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American Resources Policy Network
Promoting the development of American mineral resources.
  • Tech Arms Race to Heat Up as Western Nations Take Steps to Counter China on Semiconductors, Critical Minerals

     Semiconductors have become indispensable components for a broad range of electronic devices.

    They are not only “the material basis for integrated circuits that are essential to modern day life” – the “‘DNA’ of technology” which has “transformed essentially all segments of the economy,” they are also essential to national security, where they enable the “development and fielding of advanced weapons systems and control toe operation of the nation’s critical infrastructure,” as the Department of Commerce-led chapter in the Biden Administration’s 100 Day Supply Chain Review report outlines.

    As such, they sit at the heart of U.S.-Chinese tech competition, and have been dubbed “the next frontier in the tech battle between the U.S. and China” for good reason.

    In his State of the Union address last month, U.S. President Joe Biden touted last fall’s passage of the CHIPS and Science Act allocating new funding for research, development and production of semiconductors, which has spurred private investment in the sector. Following on the heels of the new law, the Commerce Department in October applied new export controls to China’s access to advanced computing chips, its ability to develop and maintain super computers and manufacture semiconductors.

    As Shubham Dwivedi and Gregory D. Wischer wrote last month for RealClearEnergy, “[t]he subsequent chip measures were clinically targeted at critical chokepoints in the global chip supply chain, and have since been backed by important partners, including Japan and the Netherlands, two key players in the advanced semiconductor ecosystem.” 

    But the semiconductor space is just the tip of the proverbial iceberg.

    Write Dwivedi and Wischer:

    “Semiconductors require various minerals such as silicon, gallium, arsenic, cobalt, and more. Silicon is the most common foundational material for chips today, while gallium arsenide is the second most common. Cobalt is increasingly important for advanced chips too.”

    As long as China controls critical mineral supply chains – and a look at the latest USGS Mineral Commodity Summaries leaves no doubt about that, semiconductor supply chains – and as such national security will still be jeopardized.

    In their quest to alleviate “undue geopolitical leverage,” U.S. allies like Canada, and more recently Australia, have taken steps to reduce Chinese influence in their critical mineral industries.

    proposal to bolster the Investment Canada Act (ICA) to empower government ministers to block or unwind critical mineral investments if these are considered as a threat to national security, considered a defensive measure against China which has invested $7 billion in Canada’s base metals sector in the past two decades, is expected to be finalized this spring. Prior to the unveiling of the proposal, Canadian officials had ordered Chinese companies to sell their stakes in three Toronto Stock Exchange-listed companies last fall.

    Australia’s Treasurer Jim Chalmers recently blocked a request by a Chinese company to boost its investment in Australian REE company Northern Minerals via a prevention order, the first move of this kind since the Treasurer had expressed concerns over the “concentrated nature of the China-dominated critical minerals supply chain” elevated by the Russia-Ukraine war.

    When Dwivedi and Wischer published their piece in February, they lamented that the CHIPS and Science Act represents a missed opportunity to strengthen the U.S. domestic critical mineral industry, and urged Congress to take up legislation to not only provide funding for domestic critical mineral projects, but rather also reform the cumbersome permitting system.

    Since then, House Republicans have put forth the  Transparency, Accountability, Permitting and Production of (TAPP) American Resources Act, H.R. 1 which seeks to bolster U.S. critical mineral supply chains by reducing red tape, entry barriers and redundancies, and reforming the National Environmental Policy Act (NEPA) to provide industry with clearer timelines and more certainty, and would emulate, to an extent Canada’s and Australia’s approach to curbing Chinese influence by seeking to limit Chinese and other “bad actors’”involvement in the U.S. critical minerals industry.

    H.R. 1 will only be an opening salvo in the discourse over securing the supply chains underpinning 21stCentury technology, but it is becoming increasingly clear that the West has woken up to the seriousness of its over-reliance on Beijing, and the tech arms race is heating up.

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  • Go West – A Look at the Western World in the Context of the Post-Cold War Critical Mineral Realignment

    As world leaders continue to deliberate on the new realities of the post-Cold War world order in Davos this week,  ARPN takes a second look at the realignment underway in the minerals sector.  In this post, we shift our focus to the West, where the “Three Amigos Summit,” as the trilateral North American Leaders’ Summit between the prime minister of Canada, the president of Mexico, and the president of the United States is sometimes called, made some headlines directly relevant to critical minerals issues.

    Leading up to the event, the three countries announced fresh commitments to work together on key sectors, such as semiconductors and critical minerals, as well as on supply chains and advanced workforce training.   As ABC News reports“those agreements include a cabinet-level summit on semiconductors, mapping mineral resources across the North American continent and promoting educational investment.”

    The United States lists a number of countries as strategic partners in its quest to achieve greater “supply chain resilience.”   However, the Three Amigos’ commitments must be viewed in the context of the overall U.S. goal of establishing a more integrated North American supply chain with Canada and Mexico being not only the largest trading partners, but also the only ones with whom the U.S. shares national borders.

    Canada and the United States have already taken their own steps to advance critical mineral supply chain security and decouple from adversary nations, i.e. China, deepened their cooperation bilaterally over the past few years, with a flurry of activities occurring over the past twelve months. Followers of ARPN will recall the invocation of the Defense Production Act and the passage of the Inflation Reduction Act. (see our Year in Review post for more).

    For Canada, 2022 culminated in the launch of the country’s Critical Minerals Strategy in December 2022, with a stated goal of speeding up the permitting process for new mines in Canada after Ottawa cracked down on Chinese investment into the country’s critical mineral sector in the wake of growing national security concerns.  In line with these policies, the Canadian federal government has just greenlighted Canadian miner Galaxy Lithium Inc.’s project to construct a new lithium mine in Quebec.

    To our south, Mexico, home to significant copper and silver deposits, is also known to have significant rare earths and lithium deposits.  While observers point out that a confluence of technological, legal and political challenges will likely continue to hamper critical mineral resource development leaving Mexico to “continue to assemble electric cars but not provide the materials for many of the key components required for a greener future,” closer cooperation between the Three Amigos in this area is welcome and likely beneficial in the long run, if Mexico is able to address some of its domestic obstacles.

    Leaving North America behind, another key U.S. partner, Australia, is forging ahead with its push to strengthen critical mineral supply chains for its own industries and for the benefit of its partners. Earlier this week, the federal government in Canberra released guidelines for “new grants to help develop Australia’s critical minerals sector, support downstream processing, create jobs across regional Australia and support global efforts to achieve net-zero.”

    Across the Atlantic, the European Union in September of 2022 proposed European Critical Raw Material Act, which aims to boost domestic critical minerals production, diversify supply chains and ramp up recycling efforts and which is scheduled to be released in the first quarter of 2023.

    In a broader global context, the United States, Australia, Canada, Finland, France, Germany, Japan, Korea, Sweden, the United Kingdom, and the European Union have banded together to form the Minerals Security Partnership, an initiative to bolster critical mineral supply chains while ensuring that “critical minerals are produced, processed and recycled in a manner that supports the ability of countries to realize the full economic development benefit of their geological endowments” (see our post on the launch here).

    Formation of the MSP, in the words of Reuters’s Andy Home, may signify a “tectonic realignment with far-reaching implications” as it — against the backdrop of Russia’s war on Ukraine and mounting tension with China — is “defined as much as anything by who is not on the invite list — China and Russia,” and likened it to the creation of a “metallic NATO (…) though no-one [was] calling it that just yet.”

    While “the shape of an alternative international system is unclear,” as the New York Times posited earlier this week in a piece on a newly emerging post-Cold War world order, it appears that the great realignment has begun, and we can expect to see more developments along these lines in the coming months.

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  • Canada Releases Critical Minerals Strategy Embedded in Geopolitical “Friend-Shoring” Context

    As geopolitical and economic stakes mount, the urgency to build out secure critical mineral supply chains is increasingly resonating with policymakers around the world.  Acknowledging that “[c]ritical minerals are not just the building blocks of clean technology like solar panels and electric vehicle batteries – they are a key ingredient for creating middle class jobs and growing [...]
  • 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 [...]
  • 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 [...]
  • 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 [...]

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