The Presidential Executive Order on a “Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals,” issued on December 20, 2017, was a major step taken to decrease the dependency of the United States on imports of critical materials from foreign countries. During the 1950s, the U.S. depended on foreign imports for eight important minerals. Today, that number has grown to 20 minerals, plus the all-important 17 rare earth elements, most of which are imported to from China.
The U.S Geological Survey's Minerals Information Center, part of the United States Department of the Interior, tracks America's reliance on other countries for their mineral commodities exports that are critical to the United States' national security and economy.
China is estimated to produce approximately 97% of the global supply of rare minerals. These elements are used in electronic gadgets, such as cell phones and laptop computers, in the manufacture of national defense equipment, in the production of cancer treatment drugs, arthritis medicines, surgical supplies, superconductors and powerful lasers. With such a large percentage of these rare earth elements under the control of the Chinese government, it's understandable how continued reliance on them for these critical materials makes America strategically vulnerable.
Increased Dependence is Becoming Increasingly Costly
The U.S. is currently spending between seven and eight billion dollars per year importing critical minerals, with prices rising. The cost of rare earth elements, for example, may increase five- or six-fold in a single year. Cobalt and lithium are two elements in high demand because of their critical need for producing lithium-ion batteries used in everything from cellular phones, laptop computers and tablets to electric vehicles (EVs), solar power storage and emergency power backup systems, solar panels and wind turbines.
The U.S. imports more than 50% of the lithium that it uses, and nearly three-quarters of the cobalt used. The prices of these minerals continue to rise significantly. Analysts estimate that prices of these critical commodities may double (or even triple) by the year 2020. The Paris Agreement, signed in 2015 by 195 nations all engaged in a concerted effort to cut CO2 emissions, will cause demand to increase for these minerals, as it's projected that, by the year 2040, wholly one-third of the cars on the road will be EVs.
With an estimated 500 million EVs on the road by then, some suspect that lithium and cobalt may occupy a similar position to the one oil plays today. Our excessive dependence on foreign imports for our supply of these critical, strategic materials has been sounding alarms from both the CIA and the USGS.
Rare Earth Metal Supplies Have Become Critical
The supply of rare earth elements is scarce not because mineral resources are low, but the process of mining them is both expensive and dangerous. We have plenty of raw materials available here in the U.S., especially with the recent lifting of the mining ban on millions of acres of land in the California desert, but we've yet to develop that potential. Lower labor costs and ease of restrictive regulations have enabled China to develop their supply of critical minerals to the point that they have created a virtual monopoly on many strategic materials that they not only horde for themselves but also use as political leverage against other countries requiring these materials. You can read about their recent trade dispute within the World Trade Organization here.
U.S. mining reforms are crucial if the country is to escape dependence on foreign imports, which hurts both the general economy and, moreover, the country's strategic defenses. Of all countries on earth, the U.S. is the most restrictive in the granting of mining permits and the regulations saddling would-be mining operations. Mining projects typically lose 1/3 of their value while wading through the bureaucratic red tape and, by the time mineral extraction actually begins, as much as one-half of a mine's value may be lost. This makes the prospect of opening a new mining operation a losing proposition for many startups.
The U.S. has abundant resources for producing the critical minerals now being imported from other countries. We're responsible for developing the technologies requiring the use of these expensive, strategic materials, yet cannot supply the needed materials without buying them elsewhere. Being dependent on foreign nations for the materials needed to build our jet fighters and smart bombs is unacceptable.
We have a huge share of the world's critical resources right under our feet, and yet the U.S. spends only about 7% of total global spending on mineral exploration. We proved through our shale oil extraction technology that we could significantly decrease our dependence on foreign oil. With some reform, we can do the same with strategic minerals.