinese President) Xi Jinping, as of next year China will start to turn down the tap on the supply of critical minerals to the US and other places.”

    Followers of ARPN have long known that China is no stranger to playing politics with its near-total rare earths supply monopoly, and just last year, we saw the country threatening to limit rare earth shipments to U.S. defense contractors over U.S. arms sales to Taiwan.

    Thankfully, U.S. domestic efforts to bolster supply chains can be complemented with leveraging close cooperation with allied nations including Canada and Australia.

    Australia is ready to step up its rare earths game and challenge China in this segment.  As Phil Mercer writes for BBC News, Sydney“Australia, a superpower exporter of iron ore and coal with rich mining traditions believes it is well-placed to join the race to exploit minerals that provide critical parts for electric vehicles and wind turbines.” He cites John Coyne of the Australian Strategic Policy Institute, who — while warning that China will not easily surrender its dominance of the sector — says:

    “Australia has the world’s sixth-largest reserves of rare earth minerals. However, they remain largely untapped with only two mines producing them.  There is significant potential in the establishment of multi-ore mineral-processing hubs in Australia. After all, there is no point in creating supply chain resilience for [rare earth] ores if miners must still send them to China for processing.”

    Mercer points to the U.S. Defense Department’s deal with Australian miner Lynas Rare Earths, which has been contracted to construct a REE processing facility in the U.S..

    In the same vein,  the Canadian government has inked an agreement with Rio Tinto to jointly invest $737 million to modernize the company’s Sorel-Tracy, Quebec metals processing plant, with  Rio Tinto’ chief executive Jakob Stausholm warning of the “excesses of globalization” in critical mineral supply chains. The move is said to strengthen “North America’s first production capacity for titanium metal, a lightweight but strong material important to aerospace and defense groups such as Boeing and Lockheed Martin.” 

    Stateside, the U.S. Department of Energy has just announced the first round of funding under the 2021 bipartisan infrastructure act for projects aimed at “supercharging” U.S. manufacturing of batteries for electric vehicles and electric grid — another important step in the decoupling from adversaries like China.

    With a newly-emboldened Mr. Xi reportedly seeing the possibility of a showdown with the West as “increasingly likely”in the context of his goal to “restore China to what he believes is its rightful place as a global player and a peer of the U.S,” as the Wall Street Journal writes, these efforts could not be more urgent.

    Share
  • As Global Environmental and Geopolitical Pressures Intensify, So Do Cooperative Efforts — A Look at the Canadian-South Korean Critical Minerals Partnership and the MSP

    While the coronavirus pandemic may no longer occupy the top of the hour slot in news broadcasts, the supply chain challenges it unearthed for many of the materials we rely upon are here to stay.  And as the global push towards net zero carbon emissions gets kicked into high gear, nations are increasingly realizing their own [...]
  • A New “Great Game” is Afoot – Are We Able to Keep the Focus on Diversifying Critical Mineral Supply Chains Away from Adversaries

    In a new piece for Canada’s Globe and Mail, columnist Robert Muggah zeroes in on the geopolitics of mineral resource supply, which have, in his view, triggered a new “Great Game” – a term coined by British writer Rudyard Kipling to describe the “fierce competition between Victorian Britain and Tsarist Russia, both of which sought to control South Asia [...]
  • A Look North – A Canadian Perspective on China’s “Encroachment” on the Critical Minerals Industry

    In a new piece for Canada’s Globe and Mail, Niall Mcgee discusses China’s quiet but systematic campaign to corner the critical minerals segment in Canada and stakeholder reactions in Ottawa, or more precisely, the lack thereof. Citing the 2019 acquisition of the Tanco Mine in Manitoba, known as one of the world’s few sources of cesium [...]
  • U.S. Sen. Joe Manchin Calls for Strengthening U.S.-Canadian Energy and Critical Minerals Partnership

    Along with U.S. Sen. Lisa Murkowski (R-AK), U.S. Sen. Joe Manchin (D-WV) has long one of the lead champions of a more comprehensive approach to mineral resource security. On the heels of lamenting the delayed implementation of a set of critical mineral provisions included in the Energy Act of 2020 and the bipartisan infrastructure package [...]
  • As Allies Take Steps to Unleash Mineral Potential, U.S. Must Not Become Complacent – “Friend-Shoring” Piece of the Puzzle, not Panacea

    As U.S. stakeholders grapple with the question of how to bolster U.S. supply chains for the battery criticals and other critical minerals amidst skyrocketing demand scenarios and growing geopolitical pressures, our allies are taking steps of their own to unleash their mineral potential. Looking north, in order to “secure Canada’s place in important supply chains with [...]
  • Canada Takes Steps Towards A North American Battery Supply Chain

    Canada is currently in the process of positioning itself as “a cornerstone of the North American battery supply chain,” writes James Frith in a recent piece for Bloomberg. Pointing to two battery cell manufacturers choosing Canada as a future site of operation —UK-headquartered Britishvolt and Canadian-headquartered Stromvolt — Frith argues that “Canada is now on course to create [...]
  • Strengthening U.S.-Canadian Critical Mineral Resource Cooperation in the Context of an All-of-the-Above Strategy

    Against the backdrop of a new government having been elected in Canada, former U.S. ambassador to Canada David Jacobson makes the case for the United States and Canada to deepen cooperation in the realm of critical mineral resources in a recent piece for the Globe and Mail. Highlighting the longstanding “long and productive partnership on everything [...]
  • Close Allies Map Critical Mineral Cooperation

    “Do I have to draw you a map?” As idioms go, that phrase is much nicer than the message it intends – but it’s apt for a new exercise linking the collective expertise of the geological surveys of Australia, Canada and the U.S.: an interactive world map of deposits of rare earths and other critical [...]

Archives