American Resources Policy Network
Promoting the development of American mineral resources.
  • A New Critical Minerals World Order? — A Look at the Post-Cold War Realignment in the Wake of Covid, War in Ukraine and Geopolitical and Economic Tension

    This week, world leaders are gathered in Davos, Switzerland, for the World Economic Forum Annual Meeting. They are facing, as the New York Times’s Roger Cohen (NYT) titled his reporting on the meeting, a “New World Order.”  

    Leaders must “pivot to the new reality provoked by the Covid-19 pandemic, the war in Ukraine, the growth of extreme inequalities and aggressive Russian and Chinese autocracies,” writes the NYT.

    In the critical mineral realm, these recent events have served as a catalyst for the new “Great Game,” which the geopolitics of mineral resource supply had triggered and which had gained momentum with the adoption of the Paris agreement in 2015 which in turn had committed countries to significantly reduce greenhouse gas emissions and transition to renewables.

    Over the course of the last few months, awareness of the importance of securing critical mineral supply chains and decoupling form adversaries, i.e. China, continued to grow against the backdrop of an increasingly volatile geopolitical landscape and mounting environmental pressures.  While, as the New York Times suggests, “the shape of an alternative international system is unclear,” we are seeing first steps towards a realignment as nations around the world rethink and reorganize their critical mineral supply chains.  

    ARPN has discussed several developments involving the United States and key allies like Canada and Australia, but Asian nations, too, are taking steps to diversify their supply chains away from China, particularly in the rare earths (REE) space.

    In spite of having signed a deal with Vietnam on rare earth development after having experienced the ramifications of an over-reliance on Chinese minerals first hand with the 2010 rare earths standoff between China and Japan, Japan’s domestic rare earth production has remained limited to date, with more than two thirds of the country’s rare earth supplies coming from China.  With demand surging in the context of growing EV markets, Japan is looking to “curb excessive dependence on specific countries, carry forward next-generation semiconductor development and manufacturing bases, secure stable supply for critical goods including rare earth, and promote capital reinforcement of private enterprises with critical goods and technologies,” according to a government strategy paper cited by Qu4tro Strategies this month.

    To do so, Tokyo inked a critical mineral agreement with Australia in October of 2022 and Japan’s Organization for Metals and Energy Security (Jogmec) is working with private companies to take control of its holding in a joint venture to develop dysprosium-terbium heavy rare earths in Namibia.  Jogmec is also an investor in Australia-based Lynas Rare Earths’s latest push to increase its meaning capacity in Western Australia.

    Vietnam, not traditionally known as a global mining powerhouse, is looking to become a key player in the global REE supply chain.  While, as Qu4tro Strategies outlines, North Korea is believed to be home to the world’s largest rare earth deposits, Vietnam’s large REE reserves are more viable as an alternative to Chinese REEs, as North Korea’s political situation and economic sanctions prevent the country from becoming a link in the global supply chain.

    While exploration in Vietnam has so far been unable to tap into the country’s considerable mineral potential, that may be changing. As a fast-growing economy, Vietnam is attracting companies trying to find new regional bases as U.S.-Chinese trade tensions rise, and post-Covid supply chains remain strained.

    In recent months, several countries have entered into partnership agreements with bot the Vietnamese Government and private companies to establish “an integrated supply chain for rare earths and other critical minerals.”

    Qu4tro Strategies cites the December signing of an agreement between Vietnam and South Korea to jointly explore and develop core minerals including rare earths in Vietnam, as well as a partnership between Australia Strategic Minerals (ASM) and Vietnam Rare Earths for “long-term supply of rare earths to provide feedstock for ASM’s Korean Metals Plant.” 

    Trade between Canada and Vietnam is reported to increase under the Trans-Pacific Partnership free trade agreement, and the Canadian province of Saskatchewan is actively exploring the “potential for the countries to collaborate on green energy, including sustainable mining and rare earth elements.”

    The Middle East, traditionally known as a leader in the fossil fuel realm, could also emerge as a critical mineral player in a newly realigned world, particularly as nations like Saudi Arabia incentivize investment towards creating integrated value chains, with the country currently processing 145 exploration license applications sent in by foreign companies, according to a new report issued by the Future Minerals Forum in Collaboration with the Payne Institute for Public Policy Colorado School of Mines.

    Meanwhile, Africa’s resource richness is well known. As the Future Minerals Forum’s report outlines, trade tensions with China as well as Russia’s ongoing war have triggered many Western countries to turn to Africa for investment opportunities in critical mineral supply during 2022.

    Discussions between Minerals Security Partnership countries (see our post here) have begun involving African regions as targets for potential partnerships, and five countries — the DRC, Mozambique, Namibia, Tanzania and Zambia – have initiated conversations on development opportunities to “diversify and bolster critical mineral supply chains while lowering trade reliance with China and Russia” during the UN General Assembly conference in September 2022.  Deals made at the U.S.-Africa Leaders Summit, which included a commitment of over $150 million dollars into Zambia’s mining sector to develop copper and Cobalt, are a case in point.

    However, as the authors of the Future Minerals Forum’s report point out, of Africa, “the scale and pace of investment inflows will largely hinge on the restructuring of domestic governance and policy changes.”

    As leaders continue to deliberate on the new realities of the post-Cold War world order in Davos this week, we will continue our focus on the realignment underway in the minerals sector and will zero in on the West in our second post this week.

  • Winning the “Energy Battle of the Twenty-First Century” Will Take More Than “Myopic” Policy Approach

    Earlier this week, the Biden Administration unveiled a road map for reducing the transportation sector’s carbon emissions to net-zero by 2050.

    Two weeks into the new year, the green energy transition continues to gain steam.  However, as Morgan D. Bazilian of the Colorado School of Mines and Gregory Brew from the Jackson School of Global Affairs at Yale University argue in a new piece for Foreign Affairs, while this general trend represents

    “welcome and overdue progress, (…) implementing plans to reduce greenhouse gas emissions could be stymied in part by a material obstacle: the procurement of critical minerals such as lithium, cobalt, nickel, and copper that are essential to clean energy systems.” 

    As followers of ARPN well know, 2022 saw several important developments to boost domestic critical mineral supply chains.  (See our Year in Review post here.). And we can’t resist noting that copper – rightly referenced by Bazilian and Brew as an essential material for clean energy applications – is not officially a Critical Mineral, despite ARPN’s consistent case for copper’s criticality.

    In any case, with demand outpacing supply for many of the metals and minerals underpinning the pursuit of net zero carbon emissions, Bazilian and Brewer lament that “[t]he way the United States seems intent on obtaining these minerals (…) is myopic.”

    They argue that “[t]o win the energy battle of the twenty-first century, the United States must avoid repeating the policy mistakes of past eras and focus on increasing domestic production and advanced manufacturing at home, while establishing secure and resilient supply chains with allies—and even foes—abroad.”

    As Bazilian and Brewer outline, the level of supply production needed to implement plans to reduce emissions “does not yet exist. New mines will have to be dug, and processing and refining industrial complexes will need to be built—both exceedingly difficult to do with existing permitting rules. The existing facilities, moreover, are almost entirely outside the United States. The production of critical minerals is concentrated in a handful of countries. 

    Against the backdrop of heightened geopolitical competition, they say, “Washington should avoid the counterproductive strategies of the oil era and adopt a varied approach combining domestic policy options with a flexible foreign policy. The goal should be to build a secure position for itself and its allies, reduce dependence on Chinese supplies, and recognize the competitive environment without resorting to brute force or nationalistic tendencies.”

    Specifically, they suggest the United States should:

    • accelerate the development of its domestic critical mineral resources and streamline the mining permitting process to further expand mining capacity;
    • work with allies to develop supply chains for critical minerals;
    • and work with allies to regulate critical mineral markets to reduce volatility to encourage investment and prevent disruptions due to price spikes.

    To be sure, progress has been made on several fronts. As ARPN outlined in our 2022 recap, President Biden invoked the Defense Production Act to spur domestic resource development and Congress passed the Inflation Reduction Act in August, both of which have sent strong signals to investors and industry that the United States is serious about confronting the critical minerals supply chain challenge head-on.

    At the same time, as scholars at the Wilson Center’s Environmental Change and Security Center have pointed out“the Biden administration’s efforts to free up federal funds for domestic mining activities has highlighted the inherent conflict between accessing the minerals needed for climate action and the administration’s commitment to environmental and social justice.”

    Developments like the recent Biden administration halt on progress on the Ambler Road project in Alaska, which proponents say would unlock access to critical minerals and create new jobs, point to conflicting viewpoints between the President’s stated objectives and his Administration’s policy.

    Alaska Governor Mike Dunleavy lamented the Administration’s Ambler Mining District decision during a 2022 critical minerals summit held in Fairbanks, which we covered here:

    “This administration must speak with one voice. It wants critical minerals, or it doesn’t. It wants the lower energy prices, or it doesn’t.  It wants to create jobs in the U.S. or it doesn’t.  It wants to protect the environment or it doesn’t. It cares about human rights, or it doesn’t. (…) The disjointed federal permitting process doesn’t just hurt Alaskans (…), it hurts every industry, and every state. (…) 

    If we set ambitious goals for EVs or renewables without permitting the production of critical minerals here, those minerals will still be produced, they just won’t be produced in here in America or Alaska, they’ll be produced by child labor, potentially, they’ll be produced without environmental standards, potentially, they’ll be produced at the expense of the American worker, to the benefit, potentially, of our adversaries.”  

    The stakes are high, and the Wilson Center Environmental Change and Security Program believes that “Critical Minerals and Energy Security” will be one of the top three issues in the coming months as 2023 promises to be a “pivotal moment for U.S. foreign and domestic policy on critical minerals.”

    We are here for it, and ARPN will be documenting and analyzing the developments and decisions that will “determine national fortunes and human progress in decades ahead.”

  • 2023 – Trend Lines and Breaking Points – It’s Time to Buckle Up (Especially in the EV Space)

    Happy New Year! For most of us, the first week of January means it’s time to go back to the grind after an extended period of family time, food coma, rest and – hypothetically, at least — reflection.  It also means trying shake the brain fog and mental rust that has settled in order to dive [...]
  • Canada’s New Critical Mineral Investment Rules for State-Owned Entities Harden Already-Drawn “Geopolitical Battle-Lines in the Metals Sector”

    Within days of Canada outlining new investment stipulations for state-owned entities aimed at protecting the country’s critical minerals sector, the Canadian government last week told three Chinese resource companies to divest their interests in Canadian critical mineral firms. Basing the decision on “facts and evidence and on the advice of critical minerals subject matter experts, Canada’s [...]
  • Critical Minerals and the National Strategy for the Arctic Region

    We’re “on a highway to climate hell.” The picture UN Secretary General Antonio Gutierrez is painting of current efforts in the climate fight is – expectedly – bleak. As such, it is no surprise that nations have been doubling down on their efforts to reduce greenhouse gas emissions, and the Biden Administration is no exception. Followers of ARPN have [...]
  • As Clean Energy Adoption Reaches “Tipping Point,” the Challenge of Untangling Critical Mineral Supply Chains Looms Larger than Ever

    “Solar power, electric cars, grid-scale batteries, heat pumps—the world is crossing into a mass-adoption moment for green technologies,” writes Tom Randall for Bloomberg.  Citing Bloomberg research, he argues that “clean energy has a tipping point, and 87 countries have reached it.”  The mass-adoption of green technologies, as followers of ARPN well know, requires drastically increased amounts of critical [...]
  • DoL “List of Goods Produced By Child Labor or Forced Labor” Zeroes in on Lithium-Ion Batteries, Adding Pressures for Already Strained Material Supply Chains

    Pressures on already strained battery material supply chains are mounting, and not just due to geopolitical tensions and rising demand in the context of the green energy transition. The U.S. Department of Labor has included lithium-ion batteries into its “List of Goods Produced by Child Labor or Forced Labor” – a list of 158 goods from 77 [...]
  • Battery Show Panels Mull Options to Strengthen U.S. Battery Supply Chains in Wake of Inflation Reduction Act Passage

    As one of the longest running and biggest automobile shows in North America, the North American International Auto Show (NAIAS) — or the Detroit auto show, as it is known more colloquially — has traditionally been one of the key events for car makers every year.   This year, however, another concurrently held event taking place roughly 30 miles [...]
  • European Union to Step Up its Critical Minerals Game against the Backdrop of Surging Demand Forecasts

    The Russian invasion of Ukraine and subsequent additional supply chain challenges have prompted the European Union — already grappling with strained supply chains in the wake of the coronavirus pandemic — to step up its critical minerals game. During her State of the Union address on September 14, European Commission President Ursula Von der Leyen announced [...]
  • Europe’s Metal Sector CEOs Call for Fast and Comprehensive Action to Address “Existential Threat” to Industry Powering Energy Sector and Net Zero Carbon Transition

    As Europe’s already high energy prices continue to soar due to fallout of Russia’s invasion of Ukraine, and EU energy ministers are gearing up to meet this Friday for an emergency summit, the corporate leaders of Europe’s non-ferrous metals sector have sounded the alarm in an open letter warning that the industry that underpins the energy sector [...]