supply chains

The global push towards net zero carbon emissions against the backdrop of rising geopolitical tensions and associated supply chain challenges has undoubtedly directed stakeholder attention to the need to strengthen critical mineral supply chains.

However, as followers of ARPN well know, the challenges of detangling supply chains and decoupling from adversary nations, i.e. China, are immense, and warrant a comprehensive all-of-the-above approach to mineral resource security.

A recent policy event in Washington, DC has brought the focus back to an area that holds great promise for the U.S. as it seeks to re-shore its critical mineral supply chains: Alaska.

A two-day summit hosted las week by the Department of Energy Arctic Energy Office, the Wilson Center, Rand Corp. and the University of Alaska entitled “Critical Minerals in the Arctic: Forging the Path Forward” brought together state and federal policy leaders – including ARPN’s Dan McGroarty, who served as co-moderator of one of the non-public panels — to advance “policy recommendations for development of critical mineral resources in the Arctic, in the context of U.S. national security, energy, climate, and technology goals.” 

The event built upon an inaugural August 2022 conference entitled “Alaska’s Minerals: A Strategic National Imperative” hosted by the University of Alaska, U.S. Arctic Research Commission and the Wilson Center, which coincided with a USGS announcement that the state was slated to receive more than $6.75 million in funding for geologic mapping, airborne geophysical surveying, and geochemical sampling in support of critical mineral resource studies in the state.

The funding has merit.

As Brett Watson, assistant professor of applied and natural resource economics at the Institute of Social and Economic Research, University of Alaska, Anchorage, Steven Masterman, affiliate of University of Alaska, Fairbanks, and Erin Whitney, Director of the Arctic Energy office, U.S. Department of Energy wrote in a “read ahead document” for the event,

“Alaska’s complex geological history has led to formation of a wide array of mineral deposit types containing commodities many list as critical. Alaska either has, is, or could produce almost all of the commodities on the US Geological Survey’s 2022 list of critical minerals. Alaska is the largest producer of zinc in the nation, contains the nation’s largest graphite deposit, is the state with the only domestic tin resources and, has been a producer of critical minerals in times of national need, e.g. During WWII Alaska contributed tin, PGE’s, chrome, tungsten and antimony for the war effort. Most of the commodities produced to support the war effort have not been significantly produced since, and the resources remain in place, creating a ripe environment for meeting the nations need for these critical minerals.”

Keynoting the event’s second day, Alaskan U.S. Senator Lisa Murkowski cited China’s recent decision to impose export restrictions on gallium and germanium as a real time example of critical minerals really being our nation’s “Achilles Heel.”   While acknowledging that progress has been made – Murkowski cited the U.S. government’s Critical Minerals List and key pieces of federal legislation such as her American Mineral Security Act, the bipartisan infrastructure package, some “gentle” permitting reforms of which we need more, the Inflation Reduction Act and the Defense Production Act of 2022 — but acknowledged that all of these steps are merely a beginning, and that more must be done.

Chiefly among the things that need to be done, according to Murkowski, are more mapping, more permitting reform, “opening more valves of federal support,” and “maybe learn[ing] on the fly when it comes to processing and refining.” Perhaps equally important, she said, was turning the tide of public opinion, which too often is “agnostic or downright hostile to mining.”

Murkowski cited the example of natural graphite, for which the United States has long been 100% import dependent as one of the promising opportunities Alaska holds for reducing our overreliance via the Graphite Creek deposit owned by Graphite One, Inc., which USGS has deemed the largest U.S. graphite deposit and among the largest in the world.  With Alaska home to many critical minerals, the Senator called on stakeholders and the policy community to engage in more dialogue and devise ways in which federal policy could support and strengthen projects like Graphite One’s, because the issue of critical mineral resource security is “too key to Alaska’s future, it’s too key to our country’s future.” 

Here’s hoping that stakeholders are listening.

The Wilson Center provides publications related to the conference, as well as complete video streaming on its website and on its YouTube channel, and will make proceedings from the tabletop exercise and briefs from the working sessions publicly available once finalized. 

Against the backdrop of surging demand for critical minerals and mounting geopolitical pressures, countries all over the world have stepped up their involvement in the critical minerals sector as the green energy transition charges on.

Followers of ARPN are aware of rising resource nationalism in Latin and South America, parts of Asia, and now Africa (see our most recent coverage of the issue here).  While some of these developments can be chalked up to a historically penchant for resource nationalism, more recently, government involvement in the critical minerals sector is on the rise even in the Western world.

As ARPN outlined earlier, while modern Western democracies are typically hesitant to embrace more state intervention in the critical minerals sector, many believe that in order to succeed, the United States and its allies need to learn “how to stomach more state intervention [themselves].” 

While state involvement has taken different forms depending on the geographical region, type of government and prevailing political leanings in a given country, a general trend towards more government intervention in this field cannot be dismissed, prompting PHP Group Ltd. Chief Executive Officer Mike Henry to warn that some of these efforts could backfire, and in fact undermine the global push towards net zero carbon emissions.

Speaking at an industry conference in Brisbane, Australia, he told attendees that it was “‘understandable’ that nations were scrambling to secure domestic supply of the metals needed in renewable energy and electric vehicles, but warned against an excessively domestic focus and over-reliance on the ‘sugar hit’ of state-provided subsidies,” as Yahoo Finance reports.

Said Henry:

“Governments striving to secure their own critical mineral supplies must ensure they don’t undermine the outcome the world needs to achieve – where in fact a combination of pragmatic international cooperation and competition can jointly accelerate the energy transition,” 

Speaking specifically in reference to Australia’s just-released critical minerals strategy, which had left some disappointed as they had hoped for more subsidies, permitting reforms and additions to the country’s critical minerals list, he added:

“There’s a big movement underway in the U.S. right now towards permitting reform. Australia needs to do that,” and “[w]hat governments here – federal and state – should focus on are those things within their control to make investment fundamentally more attractive,” i.e. focus on better productivity and fiscal settings.

Henry’s comments should give policy stakeholders pause as they rush towards protectionism.

For a prudent all-of-the-above mineral resource policy to succeed, governments should avoid a heavy-handed approach and rather focus on providing well-structured frameworks conducive to unleashing their countries’ mineral potential and securing critical mineral supply chains without stifling the progress that stems from market innovation.

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