American Resources Policy Network
Promoting the development of American mineral resources.
  • Presidential Determination Invokes Title III of Defense Production Act to Encourage Domestic Production of Battery Criticals

    A confluence of factors — pandemic-induced supply chain shocks, increasing resource nationalism in various parts of the world, and Russia’s invasion of Ukraine extending into its second month — has completely altered the Post-Cold War geopolitical landscape and mineral resource security calculus.

    Responding to the resulting growing pressures on critical mineral supply chains and skyrocketing demand scenarios, U.S. President Joe Biden invoked the Defense Production Act (DPA) earlier today to encourage domestic production of the metals and minerals deemed critical for electric vehicle and large capacity batteries.

    In Presidential Determination No. 2022-1, President Biden determines, pursuant to section 303(a)(5) of the Act, that:

    -       “sustainable and responsible domestic mining, beneficiation, and value-added processing of strategic and critical materials for the production of large-capacity batteries for the automotive, e-mobility, and stationary storage sectors are essential to the national defense;

    -       without Presidential action under section 303 of the Act, United States industry cannot reasonably be expected to provide the capability for these needed industrial resources, materials, or critical technology items in a timely manner; and

    -       purchases, purchase commitments, or other action pursuant to section 303 of the Act are the most cost-effective, expedient, and practical alternative method for meeting the need.”

    The Presidential Determination instructs the Secretary of Defense to “create, maintain, protect, expand, or restore sustainable and responsible domestic production capabilities of such strategic and critical materials by supporting feasibility studies for mature mining, beneficiation, and value-added processing projects; by-product and co-product production at existing mining, mine waste reclamation, and other industrial facilities; mining, beneficiation, and value-added processing modernization to increase productivity, environmental sustainability, and workforce safety; and any other such activities authorized under section 303(a)(1) of the Act.”

    Acknowledging that “action to expand the domestic production capabilities for such strategic and critical materials is necessary to avert an industrial resource or critical technology item shortfall that would severely impair the national defense capability” the Presidential Determination further waives “the requirements of section 303(a)(1)–(a)(6) of the Act for the purpose of expanding the sustainable and responsible domestic mining, beneficiation, and value-added processing of strategic and critical materials necessary for the production of large-capacity batteries for the automotive, e-mobility, and stationary storage sectors.”

    According to a White House fact sheet released only hours before the Presidential Determination was made public, the President “is also reviewing potential further uses of DPA – in addition to minerals and materials – to secure safer, cleaner, and more resilient energy for America.”

    Earlier this month, U.S. Senators Lisa Murkowski (R-AK), Joe Manchin (D-WV), James Risch (R-ID), and Bill Cassidy (R-LA) had sent a letter to President Biden urging  him to take congressional and Administration efforts to bolster mineral supply chains one step further and to “invoke the Defense Production Act (DPA) to accelerate domestic production of lithium-ion battery materials, in particular graphite, manganese, cobalt, nickel, and lithium.”

    “Allowing our foreign mineral dependence to persist is a growing threat to U.S. national security, and we need to take every step to address it. The 100-day report acknowledges the ‘powerful tool’ the DPA has been to expand production of supplies needed to combat COVID-19, as well as the potential the DPA could have to ‘support investment in other critical sectors and enable industry and government to collaborate more effectively,’” the Senators said in their letter, adding that  “[t]he time is now to grow, support, and encourage investment in the domestic production of graphite, manganese, cobalt, lithium, nickel, and other critical minerals to ensure we support our national security, and to fulfill our need for lithium-ion batteries – both for consumers and for the Department of Defense.”

    It seems President Biden was ready to take that step.

    According to Bloomberg News, the addition of metals and minerals like lithium, nickel, graphite, cobalt and manganese to the list of items covered by the 1950 Defense Production Act affords mining companies access to $750 million under the Act’s Title III fund.

    The National Mining Association’s President and Chief Executive Rich Nolan welcomed the move, stating that “[t]he minerals supply chain that will drive the electrification of our transportation sector and the energy transition is not only at risk from a perilous and growing import dependence, but the approaching minerals demand wave is set to strain every sector of the economy and requires an urgency in action from government and industry never before seen.”

    Nolan told the Washington Post in anticipation of the Presidential Determination that the United States needs new mines and mineral processing plants: “What we need is policy to ensure we can produce them and build the secure, reliable supply chains we know we must have.” 

    Watch the press conference announcing the Presidential Determination here.
    And for the full text of Presidential Determination No. 2022-1 click here.

    ARPN will be back with additional analysis as we work through the DPA action.

  • China’s Play for Lithium in Canada — A Stronger Focus on National Security in Critical Mineral Resource Policy Warranted

    As the United States continues to look for ways to shore up and secure its critical mineral supply chains, a business deal involving China is raising eyebrows for some of our neighbors to the North.

    An October 2021 announcement by Chinese state-owned enterprise Zijin Mining Group Co. Ltd that it would purchase Canadian lithium miner Neo Lithium had opened up a 45-day window during which the Canadian federal government could have conducted a review of the takeover.

    The Canadian Conservative Party is now lamenting that no such review took place. Citing national security concerns, Conservative members of parliament Michelle Rempel Garner and Ed Fast said in a publicly released statement:

    Canada is falling behind in developing its critical mineral industries, and allowing the foreign takeover of companies like Neo Lithium without due diligence could further weaken our strategic interest in developing a domestic supply of lithium and other critical minerals.(…)

    Canada’s Conservatives are calling on the Liberals to immediately conduct a national security review of the takeover under the Investment Canada Act and to explain why a national security review was not completed in the first place.”

    Foreign takeovers of Canadian companies are subject to an initial security screening by the government.  If the initial screening concludes that the takeover constituted a threat to Canada’s national security, it would trigger a more formal review under Section 25.3 of the Investment Canada Act, and the deal could be blocked.

    While Neo Lithium’s project — the 3Q mine — is located in Argentina, it could play an important role in supplying Canada’s lithium needs at a time when the country is not extracting the material within its own borders.

    The development ties into the broader North American context of the United States and Canada having formalized a joint action plan on critical minerals in 2020 which included commitments by both governments to strengthen North American battery material supply chains against the backdrop of China’s ever-tightening grip on global supplies.

    A stronger focus on critical mineral resource security through the prism of national security is certainly warranted, not just for our Canadian friends, but also from a U.S. perspective.

    As Tsvetana Paraskova notes in a piece for Oilprice.com“while the Administration was reviewing supply chain issues and vulnerabilities to its demand for critical minerals, China is moving in on Africa and South America to strike alliances and lend money to mineral resource-rich African countries, while Russia is thought to be providing shadow ‘security services’ in some African nations with a mercenary organization with links to the Kremlin.” 

    Followers of ARPN know all too well that as the green energy transition accelerates, we will be facing significant critical mineral resource shortfalls.  For the United States (and for our close allies), the time to act is now. As Paraskova concludes, “(…) otherwise, America’s clean energy goals and hi-tech and automotive supply chains could depend on China.” 

  • ARPN’s 2021 Word of the Year: Supply Chain

    ARPN’s Year in Review —   a Last Look Back at the United States’ Critical Mineral Resource Challenge in 2021 Well, two words, for the sticklers.  Merriam Webster may have gone with “vaccine,” but for ARPN, there was really no doubt. As one article put it, “2021 is the year ‘supply chain’ went from jargon to [...]
  • ARPN Expert Panel Member: Create Framework to “Insulate Domestic Producers from Market Manipulation While Fostering Innovation” in Effort to Decouple From China

    In a recent piece for RealClearDefense Jeffery A. Green, president and founder of J.A. Green & Company, and member of the ARPN panel of experts, outlines a set of four main lines of efforts policy makers should focus on as they develop policy recommendations based on a recent executive order and House task force set [...]
  • China’s Saber-Rattling over Rare Earths Card Getting Louder

    After months of rumblings, it appears that China is gearing up to play its “rare earths card” again. Citing people involved in a government consultation, the Financial Times reports that Beijing is gauging exactly how badly companies in the United States and Europe, including U.S. defense contractors, would be affected by plans to restrict exports [...]
  • National Security Expert Calls for Securing Domestic Mineral Resource Supply Chains: “Crisis Borne from China’s Predation and Our Own Neglect No Longer Theoretical”

    After decades of watching “China become the world’s workshop as it snatches up industries, jobs and critical supply chains, [i]t’s time to restructure the global economy in our favor, and that means decisive action to shore up our most important industries,” writes Brig. Gen. John Adams (U.S. Army, retired), president of national security consulting firm Guardian Six [...]
  • McGroarty: Tech Wars Heat Up – Administration Invokes Defense Production Act to Spur Domestic REE Development

    ARPN’s Dan McGroarty discusses President Trump’s decision to invoke the Defense Production Act to spur domestic REE development for The Economic Standard: The Tech Wars Heat Up: U.S. Makes National Security Declarations to Spur Rare Earths Development Forget the trade war – the tech war is heating up.  After weeks of Chinese threats that it [...]
  • Moving Beyond the Report Stage? – Specter of REE Supply Disruptions Prompts Congressional Action on Critical Minerals

    The U.S. and China have resumed trade talks after last month’s meeting between U.S. President Trump and Chinese President Xi Jinping on the sidelines of the G-20 summit in Osaka broke a deadlock — but key issues remain far from settled. Against the backdrop of both sides preparing for a protracted battle, Jeff Green, president [...]
  • Section 232 Tariffs on Aluminum and Steel on the Way Out?

    News headlines these days are full of doom and gloom. As the Guardian writes, “whether or not the world really is getting worse, the nature of news will interact with the nature of cognition to make us think that it is.” Against this backdrop, it’s nice to see a little – albeit cautious – optimism [...]
  • Metals in the Spotlight – Aluminum and the Intersection between Resource Policy and Trade

    While specialty and tech metals like the Rare Earths and Lithium continue to dominate the news cycles, there is a mainstay metal that has – for good reason – been making headlines as well: Aluminum.  Bloomberg recently even argued that “Aluminum Is the Market to Watch Closely in 2019.”  Included in the 2018 list of 35 [...]