American Resources Policy Network
Promoting the development of American mineral resources.
  • President Xi Jinping’s “Coronation” Adds Fuel to the Fire to Decouple Critical Mineral Supply Chains from China

    With pressures rising on critical mineral supply chains as nations rush to flesh out environmental initiatives before the COP27 climate change summit kicks off in Sharm El Sheikh next month, the stakes for the United States and its allies to “decouple” from adversary nations — in the new U.S. National Security Strategy, read:  China — may have gotten even higher with China’s Communist Party (CCP) confirming President Xi Jinping for another term in office this past Sunday.

    In what effectively amounted to a “coronation,” as the Wall Street Journal editorial board phrased it, the CCP’s move has effectively “confirm[ed] China’s combination of aggressive nationalism and Communist ideology that is the single biggest threat to world freedom.” 

    Mr. Xi’s confirmation to another term was hardly a surprise, but in his landmark speech addressing the CCP Congress, he emphasized the the need to increase China’s self-sufficiency in technology and supply chains, and reaffirmed China’s commitment to attaining control over Taiwan — a key point of contention in the country’s relations with the United States, which have already starkly deteriorated in recent years.  According to the Wall Street Journal, the “coronation” “all but guarantees an era of confrontation between China and the U.S.”

    Aware that “China has big footed a lot of the technology and supply chains that could end up making us vulnerable if we don’t develop our own supply chains,” as U.S. Secretary of Energy Jennifer Granholm phrased it earlier this summer, the United States and its partners have stepped up efforts to decouple from China.

    These may become all the more pressing in light of current fears, as Damon Kitney reports for The Australian, that China may seek to retaliate after the U.S. Department of Commerce announced sweeping limitations to semiconductor and chip-making equipment sales to Chinese customers this fall.

    Speaking to a private forum in Melbourne, earlier this month, Australia’s former Ambassador to the U.S. and federal Treasurer Joe Hockey told attendees:

    “In terms of critical minerals, my concern is – and there has started to be a few reports in the US suggesting this – is that after the midterm elections, and with a re-empowered (Chinese President) Xi Jinping, as of next year China will start to turn down the tap on the supply of critical minerals to the US and other places.”

    Followers of ARPN have long known that China is no stranger to playing politics with its near-total rare earths supply monopoly, and just last year, we saw the country threatening to limit rare earth shipments to U.S. defense contractors over U.S. arms sales to Taiwan.

    Thankfully, U.S. domestic efforts to bolster supply chains can be complemented with leveraging close cooperation with allied nations including Canada and Australia.

    Australia is ready to step up its rare earths game and challenge China in this segment.  As Phil Mercer writes for BBC News, Sydney“Australia, a superpower exporter of iron ore and coal with rich mining traditions believes it is well-placed to join the race to exploit minerals that provide critical parts for electric vehicles and wind turbines.” He cites John Coyne of the Australian Strategic Policy Institute, who — while warning that China will not easily surrender its dominance of the sector — says:

    “Australia has the world’s sixth-largest reserves of rare earth minerals. However, they remain largely untapped with only two mines producing them.  There is significant potential in the establishment of multi-ore mineral-processing hubs in Australia. After all, there is no point in creating supply chain resilience for [rare earth] ores if miners must still send them to China for processing.”

    Mercer points to the U.S. Defense Department’s deal with Australian miner Lynas Rare Earths, which has been contracted to construct a REE processing facility in the U.S..

    In the same vein,  the Canadian government has inked an agreement with Rio Tinto to jointly invest $737 million to modernize the company’s Sorel-Tracy, Quebec metals processing plant, with  Rio Tinto’ chief executive Jakob Stausholm warning of the “excesses of globalization” in critical mineral supply chains. The move is said to strengthen “North America’s first production capacity for titanium metal, a lightweight but strong material important to aerospace and defense groups such as Boeing and Lockheed Martin.” 

    Stateside, the U.S. Department of Energy has just announced the first round of funding under the 2021 bipartisan infrastructure act for projects aimed at “supercharging” U.S. manufacturing of batteries for electric vehicles and electric grid — another important step in the decoupling from adversaries like China.

    With a newly-emboldened Mr. Xi reportedly seeing the possibility of a showdown with the West as “increasingly likely”in the context of his goal to “restore China to what he believes is its rightful place as a global player and a peer of the U.S,” as the Wall Street Journal writes, these efforts could not be more urgent.

  • Pentagon Waiver for REE Magnets Used in F-35 Combat Jet Engines Underscores Critical Mineral Dependency Conundrum

    With the coronavirus pandemic and growing geopolitical tensions having shone a light on U.S. over-reliance on foreign sources across our nation’s critical mineral value chains and its implications for our national and economic security, domestic stakeholders have stepped up their efforts to decouple U.S. supply chains from reliance on our adversaries.

    While for “battery criticals” the most recent notable step was the passage of the Inflation Reduction Act (IRA) with its sourcing requirements for lithium, cobalt, graphite, nickel and manganese, measures addressing rare earth element supply chains included the invocation of Title III of the Defense Production Act for Rare Earth Elements and a DoD allocation of $35 million for a heavy rare earth separation and processing project in California.

    While these are important steps, real-life examples show just how deep our nation’s over-reliance really is:

    Earlier this fall, the Pentagon, as part of its “efforts to decouple U.S. defense companies’ sprawling global supply chains from China,” as the Wall Street Journal phrases it, said it had begun using artificial intelligence to analyze whether U.S. military contractors source aircraft parts, electronics and raw materials used in U.S. military equipment from China and/or other potential adversaries.

    Learning that engine parts for new F-35 combat jets made by Lockheed Martin Corp. contained magnets sourced from Honeywell International, Inc. with a cobalt samarium metal alloy produced in China — which constituted a violation of U.S. procurement laws — the Defense Department last month halted accepting new jets from the company.

    The company has since  been granted a waiver, and with it, the Pentagon will accept all aircraft under the contract.

    The waiver was granted because the “magnet does not transmit information or harm aircraft, and […] there are no security risks involved,” but Honeywell will have to work to find an alternative source for the metal alloy used in the F-35 engine parts.

    Meanwhile, analysts say that with the waiver allowing an alloy of Chinese origins to continue to be used in the manufacture of F-35 combat jets, “the US military has exposed its dependence on Chinese rare-earth products, and China can opt to limit the export of such strategic resources to safeguard its national security.”

    China, not surprisingly, is an interested observer in the U.S. supply chain travails.  As the Global Times reports, citing a manager of a Chinese state-owned rare earth enterprise in Ganzhou, East China’s Jiangxi province, with China having a leading edge in the middle-to downstream rare earth magnet production, the “U.S. attempt to remove China-origin alloy imports from military equipment is almost ‘a mission impossible.’ from both a short-term and long-term perspective.” According to unnamed manager, “China is the only country in the world that has developed the ability to extract samarium and cobalt rare-earth metals, which means the middle product samarium oxide is almost 100 percent made in Chinese factories. We also account for over 70 percent of the final product samarium-cobalt rare-earth magnet. How can Washington take out Chinese rare-earth products from its jets in such a scenario?“

    A similar dependency applies to China-made neodymium magnets.

    A Beijing-based military expert, Wei Dongxu, contacted by the Global Times argued that with the U.S. using the materials for military purposes, which could “harm China’s sovereignty, territorial integrity and development interests,” “China should consider applying more strict export controls on rare earth products.”

    The waiver referenced above is only the latest in a series of waivers granted by Pentagon officials under similar circumstances — all of which goes to show how difficult it is to untangle critical mineral supply chains.

    However, with geopolitical and trade tensions rising — both between the United States and China and generally on the global stage — and with China’s known penchant for using its advantage as leverage, there is no alternative to turbo-charging the effort to secure U.S. domestic supply chains for critical minerals across the board.

  • U.S. Senator Demands Information From Department of Energy over Potential Chinese Ties Relating to Nevada Mining Project

    As geopolitical tensions between China and the West are on the rise, and critical mineral supply chain pressures continue to mount against the backdrop of the accelerating green energy transition, U.S. Senator Tom Cotton (R-AR) sent a letter to U.S. Secretary of Energy Jennifer Granholm demanding information from her department regarding recent reports that the Department of [...]
  • Alaska Critical Minerals Conference: Stakeholders Welcome Progress Thus Far, Call for Federal Permitting Reform and More Predictability in the Mining Space

    Just as a new federal law – the Inflation Reduction Act of 2022 – may send a much-needed investment signal to the underdeveloped critical mineral supply chains for EVs and other 21st  century technologies, many of which are rife with underinvestment, political risk and poor governance – lawmakers and policy experts gathered for a two-day two-day conference hosted by the [...]
  • U.S. Army Brigadier General (ret.): Congress Has Opportunity to Make “Critically Important Leap Forward to Build the Secure, Responsible Industrial Base our Economy and National Security Needs”

    In a new piece for RealClearEnergy, John Adams, U.S. Army brigadier general (ret.), argues that the newly proposed Inflation Reduction Act, negotiated by Senators Chuck Schumer (D-NY) and Joe Manchin (D-WV) is not only the most ambitious climate bill in U.S. history, but also represents an opportunity to bolster our nation’s economic and national security.  General [...]
  • 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 [...]
  • 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 [...]
  • 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 [...]