American Resources Policy Network
Promoting the development of American mineral resources.
  • Rise of “Geopolitical Swing States” Underscores Need for All-Of-The-Above Approach to Mineral Resource Security

    In the wake of the coronavirus pandemic, emerging supply chain challenges across all sectors, Russia’s unprovoked war on Ukraine, as well as trade and geopolitical rifts between key global players deepening, many have asked whether the age of globalization, which followed the end of the Cold War, is over.

    With the world having become increasingly interconnected and interdependent in the years that followed the collapse of the Soviet Union, fears that globalization is dead are likely overblown, but, as the Wall Street Journal pointed out earlier this year, it is certainly changing.

    The world is becoming more fragmented, and, as Jared Cohen, president of Global Affairs and co-head of the Office of Applied Innovation at Goldman Sachs wrote earlier this month, “in the 2020s, everything is geopolitical.”

    As he outlines: “Each great power has a privileged position in the global economy, and they all face new risks and uncertain futures.” 

    He elaborates:

    “The United States is leaning more into its status as the holder of the world’s reserve currency, using the dollar and related payment systems to sanction adversaries and competitors. China is leveraging dependency on its position in supply chains. And Russia—with nowhere near the power of China or the U.S., but with more appetite for risk—has wielded energy to intimidate and coerce its neighbors and limit global support for Ukraine. There is no country or multilateral organization that has the capacity to arbitrate these tensions.”

    With the above-referenced events at the top of this decade and the accelerating global push towards net zero carbon emissions a new class of states have entered the spotlight in the global geopolitical realignment – the “geopolitical swing states,” and their role could grow exponentially in the coming years.

    Goldman Sachs’s Cohen defines a geopolitical swing state as “critical to the world economy and balance of power” but without “the capacity by themselves to drive the global agenda, at least for now.” He adds that “as long as the tensions between the U.S. and China continue to get worse, they will have outsized abilities to navigate geopolitical competition and take advantage of and influence it.” 

    According to Cohen, there are four – often overlapping — categories of geopolitical swing states:

    • Countries with a competitive advantage in a critical aspect of global supply chains;
    • Countries with a unique ability to make themselves attractive for nearshoring, offshoring, or friendshoring;
    • Countries with a disproportionate amount of capital and willingness to deploy it around the world in pursuit of strategic objectives; and
    • Countries with developed economies and leaders who have global visions that they pursue within certain constraints.

    As Cohen concludes, “[t]he rise of geopolitical swing states may balance the great powers and help stabilize the global order. Their interest-based decision-making could be a source of consistency in uncertain times. Or their newfound prominence may increase global instability by putting more actors and variables in play. But even if today’s world is not yet multipolar, a rising group of countries recognize that they can determine the course of world events. Those geopolitical swing states are aware that their power may be unsustainable, or event fleeting and they are determined to take advantage of the current window of opportunity.”

    While the rise of the geopolitical swing states has business implications for multinational businesses and investors, these trendlines are have real-world implications for U.S. stakeholders from a policy perspective, and, in the critical mineral resource realm, underscore the importance of a comprehensive all-of-the-above approach to securing critical mineral resource supply chains.

    As Cohen closes:

    “For years, geopolitics mattered more to certain industries than others. Now they matter to everyone.”

    The sooner U.S. policy stakeholders realize this and pursue a comprehensive “soup-to-nuts” approach that embraces nearshoring, offshoring, and friendshoring, while also focusing on bolstering the domestic critical minerals framework, the better.

  • The Pitfalls of Decoupling – A Look at Europe’s REE Supply Chain Push

    The coronavirus pandemic and associated supply shocks, surging demand for critical minerals against the backdrop of an accelerating global push to net zero carbon emissions, as well as rising geopolitical tensions on the heels of Russia’s invasion of Ukraine and the looming tech war between China and the West have catapulted the issue of securing critical mineral supply chains to top of policy agendas around the globe.

    Concerns over China’s dominance over a large majority of the key critical mineral value chains has spurred efforts to decouple supply chains from China all over the globe.

    Followers of ARPN are aware of U.S. efforts which include the invocation of the Defense Production Act for several critical minerals, the passage of the Inflation Reduction Act and partnership agreements with key allies as well as public-private partnership to bolster domestic critical mineral supply chains.

    In Europe, the January 2023 announcement of the discovery of one of the largest rare earth elements (REE) deposits in Europe in the Kiruna mine located Sweden’s Lapland region was hailed by some as the advent of a new dawn for European resource policy, and European Union stakeholders hope that the recently released Critical Raw Materials Act, if passed, will jump start the reshoring process and “de-risk” the regional bloc’s reliance on China by streamlining the permitting process for raw materials projects and allow for selected “Strategic Projects” to benefit from support for access to financing and shorter permitting timelines.

    However, as Luke Patey outlines in a piece on the European REE supply chain push for the China-focused online magazine The Wire, the process of “decoupling” is fraught with more significant real-world challenges than some would have thought considering the complexity of critical mineral supply chains, and especially REE supply chains.

    For all the upbeat coverage of the Kiruna mine’s new deposit, Patey points to observers in the industry who are more cautious noting that China has “invested tens, if not, hundreds of billions of dollars in research and production to build up its industry over many years,” and cautioning that finding the REE deposits is “just step one.”

    As he writes, “[t]he EU now faces the meticulous task of ticking off all nodes of the supply chain to turn its green aspirations into an industrial reality” – from mine to manufacturing – and the midstream steps of building out processing capacity, metallization and magnet making are all “steps that the EU is sorely lacking in.”

    A visual of the geographical concentration of the REE permanent magnets value chain and final applications developed by the Center for European Policy Studies (CEPS) and modified by The Wire tells the story of China’s dominance:

    Image 4-27-23 at 11.40 AM

    Ultimately, Patey says:

    “Reshoring, in other words, is more than just reclaiming the anchor of the supply chain. For Europe — and the U.S. — to succeed in their new critical mineral ambitions, they will need to build out links far beyond the mine.” 

    He adds that while these efforts are underway “[t]he elephant in the room is that, even if they all succeed, doing all these steps on European soil does not automatically make them competitive with Chinese suppliers — both on price and on tech know-how.”

    Meanwhile, efforts to build mine to manufacturing supply chains for critical minerals, and especially REEs, continue to run into the “not in my backyard” challenge — an issue that continues to permeate policy discussions on this side of the Atlantic as well. As Patey phrases it, “the rare earths supply chain blends together not only challenges of national security and industrial competitiveness, but also economic and ecological welfare,” and while the newly released Critical Raw Materials Act intends to address these challenges, critical mineral extraction still faces local resistance in many parts of the regional bloc.

    It is a daunting challenge; however, it is one that stakeholders – here, across the Atlantic, or elsewhere – have to tackle comprehensively and swiftly.  China has already demonstrated its willingness to play politics with its resource leverage – and, as ARPN recently outlined, is gearing up to do it again as the weaponization of trade is back on the menu in U.S.-Chinese relations.

  • A New Critical Minerals World Order? — A Look at the Post-Cold War Realignment in the Wake of Covid, War in Ukraine and Geopolitical and Economic Tension

    This week, world leaders are gathered in Davos, Switzerland, for the World Economic Forum Annual Meeting. They are facing, as the New York Times’s Roger Cohen (NYT) titled his reporting on the meeting, a “New World Order.”   Leaders must “pivot to the new reality provoked by the Covid-19 pandemic, the war in Ukraine, the growth of extreme inequalities [...]
  • 2023 – Trend Lines and Breaking Points – It’s Time to Buckle Up (Especially in the EV Space)

    Happy New Year! For most of us, the first week of January means it’s time to go back to the grind after an extended period of family time, food coma, rest and – hypothetically, at least — reflection.  It also means trying shake the brain fog and mental rust that has settled in order to dive [...]
  • 2022 – ARPN’s YEAR IN REVIEW

      2022 surely was as fast-paced a year as they come. Didn’t we just throw overboard our New Year’s Resolutions?  We blinked, and it’s time for another review of what has happened in the past twelve months. So with no further ado, here is ARPN’s annual attempt to take stock of what has happened on the [...]
  • 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 Beyond the United States — Realizing the Extent of Resource Dependencies, Countries Take Steps to Bolster Domestic Supply Chains

    Against the backdrop of mounting geopolitical and ongoing supply chain challenges, countries are left grappling with the the mineral intensity of the sought-after global transition towards a net zero carbon emissions future. In their quest to untangle complex critical mineral supply chains and reduce over-reliance on adversary nations, the extent of which was first brought [...]
  • Independence Day 2022 – Are We Getting Closer to Critical Mineral Resource Independence? — As Stakes Rise, National Defense Stockpile Could Receive Boost Via NDAA

    It’s that time of the year again.   We’re gearing up to celebrate the men and women who have fought for, and continue to safeguard our freedoms.  It may not feel like it when the cost for the average July 4th cookout has drastically increased, but we have much to be thankful for, particularly at a time when geopolitical [...]
  • Beyond the Rare Earths and Battery Criticals – U.S. Armed Services Committee Seeks to Address Supply Chain Challenges for Antimony

    Underscoring the growing awareness that our nation’s overreliance on foreign supplies of critical minerals underpinning 21st century technology stretches beyond the much-discussed Rare Earths and battery criticals lithium, cobalt, nickel, graphite, and manganese, the U.S. House Committee on Armed Services has released draft legislation to address China’s stranglehold on the supply chain for antimony. Used [...]
  • From OPEC to OMEC — From Footnote to Public Policy?

    Against the backdrop of the accelerating global push towards net zero carbon emissions, the authors of a May 2021 KPMG study on “geographical and geopolitical constraints to the supply of resources critical to the energy transition” and the associated “call for a circular economy solution” titled the first chapter of their report “From OPEC to ‘OMEC’: the new global energy ecosystem.” In a [...]