Gateway Metals

It’s that time of the year again. We’re filling our shopping carts with food and drinks, making sure we have enough gas for the grill, and buying some fireworks. The 4^th of July, and with that, Independence Day, has arrived. But our country’s 240^th birthday is more than a good reason to throw a barbecue in honor of the men and women who have fought, and continue to safeguard our freedom today.

The 4^th of July also represents an opportune moment to reflect on what it means to be independent.  While we cherish the freedom we are blessed with in so many ways, we must not become complacent, as there are areas where we’re increasingly becoming less independent.   Our nation’s mineral resource policy is a case in point:

As our friends at the National Mining Association have aptly pointed out in their latest email message to their supporters (subscription only),  “minerals make possible much of the technology that enables national defense” and  “keep our nation and our troops safe and fuel innovations that improve veterans’ quality of life.”

Recognizing the importance of critical metals and minerals, the United States began placing an emphasis on securing access to these materials in the 1950s.   However, a recent USGS analysis paints a troubling picture.  An analysis of data collected between 1954 and 2014 shows that our reliance on foreign non-fuel minerals has significantly increased over the examined 60-year time frame – both in terms of number and type, as well as percentage of import reliance. As we previously pointed out:

“The data clearly shows that whereas the number of nonfuel mineral commodities for which the United States was greater than 50% net import-dependent was 28 in 1954, this number has increased to 47 in 2014.  And while the U.S. was 100% net import reliant for 8 of the non-fuel commodities analyzed in 1954, this total import reliance increased to 11 non-fuel minerals in 1984, and surged to 19 in 2014.”

What’s more, there has been a drastic shift in provider countries:

“Whereas in 1954 the U.S. sourced metals and minerals largely from our trading partners, our diversified supply sources today also include a number of countries that are ranked as ‘unfree’ and ‘less free’ on various indices, thus raising the specter of supply disruptions given the volatility of geopolitical realities.”

ARPN followers know that much of our over-reliance on foreign minerals is largely self-inflicted.  Most recently, using the example of Copper, we’ve pointed this out as part of our “Through the Gateway” informational campaign on Gateway Metals and their Co-Products, arguing that:

“With our own reserves and at mining projects ready to come online, the U.S. would not only be able to become self-sufficient with regards to meeting Copper needs, but could even position itself to be a Copper net exporter.  A similar scenario is feasible for a number of other critical metals and minerals, where we could, at a minimum, significantly reduce foreign import dependencies by harnessing our domestic mineral potential.”

James Madison, one of the Founding Fathers of the very nation the birthday of which we’re about to celebrate, once said:

“I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations.”

USGS has alerted us to one of those gradual and silent encroachments.  They come in the form of decreased exploration spending and an increase in the time it takes for domestic mineral resource extraction projects to come online courtesy of a rigid and outdated permitting process.  Hopefully, in the midst of our national birthday celebrations, our policy makers are taking note.

Over the past few weeks, we’ve taken you on a journey “Through the Gateway.” We have looked at some of the key properties and supply and demand picture for Copper, as well as Copper’s co-products Tellurium, Selenium, Rhenium and Molybdenum.*

It has become abundantly clear that Copper is a critical mineral, not just as a stand-alone traditional mainstay metal, but also as a gateway to the (mostly) rare tech metals it unlocks.

In spite of the fact that, as we’ve pointed out, the United States is home to vast mineral riches, including Copper, we are still relying on foreign imports to meet our domestic industries’ Copper demand.  With our own reserves and at mining projects ready to come online, the U.S. would not only be able to become self-sufficient with regards to meeting Copper needs, but could even position itself to be a Copper net exporter.  A similar scenario is feasible for a number of other critical metals and minerals, where we could, at a minimum, significantly reduce foreign import dependencies by harnessing our domestic mineral potential.

Standing in the way of such a development, however, is a combination of decreased exploration spending and an increase in the time it takes for domestic mineral resource extraction projects to come online courtesy of a rigid and outdated permitting process.

At present, it takes roughly seven to ten years to get a mining project permitted in the United States.   Without compromising environmental standards, that very process is wrapped up in one to two years in Australia, and three to five years in Canada.

With that said, there may be some light at the end of the tunnel.

In a rare show of bipartisanship, the United States Senate has passed legislation that may represent a first step at addressing the United States’ over-reliance on foreign mineral resources. For the first time in years, a set of provisions aimed at improving our near worst-in-the-world permitting process included in Sen. Lisa Murkowski’s (R-AK) energy bill, which is co-sponsored by Sen. Maria Cantwell (D-WA), may actually stand a chance of making it to the President’s desk.  However, only weeks before the summer recess, the path towards reconciling Senate and House versions of the legislation has yet to be cleared.

At the executive branch level, efforts are also underway.

Several initiatives, such as the Defense Logistic Agency’s work to overhaul the defense stockpile to appropriately address today’s critical mineral needs, the White House’s Materials Genome Initiative, and the Critical Materials Institute operating under the auspices of the Department of Energy come to mind.

However, much more must be done.

As ARPN’s Dan McGroarty told Congress earlier this year:

“I don’t think there’s another nation in the world that can match American ingenuity. We can pioneer the ideas behind wind and solar and so much else – but where will the materials that make these new energy sources real – where will they come from?

How we answer that question will determine to a large extent whether the U.S. can regain its manufacturing might… Whether America will lead the alternative energy revolution… And whether the U.S. will have the metals and minerals we need to provide the modern military technology we depend on.”

Having concluded our feature month for Copper and its co-products, we will now move on to discussing our next gateway metal after the 4th of July break. Stay tuned.

* While the Copper refinement process on occasion also yields access to some Rare Earth Elements (REEs), these quantities are very limited. As ARPN readers will find plenty of REE coverage on our blog, REEs will not receive separate treatment as part of this series.

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