Our mineral supply chain is a national security imperative
Following President Biden’s inauguration last January, anticipation grew around the administration’s efforts to strengthen industrial supply chains — measures that continue to have strategic implications for U.S. national security. With Washington beset by tribal politics and Americans growing frustrated by elected officials’ inability to advance shared interests, mineral supply chain vulnerabilities present an unusual opportunity for genuine bipartisanship.
I’m hardly alone in this thinking.
In February 2021, just five weeks after he took office, Biden issued a sweeping executive order calling for a whole-of-government approach to addressing vulnerabilities in U.S. supply chains resulting from threats to critical mineral supplies such as lithium, cobalt, copper, nickel and rare earth elements used to manufacture electric vehicles and green energy platforms, as well as other key supply chain concerns from semiconductors to pharmaceuticals.
This was followed in June by the release of a sobering 250-page report that outlined key findings derived from the reviews conducted under the executive order. The report made a compelling case that the U.S. should invest in targeted, mineral-specific strategies to increase extraction, work with international allies to expand global production by increasing access to supplies, and deploy the Defense Production Act to incentivize production up and down the critical materials supply chain. The report implied that these actions should be accomplished quickly.
It’s been refreshing to see the public debate since this time lead to an emerging bipartisan consensus on the urgent need to diversify access to technology metals.
But it’s still not enough.
It is widely acknowledged that to reach Paris Agreement goals, demand for certain key minerals will increase by up to 90 percent. Current production nevertheless lags far behind. For example, in order to meet the COP26 commitments by 2040, we would need to increase the production of lithium to 7 million metric tons annually, roughly 17 times more than lithium chemical production in 2021, according to Benchmark Minerals Intelligence.
Despite these realities, China currently refines 60 percent of global lithium supplies, 80 percent of the world’s cobalt, and 85 percent of rare earth elements. China has tilted the playing field to achieve this dominance with numerous state interventions, including favorable legislation and state-backed credit to a range of companies while enforcing little, if any, environmental, social and governance (ESG) standards. This makes it nearly impossible for Western mining firms to compete for opportunities.
Today, however, many in Washington have begun to recognize the sheer scale of support required for the private sector to increase access to and production of critical minerals, and they appear ready to act. Thankfully, there is an established track record of bipartisanship on the issue. Indeed, the Biden administration’s policies on critical minerals show continuity with the Trump administration’s 2017 federal strategy to diversify access to critical minerals, as well as the former president’s 2020 executive order calling on increases of domestic mining of rare earth elements.
With the passage of the $1.2 trillion infrastructure bill at the end of the summer, there was significant attention applied to the processing and supply chain of critical minerals. The bill includes $6 billion for battery materials processing and manufacturing projects, $140 million for a rare earth demonstration plant, and a few other research and development grants for good measure.
The bill takes stock of the excessive burden of permitting processes that hold back domestic critical minerals production and aims to streamline the environmental assessments and environmental impact statements required under the National Environmental Policy Act for critical minerals extraction on federal lands. The spending bill, however, does not include support for extraction projects.
And so, despite the momentum, more must be done. The U.S. (and Europe) must grapple with how to apply larger-scale industrial policies, and how to navigate the challenges posed by environmental opposition to mining projects. To be clear, the answer is not to sideline the concerns of any one group, but to take an inclusive approach by doing a better job communicating commitments to sustainability, environmental standards and labor rights that meet modern expectations.
Part of the infrastructure bill, for example, orders the U.S. Geological Survey to conduct a 10-year study of a “whole-of-mining” approach, instead of single commodities, exploring ways to capture and process mining waste tailings for rare earths inputs, which would reduce impact and diversify sourcing in one go.
One compelling bipartisan proposal — the Restoring Essential Energy and Security Holdings Onshore for Rare Earths (REEShore) Act – was introduced by Sens. Tom Cotton (R-Ark.) and Mark Kelly (D-Ariz.). Although focused more on rare earth metals supplies for defense technologies, the bill calls on the Department of Defense and Department of Interior to create a strategic reserve and to certify origin of these metals. This would create more demand and, in turn, require more support for extraction projects.
The U.S. International Development Finance Corporation’s $25 million investment in TechMet, a private investment company that produces metals pertinent to the production of electric vehicles (EVs), renewable energy systems, and energy storage in 2020 also generated considerable buzz. Still, it’s a drop in the ocean when compared with American demand.
Legislation being debated in Congress offers another glimmer of hope for significant, bipartisan action. On Feb. 5, the House passed the America COMPETES Act, companion legislation to the Senate’s U.S. Innovation and Competition Act (USICA), which cleared the upper house with bipartisan support last June. These bills aim to improve American competitiveness with China in several areas, including critical minerals and semiconductor manufacturing, where Chinese state intervention has tilted the playing field in their favor. Both the House and Senate versions include initiatives that would benefit the American private sector, and U.S. economic and national security. Among the provisions under consideration is the creation of a Critical Minerals Interagency Subcommittee to support research and development, international cooperation, extraction and supply chain resilience.
This is commendable — but still only scratches the surface of a no longer existential threat.
With Feb. 19 marking the one-year anniversary of the U.S. officially rejoining the Paris Agreement, it is time for the U.S. to demonstrate leadership by embracing a Marshall Plan-scale initiative for critical minerals that the world can join. We need greater interagency collaboration in Washington, expanded education about the procurement of “tech metals” to achieve the 21st century’s green industrial revolution and, ultimately, greater investment from policymakers to ensure that industry doers can make the dream a reality.
It’s clear that the cost of maintaining the status quo and doing nothing to increase production or stabilize the supply chain will leave us locked in a disastrous position that threatens our collective environmental, economic and national security interests.
Supporting bipartisanship that addresses critical mineral supply chain vulnerabilities with national security implications is exactly what Washington needs to remind the American people that U.S. officials can work across party lines to address common concerns, enhance resilience, and make the U.S. more competitive in the world.
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