critical minerals

“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.”

At ARPN, we have long highlighted the inter-relationship between resource policy and trade policy. While more recently, we looked at tensions in our relationship with Canada over tariffs on aluminum and steel, other areas of concern are coming into focus.

Mounting tensions over trade with China have brought the Rare Earths issue, with which ARPN followers will be familiar, back to the front pages of American newspapers.

In a new two-part series for News @ Northeastern, Bill Ibelle argues that Rare Earth Metals are one of the “aces China holds in this high-stakes poker game,” and that U.S. stakeholders would be well advised to consider this leverage in policy considerations.

Citing Northeastern University Distinguished Professor of International Business and Strategy Ravi Ramamurti, an expert in emerging markets, who says that “President Trump says he holds all the cards, but China’s monopoly on rare earths is one of the aces,” Ibelle writes:

“A trade war could prompt China to cut off supplies of rare earth metals to American manufacturers. President Trump has already dragged rare earth elements into the conflict by including them on a list of proposed tariffs announced earlier this month.”

While the tariffs must be considered part of President Trump’s stated – and well-intentioned- goal to decrease U.S. over-reliance on foreign metals and minerals, they are not without challenges. As Ibelle points out:

“Efforts to find a new supply of rare earth metals, or devise technologies that supplant the need for them, are still in the early stages.”

And, as ARPN followers know, China will not shy away from playing politics with its near-total supply monopoly  – and the risk of China cutting off supply for the materials the Trump administration is considering to target with tariffs — including, but not limited to REEs — looms large.

To read Ibelle’s full piece, click here.

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 [...]

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 [...]

Escalating trade tensions have brought the issue of China’s near-total supply monopoly for Rare Earth Elements back to the front pages of American newspapers. If that isn’t reason enough for policy makers to use the momentum that has been building for the formulation of a comprehensive critical mineral strategy and an overhaul of policies standing [...]

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, [...]

You need “stuff” to make “stuff.”  It’s a simple concept, but one that is all too often forgotten. As ARPN’s Dan McGroarty wrote in a 2015 Forbes op-ed coauthored with then-CEO of mining advisory firm Behre Dolbear Karr McCurdy: “[A]s a precursor to sound policy, the nation needs a change in mind-set: It’s time to [...]

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 [...]

Video clips are a great way to ease back into the work week after a holiday.  And thankfully, the Critical Materials Institute, a Department of Energy research hub under the auspices of Ames Laboratory, has got you covered. As we recently shared, CMI Founding Director Dr. Alex King has stepped down from the post he [...]