These challenges, coupled with the accelerating global push towards a net zero carbon future, have set off a global scramble for critical minerals and for strategies on how to best secure their stable supply across all levels of the supply chain.

While the United States took several promising steps culminating in the release of the Biden Administration’s comprehensive 100 Day Supply Chain review, policy makers in Congress are currently struggling to find agreement on how to advance meaningful critical mineral resource policy reforms (and stop unhelpful provisions) as part of larger federal spending packages.

But policymaking, like nature, abhors a vacuum, so even as U.S. lawmakers try to resolve their differences on Capitol Hill, we are learning that both the European Union and Australia are taking their own steps to bolster critical mineral resource supply chains:

• The European Raw Materials Alliance (ERMA) earlier this month released its Action Plan to secure access to Rare Earth Elements for European industry. Entitled Rare Earth Magnets and Motors: A European Call for Action, the report outlines current and projected European demand for Rare Earth Elements and steps which should be taken to secure their supply.  The Alliance is working on a second Action Plan covering materials for energy storage and conversion, such as batteries, fuel cells, solar and hydrogen and other alternative energy storage and conversion systems.

• Meanwhile, Down Under, Australia’s Prime Minister Scott Morrison announced at the end of September that the country will set up a A$2 billion ($1.5 billion) loan facility to help finance critical mineral projects in the country and get them off the ground.

Of course, neither of these developments is bad new for the United States — especially since both the European Union and Australia are considered close allies, and, particularly the U.S. and Australia have recently reiterated their commitment to work together to secure critical material supply chains, both bilaterally and in the context of the Quad discussions.

However, both initiatives underscore the need for U.S. policymakers to put policy over politics and embrace a comprehensive “all of the above” critical mineral resource strategy, and take immediate steps to reduce our critical mineral import reliance and secure our supply chains from mining to materials processing.

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With several positive stage-setting steps taken in 2018, 2019 continued to bring a number of positive developments in the realm of mineral resource policy.  

However, while we appear to be headed in the right direction — towards an all-of-the-above approach in mineral resource policy as outlined in our 2019 recap — most of the resolutions we spelled out last January remain stubbornly valid 365 days later (though not without some tweaks or additions). 

Without further ado, here’s our updated list of suggested new year’s resolutions for resource policy stakeholders:

Continue the National Policy Conversation 

Against the backdrop of the specter of China playing the “rare earths card” setting off alarm bells and the intensifying the battery arms race, the Commerce Department released the long-awaited interagency Commerce Department report pursuant to Executive Order 13817, A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals released in June 2019 at a critical juncture.

There are indications that it may have served as a catalyst for policy makers across the political aisle to understand the urgency of securing mineral resource supply chains, and the need at long last for a more comprehensive approach to mineral resource policy. In an increasingly toxic political climate in Washington, D.C., it is important that policy makers work to ensure that partisanship does not impede the advancement of policy solutions because, as ARPN‘s Dan McGroarty noted during a recent panel discussion:

“We can’t admire the problem anymore. We don’t have the luxury of time.“

This past summer, just as it did in 2010, the Rare Earths issue has once again re-introduced non-fuel mineral resource issues into the mainstream political discourse.  This growing awareness of our nation‘s mineral resource woes should be harnessed — and stakeholders should work to change the sentiment that “neither [political] parties’ base sees critical minerals as such a dire threat.”

Read!

The above referenced Commerce report – coupled with studies released in 2018 (DoI‘s Critical Minerals List and DoD‘s Defense Industrial Base Review) – represents must-read material for all stakeholders involved to develop an understanding of U.S. mineral resource needs and associated supply challenges and should form the basis for any meaningful policy discussions in 2020.   USGS‘s 2017 “Critical Minerals of the United States” should also be required reading.  

We’ve said it before, but we’ll say it again: “ARPN knows how the Congress works; let’s hope Members delegate a key staffer or several to divvy up the USGS tome and really get familiar with it.”

Don‘t Forget the Gateway/Co-Product Interrelationship

2019 was a fast-paced year on the mineral resource front.   And with China‘s Rare Earths saber-rattling and the intensifying battery arms race revolving primarily around cobalt, lithium, graphite and nickel, it might be easier to focus attention on just a handful metals and minerals.   

However, we must continue to look at the bigger picture. Courtesy of the materials science revolution, Gateway metals – which include mainstay metals like Copper, Aluminum, Nickel, Tin and Zinc  – and their Co-Products are increasingly becoming the building blocks of 21st Century technology. Their interrelationship should be factored into any mineral resource policy discussion.

(Read our 2018 “Through the Gateway” report here.)

Enact Legislation

Some legislative progress was made in 2019 (see our recap), however Congress failed once more to pass key critical minerals provisions.  Congress should make an effort to finally pass these common sense provisions in 2020.

As we previously noted, “as important as Executive Orders are, they are not legislation, and history has shown that policy that is set and enacted by the stroke of the Presidential pen can just as easily be undone. Ultimately, for any real progress to grab hold and develop staying power, codification of any reforms yielded by these orders through Congressional action is highly desirable.” 

Again, it’s all about harnessing momentum.  As E&E’s Dylan Brown wrote discussing a recent U.S. House hearing on critical mineral issues: “They are split on solutions, but many Republicans and Democrats share national security concerns about growing reliance on foreign countries, in particular China, for a slew of minerals used in military and renewable energy technology.”

Factor Resource Policy Into Trade Policy – and Vice Versa

2018 brought the inter-relationship between trade and resource policy to the forefront with  U.S.-imposed tariffs on steel and aluminum imports from Canada and Mexico weighing on the negotiations surrounding the USMCA trade agreement between the United States, Canada and Mexico.  The tariffs were ultimately removed in 2019, but the agreement signed in December between Canada, Mexico and the United States may open the door to increased metal imports from China via Mexico as its amended rules of origin for automobiles include tighter definitions of what constitutes North American steel — but not of what constitutes North American aluminum.

In 2019, the inter-relationship between trade and resource policy became even clearer in the context of the U.S.-Chinese trade war.  The specter of China rare earths as an economic weapon has revealed that the current trade war between the U.S. and China is in fact one front in a larger tech war – a competition to see which country will dominate the 21st Century Technology Age, in which our “Achilles’ heel” is our over-reliance on foreign metals and minerals underpinning 21st Century technology and China’s dominance across the supply chains for many of them.

Against this backdrop, the U.S. has stepped up its cooperative efforts with close allies and reliable trading partners — a trend stakeholders should build on in the coming months.  The bottom line is that policy-making cannot occur in a vacuum.  Trade issues should inform mineral resource policy and vice versa. 

Once more, our 2020 resolutions come down to:  

Discuss, Read – and Act.  

And while there is some debate on whether 2020 represents the beginning of the new decade or not we have every hope that we‘ll continue on the positive trajectory towards a comprehensive mineral resource policy — one that, when we look back on 2020, will mark this year as beginning of our journey to American resource independence. 

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As the Financial Times reported earlier last week, the US state department and its Canadian and Australian counterparts “will work to help countries discover and understand their mineral resources. They will advise on management and governance  frameworks that will attract international investment and support good environmental and social policies.”

China – itself no stranger to playing politics with its position of strength in the resource realm – has long been jockeying for pole position in this area, for good reason. As Simon Moores, managing director of Benchmark Mineral Intelligence and member of the ARPN panel of experts stated earlier with respect to EV battery technology: “whoever controls these supply chains controls industrial power in the 21st century.”

The move for greater international cooperation comes as the threat of China playing the REE card looms larger than ever, as we discussed earlier last week.

While potentially at the brink of seeing REE supply disruptions for military equipment firms, the United States appears to have awaken to the realities of 21st Century resource policies. Earlier this month, the U.S. Department of Commerce released its Critical Minerals Strategy calling for “unprecedented action to ensure that the United States will not be cut off from these vital materials.”

The cooperative push by the U.S. State Department may be separate from that effort, but ties into the overall realization that the materials science revolution requires are more comprehensive, strategic and concerted approach to resource policy than that pursued by the United States to date. 

Meanwhile, Europe is also stepping up its mineral resource game, particularly in the EV realm.

Against this backdrop, U.S. action becomes all the more urgent.  It is not too late yet. Says Moores:

“There is no doubt that if the US acts now and invests wisely in partnerships, it can catch up, (…) [b]ut it really needs to act now.”

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According to the Global Times’s twitter feed, U.S. military equipment firms will likely face restrictions of Chinese Rare Earth supplies in the near future, as China’s economic planners will “study and roll out policies on rare earths as soon as possible.”    

The Global Times is an English language newspaper published by the Communist Party of China’s publication People’s Daily.

As followers of ARPN well know, China has a near-total supply monopoly on rare earths, which are key components of a wide range of applications ranging from household gadgets over hi-tech military equipment to renewable energy technology. 

In recent months, trade tensions between the United States and China have deepened leading observers to sound the alarm, because the lack of domestic REE sources has created a serious strategy vulnerability vis-à-vis our adversaries, as underscored by the 2010 decision by China to cut of REE exports to Japan. 

While some observers dismiss the looming threat of a Chinese REE supply embargo and cite a diversification of sources over the course of the past decade – including the Mountain Pass mine in California – which have reduced China’s supply monopoly to 77 percent, ARPN expert panel member and president and founder of public affairs firm J.A. Green & Company, points out via Twitter that 

“Citing the decrease to 71% Chinese production ignores other parts of the supply chain. We should break down reliance on China for #REE metal, alloy and magnets to be a useful statistic.”

He further cautions that “[t]o rely on ‘market forces’ to take care of the issue is dangerously naïve from a national security perspective. This is not a case of free trade, but rather Chinese market manipulation (as validated by the WTO ruling).”

Green concludes:

“Mountain Pass is a valuable resource, but is not a comprehensive solution. It is still reliant on the Chinese, it does not move past the concentrate phase of the supply chain, and is lacking in heavy REEs.”

Thankfully, there are indications that our policy makers appear to awaken to the seriousness of the situation, and the just-released critical minerals strategy report by the U.S. Department of Commerce acknowledges that “If China or Russia were to stop exports to the United States and its allies for a prolonged period — similar to China’s rare earths embargo in 2010 — an extended supply disruption could cause significant shocks throughout U.S. and foreign critical mineral supply chains.”

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You can watch the segment on the CBS website, which also features a written transcript.

There is hope that the renewed focus on rare earths will help generate momentum for long overdue reforms in the critical minerals realm, because, as followers of ARPN well know, REEs really only represent the tip of the ice berg when it comes to our nation’s – largely home-grown – non-fuel mineral resource woes. As ARPN’s McGroarty recently argued when interviewed for a story in the Daily Caller:

“The irony, and that is an understatement, is that the U.S. has rare earth deposits capable of meeting national security needs, and ending the reliance on China. With China saber-rattling on the rare earths, this could be the time for a strong U.S. response.”

Michael Stumo, Chief executive of the Coalition for a Prosperous America, agrees. Writing for the Dallas Morning News he says:

“It’s a troubling situation. But such alarming news could finally motivate Washington to rectify a longstanding problem — America’s growing dependence on imported metals and minerals.

It may all sound a bit obscure, but these resources provide the building blocks for everything from electric motors to medical equipment. And the Commerce Department just warned that the United States has become “heavily dependent” on foreign sources for 31 of the 35 minerals designated as “critical” by the Department of the Interior. And some of the minerals considered critical by the Department of Defense are available only overseas.”

The bottom line is clear:

“If U.S. manufacturers are to supply consumers with American-made products, they’ll need more timely access to reliable mineral sources. Washington urgently needs to update rules and incentives for faster, more responsible, and more innovative extraction of mineral resources that benefit domestic workers, companies and national security.”

The post CBS’s 60 Minutes Airs Updated Rare Earths Segment Featuring ARPN’s McGroarty appeared first on American Resources Policy Network.

The report, which, according to the agency’s official announcement, “contains a government-wide action plan, including recommendations to advance research and development efforts, increase domestic activity across the supply chain, streamline permitting, and grow the American critical minerals workforce,” comes at a critical juncture in time. 

Only hours before the Commerce Department report release, China’s National Development and Reform Commission (NDRC) had announced it is studying proposals to impose export controls on rare earth elements to “protect and better use such ‘strategic resource.’” 

The recent escalation of U.S.-Chinese trade tensions, along with growing concerns over mineral resource supply chains for the EV and energy storage sectors are shining a light on the United States’ over-reliance on foreign sources for our critical mineral needs – which Sen. Lisa Murkowski (R-Ak) has called our nation’s “Achilles heel.”

Important first steps towards a comprehensive mineral resource strategy, which our country has been lacking, were made with Executive Order 13817, A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals, in December of 2017, and the release of a list of 35 metals and minerals deemed critical from an economic and national security perspective, but most subsequent legislative efforts to reduce our foreign mineral dependencies faltered in 2018. 

Says Secretary of Commerce Wilbur Ross on the release of the new report:

“These critical minerals are often overlooked but modern life without them would be impossible. Through the recommendations detailed in this report, the Federal government will take unprecedented action to ensure that the United States will not be cut off from these vital materials.”

Here’s hoping the report does not fall on deaf ears and helps generate new momentum to secure our nation’s critical mineral needs. 

The post Commerce Department Releases Long-Awaited Interagency Report on Critical Minerals appeared first on American Resources Policy Network.

Last week, the White House announced sanctions on Iranian metals, which represent the Tehran regime’s biggest source of export revenue aside from petroleum.  The sanctions on Iran’s iron, steel, aluminum and copper sectors represent the U.S. administration’s latest effort to pressure Tehran over its “funding and support for the proliferation of weapons of mass destruction, terrorist groups and networks, campaigns of regional aggression, and military expansion” in the Middle East.

Iran may – thankfully – not rank as a top supplier for U.S. domestic consumers of the targeted metals.  However, these latest developments should serve as another reminder that securing domestic supplies of mineral resources should be a top priority.

ARPN’s Dan McGroarty invoked Iran in his first testimony before Congress on behalf of ARPN in 2011:

“Now, to be sure, we live in a globalized economy, and indeed — if the U.S. were to simply stop mining copper today – there are known copper prospects in a number of countries. We might turn to Chile, Peru and the Philippines for increased copper supply. Then again, world demand might be met via development of known copper reserves in Russia, Angola, Afghanistan, DRC Congo, or China – including decisions taken in Beijing to exploit copper reserves in the Tibet Autonomous Region. And there is copper in Pakistan and Iran. With the exception of Pakistan — rated “Partly Free” — all of the latter group are rated “Not Free” in the current Freedom House index. So while the world copper market does offer choices, we may well find many of those choices unpalatable from a policy perspective.”

Removing obstacles to a greater degree of resource independence should be the order of the day, but while we’ve seen some incremental progress, efforts to make substantial changes to our nation’s mineral resource policy framework have in the past been largely derailed or put off.

“We cannot maintain our modern economy without a steady supply of metals and minerals. Those we do not possess here at home, we must source from other countries. But those we possess but choose not to produce perpetuate a needless foreign dependence – leverage that other nations may well use to America’s disadvantage.”

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His message  —  “Those who control these critical raw materials and those who possess the manufacturing and processing know how, will hold the balance of industrial power in the 21st century auto and energy storage industries” — must have resonated with stakeholders.

As Reuters reported over the weekend, U.S. government officials, including select members of Congress, representatives from the U.S. Department of State, Department of Energy, Department of the Interior, as well as the U.S. Geological Survey are looking to sit down with executives from automakers and lithium miners early next month “as part of a first-of-its-kind effort to launch a national electric vehicle supply chain strategy.”

Sources familiar with the effort told Reuters that Sen. Lisa Murkowski, chair of the Senate’s Energy and Natural Resources committee, will look to introduce “standalone legislation aimed at streamlining the permitting process for lithium and other mines,”and addressing other critical minerals issues, parts of which were included in previous broader energy legislation in prior Congresses but failed to garner consent in both chambers at the time. 

With China already dominating the EV supply chain, the stakes are high.  As Senator John Hoeven (R, North Dakota), told Reuters, the U.S. “need[s] to find ways to more efficiently develop our nation’s domestic critical mineral supply because these resources are vital to both our national security and our economy.” 

While underscoring the complexity of the situation, industry representatives see a great opportunity for the United States to enact policy changes that could “encourage development of a domestic supply chain to mine, process and supply lithium, nickel, cobalt and graphite for battery manufacturers and automakers,”— changes that, in the eyes of one mining executive provide “the perfect blueprint to make America great again.”

According to Reuters, the May meetings will include both workshops on financing and permitting issues, and one-on-one meetings between regulators and industry executives. 

This is encouraging news, which will hopefully be complemented by a renewed push to develop a broader critical minerals strategy, as outlined the 2017 presidential executive order on critical minerals.

The rest of the world will not wait for us, so the time to get off the starting block is now. 

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We’re not overly surprised, though, to see that there are no major changes compared to last year. The number of metals and minerals for which we are 100% import-dependent may have dropped slightly (from 21 to 18), but a closer look into the footnotes of our favorite chart reveals that for two of the minerals previously included in the 100% import-reliance category, Quartz Chrystal (Industrial) and Thallium USGS states that “not enough information is available to calculate the exact percentage of import dependence” this year. For the third mineral to drop out of the 100% import-reliance category, Yttrium, numbers have dropped to 95% with production in California’s Mountain Pass mine having restarted in the first quarter of 2018. That is a positive development, but hardly a seismic shift in domestic resource development.

The number of metals and minerals for which we are 50% or more than 50% import-dependent is still at 49, down one from 50 – but with the above-referenced caveat of lacking data for two materials – so it may in fact be higher than last year.

The fact of the matter is that U.S net import reliance remains too high, and has – with implications for our economy and national security. USGS’s comparing its net import reliance numbers with the Department of the Interior’s Critical Minerals List, released for the first time in 2017, underscores this:

14 of the 18 mineral commodities with 100% net import reliance were considered “critical” by DOI. 15 of the 30 remaining mineral commodities with imports greater than 50 percent of annual consumption were also reflected on DOI’s list. Aluminum, listed at exactly 50 percent import-reliance on the 2019 Mineral Commodity Summaries, also has “critical mineral” status as per DOI.

Hopefully these findings provide fresh impetus for mineral resource policy reform, for which we saw incremental progress in 2018 – but are still awaiting further steps, including the release of the — by now long-overdue — report by the Department of Commerce subsequent to the 2017 presidential executive order on critical minerals outlining a “broader strategy” and recommending specific policy steps to implement it.

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