critical minerals

Against the backdrop of growing threats to U.S. security – recent flash points involve Russia, China, Iran, and North Korea – a new Presidential Executive Order “On Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States,” zeroes in on defense readiness. The E.O. requires heads from various cabinet departments to submit to the President policy recommendations for strengthening the U.S. defense industrial base.

The problem, as ARPN’s Daniel McGroarty outlines in a new commentary for Investors Business Daily, runs far deeper than scenarios in which “there is only one U.S. company that can repair submarine propellers – (…) Our metals and minerals dependency on foreign sources of supply is great and growing.”

ARPN followers are familiar with the overall picture: According to the U.S. Geological Survey, we are 100% reliant on foreign imports for 20 metals and minerals. For another 50, we are more than 50% import dependent – with China being a leading supplier for 28 of the 50. 

McGroarty points to fused aluminum oxide to underscore the severity of the situation, arguing that “there’s nothing quite like a raw material shortage to bring the lengthiest supply chain to a standstill:” 

While we are more than 75% import dependent for our annual domestic fused aluminum oxide supply, according to USGS, defense-grade aluminum fused oxide is even harder to come by, leaving our import dependency for this material at 100%, with the world’ leading providers being China and Venezuela – none of which are the poster children of reliable trading partners. 

Says McGroarty:

“In announcing the Executive Order, Navarro noted that it ‘does not silo defense, the economy and trade and the workforce,’ but embraces ‘all the interconnections between a strong manufacturing base, a strong industrial base, a strong workforce … that strengthen our tax base which … allows us to buy the material and weapons.’

A fine and expansive statement, to which we should make a one-word amendment: Instead of buying the strategic materials used in U.S. weapons platforms, whenever we can, we should be mining that material here at home.

And that requires reversing the slide that has seen the U.S.’s share of global mining exploration investment in steady decline the past two decades, even as the length of the federal permitting process has doubled. Here, we need not wait for the President’s Defense Industrial Base report; we should press for passage of critical minerals legislation now before the Congress, with meaningful permitting reform.”

McGroarty has additional suggestions as to what can be done to foster a policy environment conducive to harnessing our nation’s arguably vast mineral potential, and calls for the realization of the strategic importance of mainstay metals like Copper, which in the tech metal era, serve as “Gateway metals” to other critical minerals. 

He concludes:

 “Defense readiness has long been a key bulwark of American strength — and worrying about it has an equally lengthy pedigree. In his oft-quoted farewell address, in a largely overlooked passage, President Dwight Eisenhower warned: ‘We can no longer risk emergency improvisation of national defense.’ That was 1961, at the height of the U.S.-Soviet Cold War.

In 2017, with threats emanating from Moscow, Beijing, Pyongyang and Tehran, this is one instance where it would pay for America to Be Like Ike.” 

The time for a strategic overhaul of our mineral resource policy is now. 

In a recent article, the Financial Times zeroes in on one of the metals followers of ARPN will know is becoming increasingly indispensable to 21st Century clean energy technology: Cobalt. 

Once an obscure metal you rarely heard about, this co-product of Nickel and Copper is increasingly afforded “critical mineral status” – primarily because of its application in Lithium-ion battery technology.

The Financial Times calls out electric carmaker Tesla for only once mentioning the word “cobalt” in a 111-page draft prospectus for a proposed $1.5bn senior note offering:

“This cursory mention of the electric carmaker’s dependence on the metal must have passed a formulaic test of what securities laws require. It may not, however, pass a laugh test among those familiar with the Democratic Republic of Congo, which accounts for more than 60 per cent of world cobalt production and is the principal prospective source of new supply. Tesla has always been a company of the future funded by investors’ equity. The problem with a debt issue (the $1.5bn note matures in 2025), is that there is a more certain date with material reality.

It has become more apparent that cobalt supply could be the choke point for the mass production of electric vehicles that are capable of replacing the standard car or light truck.”

 The Financial Times piece correctly argues that the most significant barrier to EV mass production is not so much price – even though prices have indeed soared – it is the availability of supply. As we have previously pointed out: 

“On a global scale, 93 percent of the Cobalt refined in China – the world’s biggest Cobalt consumer – originates in the DRC, which, at 3,400,000 metric tons, is also home to the world’s largest Cobalt reserve.
Roughly 62 percent of global refined Cobalt is sourced in the Democratic Republic of Congo (DRC), where production conditions involving involve child labor and poor environmental standards in some instances, have invited sharp criticism, but have prompted tech companies to re-evaluate their sourcing strategies.”

And while optimists point to new Cobalt development projects around the world and argue that “lithium-ion batteries’ cobalt requirements can be engineered down,” there is no near-term silver bullet. Substitution will require significant amounts of time, testing and investment, and the DRC will remain a crucial factor. 

 Caspar Rawles, analyst for Benchmark Mineral Intelligence, recently put it bluntly: 

“While there are a number of new cobalt projects being developed around the world, quite simply: there will be no electric vehicle industry without DRC cobalt.” 

Domestic projects coming online are welcome developments to alleviate certain pressures and concerns, and should be part of a comprehensive overall mineral resource strategy for the United States but they can only be a starting point. Cobalt needs to be high on everyone’s radar, not a footnote in dusty financial documents. 

Our friends at the American Exploration and Mining Association (AEMA), headed up by Laura Skaer, have overhauled their website.  The “122-year old, 2,000 member, national association representing the minerals industry” and the “entire mining life cycle” shares news about its mission and advocacy efforts, and provides information about annual meetings as well as facts about [...]

Meeting one of its “stretch goal[s] to demonstrate that rare-earth magnets could be produced from mine to manufacturer, here in the United States,” the Critical Materials Institute (CMI) a U.S. Department of Energy Innovation Hub, has announced that the has fabricated magnets made entirely of domestically sourced and refined REEs.  This success was achieved in [...]

It is “the single largest source of mineral commodities for the United States, particularly for resources like rare earth elements, germanium, and industrial diamonds,” according to the United States Geological Survey, which notes in its most recent Mineral Commodity Summaries report that “of the 47 mineral commodities that the United States is more than 50 [...]

We appreciate them for their traditional applications, but metals like Copper and Tin are far more than your mainstay materials.  We discussed their Gateway Metal status here, but it’s not just the fact that their development yields access to some of the most sought-after tech metals that makes them so indispensible – it’s advances in materials [...]

At ARPN, we have consistently highlighted the importance of Gateway Metals, which are materials that are not only critical to manufacturing and national security in their own right, but also “unlock” tech metals increasingly important to innovation and technological development. With advancements in materials science, these co-products, many of which have unique properties lending themselves [...]

While relations between Russia and the United States continue to make headlines on a daily basis, one particular aspect of this relationship – in spite of the fact that it may be one of the most contentious ones – has been largely flying under the radar. As Fox News national security correspondent Jennifer Griffin recently wrote: [...]

Advances in materials science continue to transform the way we use metals and minerals, and in doing so, also change the supply and demand scenarios for many materials. As we recently pointed out on the ARPN blog, demand for Cobalt has been soaring thanks to its applications in battery technology and the growing popularity of electronic [...]

Once an obscure metal most people had rarely heard about, Cobalt, a co-product of Nickel and Copper, is becoming a hot commodity and is increasingly afforded “critical mineral” status. The main reason for this development is Cobalt’s application in Lithium-ion battery technology. Soaring demand for rechargeable batteries and the growing popularity of electric cars have sent the [...]