13 June 2019
U.S. Releases Strategy on Critical Minerals
The U.S. Department of Commerce recently released an inter-agency report setting forth a new federal strategy to ensure secure and reliable supplies of critical minerals. The report contains a government-wide action plan, including recommendations to advance research and development efforts, increase domestic activity across the supply chain, streamline permitting and grow the American critical minerals workforce.
In May 2018 the U.S. Department of the Interior listed the following minerals as critical to U.S. security and economic prosperity: aluminium (bauxite), antimony, arsenic, barite, beryllium, bismuth, caesium, chromium, cobalt, fluorspar, gallium, germanium, graphite (natural), hafnium, helium, indium, lithium, magnesium, manganese, niobium, platinum group metals, potash, the rare earth elements group, rhenium, rubidium, scandium, strontium, tantalum, tellurium, tin, titanium, tungsten, uranium, vanadium and zirconium. These minerals are used in the production of goods such as cell phones, computers, automobiles, airplanes, advanced electronics, manufacturing equipment, transportation systems, defence systems and cutting-edge medical devices.
The DOC report underscores the importance to U.S. economic prosperity and national security of ensuring the supply of critical minerals as well as the resiliency of their supply chains. The United States is currently heavily dependent on foreign sources of critical minerals, with imports comprising greater than 50 percent of annual U.S. consumption for 31 of the 35 minerals designated as critical by the Department of the Interior as well as 100 percent of annual U.S. consumption for 14 such minerals. The report proposes a multi-pronged strategy to address this dependence, including (i) advancing transformational research, development and deployment across critical mineral supply chains; (ii) strengthening the U.S. critical mineral supply chains and defence industrial base; (iii) enhancing international trade and co-operation related to critical minerals; (iv) improving the understanding of domestic critical mineral resources; (v) improving access to domestic critical mineral resources on federal lands and reducing federal permitting timeframes; and (vi) growing the American critical minerals workforce.
Among other actions, the report notes that the United States should work with Canada and Mexico to develop their critical mineral deposits given that they supply all or part of U.S. consumption of many critical minerals and the United States has historical trade relationships, established logistics chains and geographic proximity with them. This would reduce the United States’ reliance on critical mineral resources in countries that impose trade and investment restrictions and engage in conduct that distorts markets through unlawful or otherwise unfair competition, such as mainland China.
A recommendation currently being pursued by the U.S. Department of Defense involves exploring opportunities to utilise existing and future security of supply arrangements, reciprocal defence procurement agreements and National Technology and Industrial Base collaborations to reduce U.S. vulnerabilities to potential supply disruptions of critical mineral materials and their downstream supply chains. The report also highlights the need for the Office of the U.S. Trade Representative and the DOC’s International Trade Administration to monitor foreign countries’ barriers to critical mineral-related trade and investment and seek to remove such barriers when they arise.
Other recommendations include using international trade agreements to challenge unlawful or otherwise unfair trading practices of foreign countries and considering whether the circumstances of U.S. reliance on imports of high-risk materials merit investigations to determine the effect on U.S. national security. This last recommendation could potentially mean future Section 232 investigations similar to those that resulted in import restrictions on steel and aluminium products in 2018, as well as those currently underway that could yield similar measures against automobiles, auto parts and uranium.