mining

Throughout ARPN’s work, we have consistently highlighted the geopolitical dimension of mineral resource policy.  Where we source (or fail to source) our metals and minerals is an often forgotten – or ignored – factor, with implications for our domestic manufacturers, and, at times, even for our national security.

Case in point – and in keeping with our current focus – Scandium.  As we pointed out last week, the main producers for this co-product mineral, which is “ready to take off,” currently are China, Kazakhstan, Russia and Ukraine, none of which is among our strongest trading partners.

Russia is now stepping up its Scandium game. As reported by Platts, Russian Aluminum producer Rusal has just announced production of high purity (exceeding 99%) scandium oxide for the first time at its Urals smelter – an announcement following the launch of a pilot project for processing scandium concentrate into scandium oxide from red mud, a byproduct of alumina refining.  Target production — 96 kilograms per year; not quite 4 pounds per week — shows why Scandium is arguably the rarest of the rare earths.

The announcement ties into the overall context of Scandium’s growing potential, particularly in the context of the aluminum-scandium alloys we discussed last week.

Russian demand for Scandium has soared in recent years due to its use in various defense applications, including the 5^th generation fighter, as well as its modernized version, and may well increase as Russia researches Scandium usage in combat equipment.

Meanwhile, while some developers are studying the possibility of including co-product development of scandium into their portfolio, the U.S. at present does not produce any scandium, even though the Defense Logistic Agency in 2013 deemed the material “critical” from a national security perspective.

This year’s U.S. Presidential campaign has sucked up a lot of oxygen — which is about the only element mentioned by the major candidates, despite the fact that any discussion of manufacturing, technology or economic competitiveness is rooted in raw material access.  Perhaps after November, our policy makers will be able to focus their attention on our growing mineral resource dependencies, and devising policies that help American manufacturers gain access to critical materials – the way to which (case in point Scandium) often leads “through the Gateway.”

Aluminum is not only one of the most sustainable materials these days, it is also making headlines – most recently during the North American Leaders Summit, also dubbed “Three Amigos Summit” held at the end of June in Ottawa, Canada.  Invoking challenges associated with China’s trade policy, President Obama called for the North American countries to work together to “ensure a level playing field for the steel and aluminum industries here in North America.”

The stakes are high, and with demand on the rise for durable, lightweight and sustainable materials, the Aluminum industry’s contribution to the U.S. economy — and with that, to the renaissance of U.S. manufacturing — is significant.

And that significance is measurable.  According to an April 2016 study conducted by economic research firm John Dunham & Associates, the U.S. aluminum industry provides 161,000 direct jobs, and accounts for nearly 551,000 additional jobs created through multiplier effects. Expressed in dollar figures, that means the U.S. aluminum industry’s direct contribution to the U.S. economy has reached $75 billion. When accounting for induced impacts, that number shoots up to $186 billion — more than one percent of national GDP. The Aluminum Association has a great infographic on this:

While the U.S. is home to significant bauxite deposits, from which aluminum is sourced, we import a significant percentage of the aluminum consumed domestically.  Unlike with other metals and minerals, this represents a marked decrease in geopolitical risk, as most of our aluminum imports are sourced from one of our closest trading partners, Canada. In fact, in 2015, Canadian-sourced imports accounted for 65% of crude aluminum, 21% of semimanufactures, 64% of scrap, and 54% of total aluminum imports.

In other words, viewed in isolation and from the upstream end of the supply chain at the minesite, the U.S. is increasingly import-dependent for the aluminum it needs.  But in the context of an integrated North American supply chain between the two trading partners, a look at USGS’s 2014 Minerals Yearbook reveals that Canada is helping the U.S. close a 3.4 million ton domestic aluminum production shortfall by supplying more than 2.2 million tons of crude ingot and 227,000 tons of semifabricated aluminum.

The geopolitics of resource supply are complex and constantly changing.  Trade gives us a more complete picture — but the fundamental fact remains that in our tech-dependent era, manufacturing might is rooted in reliable resource supply.

After showcasing our first Gateway Metal, Copper, and its co-products, it’s time to move on to our next Gateway Metal as part of our “Through the Gateway” informational campaign. Chances are, you used it this past weekend, during and/or after your 4th of July barbecue.  It is being featured as a part of a massive art installation currently hosted by [...]

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An overhaul of the approvals process in Queensland, Australia will cut the time it takes to issue an exploration permit in half, according to the state’s government.  The change applies to exploration permits only, and government officials are very clear that a granted exploration permit is not a right to mine. Nonetheless, the new process represents [...]

In a recent op-ed for the Pueblo Chieftain, National Mining Association president and CEO Hal Quinn and Colorado Mining Association president Stuart Sanderson discuss the U.S. Administration’s recent decision to take more than 300,000 acres of federal public lands in six Western states, including Colorado, off limits for mineral exploration. Embedding it into the context [...]

At a time when the U.S. economy is still struggling, it is particularly troubling to see that real opportunities to foster job creation are being wasted by poor policy-making in Washington, DC. As Forbes reports, Caterpillar Inc.’s mining segment is facing severe pressure from a decline in capital spending from mining industries, owed in part [...]

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