-->
American Resources Policy Network
Promoting the development of American mineral resources.
  • resource dependence

  • HOMEPAGE >> BLOG >> resource dependence
  • “Supply Chain” Begins With “Supply:” Department of Commerce 100-Day Report Chapter on Complex Semiconductor Supply Chain

    Current news coverage may have you believe that when it comes to critical minerals, all we’re talking about is Rare Earths and battery tech metals, such as Lithium, Cobalt, Manganese, Nickel and Graphite. However, while certainly extremely important for 21st Century technology, these materials and the sectors in which they find key applications only represent the tip of the proverbial iceberg when it comes to securing critical mineral supply chains.

    In its 100 Day Supply Chain Report, the Biden Administration dedicated an entire chapter to the supply chains of semiconductors — for good reason.

    Semiconductors have become indispensable components for a broad range of electronic devices, and their importance cannot be overstated. The Department of Commerce-led chapter in the report cites the transformational impact of the colloquial computer chip as the launching point of its review:

    “Semiconductors are the material basis for integrated circuits that are essential to modern day life and are used by the typical consumer on a daily, if not hourly, basis. The semiconductor-based integrated circuit is the ‘DNA’ of technology and has transformed essentially all segments of the economy, from agriculture and transportation to healthcare, telecommunications, and the Internet.

    (…)

    In addition to the central role they play in the U.S. economy, semiconductors are essential to national security. Semiconductors enable the development and fielding of advanced weapons systems and control the operation of the nation’s critical infrastructure. They are fundamental to the operation of virtually every military system, including communications and navigations systems and complex weapons systems such as those found in the F-35 Joint Strike Fighter. They are key to the ‘must-win’ technologies of the future, including artificial intelligence and 5G, which will be essential to achieving the goal of a ‘dynamic, inclusive and innovative national economy’ identified as a critical American advantage in the March 2021 Interim National Security Strategic Guidance.”

    According to the report, the supply chains for these highly specialized hi-tech components are extremely complex, as the manufacturing of semiconductors “requires hundreds of essential inputs, many of which are raw materials, chemicals, and gases. These materials have their own complex supply chains, and likely contain hidden choke points that could disrupt production.”

    The manufacturing of semiconductors begins with polysilicon, for which the U.S. currently has some production capacity. However, according to the Department of Commerce, “U.S. technological leadership and production of semiconductor-grade polysilicon is at risk due to China’s actions to increase its dominance of both the semiconductor and solar supply chains.” That risk is further heightened now that China is under U.S. import sanctions for producing polysilicon using forced labor in the Province of Xinjiang. U.S. companies importing Chinese products containing polysilicon from Xinjiang risk having those products impounded at American ports by U.S. Customs and Border Protection.

    Two other key semiconductor materials are Gallium and Indium — for both of which the United States is 100% import reliant, both of which made the 2018 official U.S. Critical Minerals List released by the Department of the Interior, and both of which are primarily sourced from China.

    Due to the extremely complex and geographically dispersed nature of the semiconductor supply chain (which results in the typical semiconductor production process spanning multiple countries and products crossing international borders up to 70 times according to the Department of Commerce), there are many access points for supply chain vulnerabilities along the way.

    To address the semiconductor supply chain challenge, the Biden Administration seeks to “bolster its partnership with the private sector in domestic semiconductor manufacturing and R&D,” and “strengthen engagement with allies and partners to promote fair semiconductor chip allocations, increase production, and promote increased investment.”

    However, let’s be clear: As ARPN’s Daniel McGroarty pointed out last year against the backdrop of excitement over the recent announcement of Arizona as the site for Taiwan Semiconductor’s new next-gen semiconductor factory to manufacture their new 5-nanometer (5nm) chips: “the first word in supply chain is ‘supply.’”

    As the Biden Administration begins to tackle the complex semiconductor supply chain challenge in the context of its “all of the above” approach to decouple from adversary nations, it must begin at the beginning.

    Thankfully, the U.S. is not only in the fortunate position to have known resources for both Gallium and Indium (in Texas and Alaska, respectively), both metals can also be “unlocked” in the “co-product” development of their Gateway Metals Aluminum (for Gallium) and Zinc and Tin (Indium) — another reason stakeholders should focus more on the inter-relationship between Gateway Metals and the critical co-products they unlock.

    Share
  • If Copper is the New Oil, We Need to Prioritize Its Development

    A Bank of America commodity strategist warns that the world may be “running out of copper” amid widening supply and demand deficits. Suggesting that prices could hit $20,000 per metric ton by 2025, the strategist’s note called out that inventories are currently at levels seen 15 years ago, and that existing stocks may cover just over three weeks of demand.

    A recent CNBC story on the issue outlines how demand for traditional mainstay metals like copper is also surging because of its “vital role in a number of rapidly growing industrial sectors, such as electric vehicle batteries and semiconductor wiring.”

    CNBC cites David Neuhauser, founder and managing director of U.S. hedge fund Livermore Partners, who, in light of growing investment in electrification as countries move towards greener infrastructure believes that “copper is the new oil,” and predicts that the metal will look “tremendous for the next five to 10 years.”

    As we’ve learned the hard way over the course of the coronavirus pandemic, with increased demand for critical minerals — which is in large part driven by a global push for carbon neutrality — come increased supply challenges.

    These challenges are compounded by the inherent irony of mineral resource supply: Proponents of a green energy shift for the United States tend to vehemently oppose the domestic development of the very metals and minerals that make that shift possible.

    Laura Skaer, a member of the board of directors of the Women’s Mining Coalition and former director of the American Exploration & Mining Association, outlines a case in point for copper in a recent piece for Morning Consult.

    Skaer points to recently-introduced federal legislation that would stop the development of a big copper mine near Superior, Arizona. The mine could supply a quarter of our nation’s copper demand and has strong support in the community, as Skaer writes. The federal bill, however, would, in Skaer’s view “close the door on a project that will benefit Arizona and the entire nation, expose the federal government to substantial takings claims, and send a signal to other companies that America is closed for business when it comes to mining.”

    Concludes Skaer:

    “The United States can become a domestic minerals supply-chain powerhouse — but not if Congress withdraws mining permission from areas where mineral development is a vital source of jobs and tax revenue.

    If we want to have a serious conversation about infrastructure and clean energy, we have to start at the beginning of the supply chain by boosting our domestic supply of copper. The inescapable fact is that mines can only be located in the few places where economically viable mineral deposits have been formed and discovered. Arizona’s Copper Triangle is one of those rare places.

    For the sake of the clean energy future so many Americans want and the national security and the economic investment we need, the Resolution Copper project must not be delayed any more.”

    If Copper is the new oil, we should act accordingly.

    To read Skaer’s full piece, click here, and to learn more about the Women’s Mining Coalition, click here.

    Share
  • Post-Petro Geopolitics in the Tech Metals Age

    The sands of geopolitics are shifting. As Anumita Roychowdhury, Snigdha Das, Moushumi Mohanty, Shubham Srivastava outline in a multipart series for India’s Down to Earth magazine, global competition, cooperation and conflicts are less about arms and oil, and more about critical technologies as the world is experiencing a “Fourth Industrial Revolution, an age of advanced [...]
  • New IEA Report Underscores Material Inputs of Net Zero Energy System By 2050, Indicates Support for “All of the Above” Approach to Mineral Resource Security

    Touting his infrastructure package at Ford’s electric vehicle plant in Michigan last week, President Joe Biden declared: “The future of the auto industry is Dearborn,electric. There’s no turning back.”  Against the backdrop of the Biden Administration’s push for a low carbon energy future and a global push to reduce greenhouse gases, the International Energy Agency (IEA) has [...]
  • Panelists at Virtual Forum Agree on Need for Holistic “All of The Above” Approach to Critical Mineral Resource Policy

    During a virtual congressional policy forum on critical minerals hosted by House Committee on Natural Resources Republicans earlier this week, experts agreed that the United States must adopt a holistic “all of the above” approach to critical mineral resource policy. Panelists at the event, which can be re-watched in its entirety here, included: Daniel McGroarty, [...]
  • ARPN’s McGroarty at Virtual Forum: “Apply an ‘All of the Above’ Approach to Critical Minerals — Both in Terms of Development and Federal Policy”

    Speaking at a virtual forum hosted by House Committee on Natural Resources Republicans on the role of critical minerals in geopolitics, renewable energy production and beyond earlier today, ARPN’s Daniel McGroarty called on policy stakeholder to apply the “all of the above” approach that helped reverse decades of American dependence on foreign oil to the [...]
  • Commentary: Fighting Global Climate Change Through Electrification is a Herculean Task

    In a new piece for Forbes, Jude Clemente, principal at JTC Energy Research Associates, LLC, outlines the size and scope of the ambitious climate goal of electrification to fight climate change, and discusses the underlying challenges associated with the shift. Clemente argues that the likely surge in electricity demand as the world seeks to decarbonize [...]
  • As Renewable Energy Push on Capitol Hill Intensifies, Inherent Irony of Green New Deal is Apparent

    As the Biden Administration intensifies its efforts to promote its ambitious renewable energy agenda, energy analyst David Blackmon recently took aim in a piece for Forbes at what we previously called the “Green New Deal’s inherent irony”: the fact that “the same green lobby that advocates for the ‘Green New Deal’ is perhaps the largest [...]
  • Mining Industry Expert: “A Serious Conversation About Infrastructure and Clean Energy Must Start at the Beginning of the Supply Chain. It’s Time to Boost Domestic Supply of Copper”

    As was to be expected, President Joe Biden used his State of the Union address to both chambers of Congress to tout his American Jobs Plan, which has been billed as comprehensive package to make the economy more productive through investments in infrastructure, education, work force development and fighting climate change. And while nobody can [...]
  • “Sustainably Greening the Future” Roundup – Mining and Advanced Materials Industries Harness Materials Science in Green Energy Shift

    The Biden Administration has shifted focus to its next major legislative priority in the context of the president’s “Build Back Better” agenda — a multi-trillion dollar jobs and infrastructure package. Billed as a plan to make the economy more productive through investments in infrastructure, education, work force development and fighting climate change, the package will [...]

Archives