China

Japanese electronics maker Panasonic has built a new consumer Lithium-ion factory in Suzhou, China. While the plant is located on the premises already owned by Panasonic, the new facility is a manifestation of an ongoing trend of foreign manufacturers moving their production sites into China in order to mitigate reduced access to and increased costs for critical minerals. Interestingly, the move comes at a time when the Japanese government pursues policies aimed at reducing its dependence on Chinese mineral imports.

Rising wages in China, and with that increased production costs, may be slowing the trend of manufacturers flocking to China to a degree, however the lure of metals and minerals cannot be dismissed. As American Resources principal Dan McGroarty phrased it in a piece for Real Clear World last October:

The magnet drawing American automakers to China these days isn’t metaphorical: It is quite literally the Rare Earths magnets and other metals-based components critical to batteries and parts necessary for mass electric vehicle production. Just as we have seen with solar panel and wind turbine producers, China has the metals – and where the metals are, manufacturing will follow.

Unlike with Rare Earths, China may not have the near-total supply monopoly for Lithium. It is, however, one of the top-three suppliers for U.S. manufacturers, who, according to USGS data, are more than 80 percent dependent on foreign-sourced Lithium. Meanwhile, domestic Lithium reserves, while not necessarily abundant, are available. With Lithium usage on the rise, it is entirely possible that the mineral, which is currently only featured on the American Resources “Watch List” may make our “Risk Pyramid” of critical metals and minerals in future years.

With China ready to play politics with its mineral supplier status, the time to focus on exploring and developing our domestic mineral resources is now.

In a new piece on her website, MetalMiner co-founder and American Resources expert Lisa Reisman asks if Manganese is the “Twin Brother or Ugly Stepchild of the Rare Earth Metal Family.”

Indeed, there are a number of similarities between both metal markets, which Reisman lists as follows:

· Both share significant supply constraints, forcing sourcing managers to devise supply- and commodity risk management strategies.
· Both come primarily from China.
· Both have seen price drops as a result of restrictive public policies.

CEO of junior miner American Manganese Larry Reaugh’s conclusion (based on a study conducted by the CPM Group) that China may well become a net importer of Manganese by 2018 as shutdowns for smaller plants along with other factors will drive cost up, also sounds familiar to those keeping a close eye on the Rare Earths.

American Manganese will likely begin operations at its project site in Arizona, for which it has filed a preliminary feasibility report, by 2015, thus helping to reduce the United States’ near-total reliance for Manganese from China. However, whether twin brother or ugly stepchild – the U.S. should take steps to this end on the policy level, as well. Reisman lists several elements that would go far in meeting this challenge for all critical metals and minerals:

“Enactment of US legislation and coordination among government agencies elevating the status of the 43 minerals listed in a recent ARPN report, requiring the development of complete supply chain risk management strategies for each and every mineral;

• Streamlining the US mining permitting process, currently the longest in the world;
• The establishment of public-private partnerships in which industry works with the DOD and other national security agencies to devise strategies and tactics to secure supply of key materials, and
• Strict enforcement of rules-based trade, among several others.”

Some in Congress have received the message – but whether this will result in actual policy changes remains to be seen.

As reports about China’s restrictive mineral export policies continue to dominate the resource news cycles, don’t expect Beijing to slow down its aggressive pursuit of access to critical metals and minerals around the world. According to China Daily’s European edition, senior Chinese industry officials have announced that Chinese miners will accelerate the exploration of overseas [...]

In an Industry Week piece from earlier this month, Paul Martyn, vice president of supply at BravoSolution, shares his thoughts on the dangers of China’s Rare Earths supply stranglehold from a U.S. manufacturing perspective, and ways to address this challenge. Here are the key points from the piece: • China’s near-total Rare Earths monopoly has [...]

In his latest column for Real Clear World, American Resources principal Daniel McGroarty zeroes in on the newly-released Chinese government white paper entitled ‘Situation and Policies of China’s Rare Earths Industry’ and notes the insight it provides into China’s broader mineral strategy. McGroarty’s key points are as follows: · The white paper essentially sets the [...]

Earlier this month, China’s President Hu Jintao paid a three-day visit to Denmark. Danish officials were quick to dismiss speculations that Arctic issues were on the agenda, but the fact that “the leader of the world’s most populous country decided to visit a nation of 5.6-million for the first time in 62 years” only two [...]

China’s aggressive pursuit of mineral resources around the globe continues with Africa being a “key destination for meeting China’s resource acquisitiveness,” according to a presentation given at the Coaltrans Southern Africa conference earlier this month. As outlined in an article on MiningWeekly.com, China’s quest for resources in Africa, which centers on oil, gold, platinum, copper, [...]

Underscoring the timeliness of the American Resources-sponsored Strategic Minerals Conference 2012, Sterling Burnett, a senior fellow with the National Center for Policy Analysis, has a piece on The Hill’s Congress Blog outlining how current domestic mining policies threaten our national security and economy. A few of Burnett’s key points: · The latest WTO case filed [...]

ARPN’s Tungsten Month is over, but we will make an exception in the case for investment legend Warren Buffett. It seems one of his investment arms is taking a position in the re-commissioned tungsten mine in the United Kingdom, last operated as part of the industrial war effort during World War II. As American Resource [...]

In his latest column for RealClearWorld, American Resources principal Daniel McGroarty takes exception to the Department of Defense’s assessment of the role of rare earths in the defense supply chain. In its (long-overdue) report on the issue, the agency shrugged off concerns, concluding that there is no reason to be worried about potential vulnerabilities due [...]