Saturday 31st October 2020

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Posts tagged ‘Northern Dynasty Minerals Ltd. (NDM)’

Crisis: More studies needed

October 1st, 2020

The U.S. responds to a critical minerals “emergency” with additional reports

by Greg Klein | October 1, 2020

A national emergency normally calls for action. But although the U.S. faces “an unusual and extraordinary threat”—not referring to insurrectionary riots but foreign dependency on critical minerals—the country intends to respond with more studies and reports. Such was the gist of President Donald Trump’s September 30 executive order.

Yet he made his awareness of the problem manifest. Referring to 35 critical minerals the U.S. deems essential for uses including national security, economic well-being, electronics, transportation and infrastructure, Trump cited U.S. Geological Survey data showing his country imports over half its supply of 31 of the 35 minerals. For 14 of the minerals, the U.S. depends completely on foreign sources.

The U.S. responds to a critical minerals “emergency” with more reports

U.S. President Trump arrives in Pennsylvania days ahead of
his declaration of a national emergency on critical minerals
and call for a rejuvenated mining industry.
(Photo: White House/Tia Dufour)

That leaves the country vulnerable “to adverse foreign government action, natural disaster or other supply disruptions. Our national security, foreign policy and economy require a consistent supply of each of these minerals.”

Standing out as the greatest foreign supplier and greatest foreign threat is China. Rare earths provide a stark example. While the U.S. led global production back in the 1980s, China now provides 80% of American supply directly and, indirectly through other countries, some of the remainder too. Since the 2010 Senkaku incident, China’s machinations have included withholding RE exports, then flooding the market to ruin potential non-Chinese suppliers, and forcing RE-dependent manufacturers to relocate to the Middle Kingdom.

Among the critical 35, Trump also emphasized barite (more than 75% of U.S. supply is imported, over half the total from China), gallium (95% of global supply comes from China) and graphite (100% of U.S. supply is imported; China provides over 60% of global supply and almost all high-purity flake graphite).

What Trump actually ordered, however, are further studies and reports—lots of them. Often with overlapping areas of concern and some with recurring updates, federal studies will consider ways to encourage domestic extraction and processing, as well as expand and protect domestic supply chains. Some strategies include import restrictions against China and other countries, and loan guarantees to companies linked to a supply chain.

Our nation’s undue reliance on critical minerals, in processed or unprocessed form, from foreign adversaries constitutes an unusual and extraordinary threat, which has its source in substantial part outside the United States, to the national security, foreign policy and economy of the United States. I hereby declare a national emergency to deal with that threat.—U.S. President Donald Trump

Trump’s concern dates at least to December 2017 with an executive order calling for a “federal strategy to ensure secure and reliable supplies of critical minerals.” The order followed closely on a 900-page USGS report that was the country’s first comprehensive update since 1973.

The 35 list followed in 2018. Later that year the U.S. Department of Defense presented its own report to Trump. In 2019 alone he signed five “presidential determinations finding that domestic production of rare earth elements and materials is essential to the national defence.”

Some more tangible developments this year included undisclosed amounts funded by the U.S. Department of Defense to study the feasibility of two potential rare earths separation facilities, one by California RE miner MP Minerals, and the other by Australian RE miner Lynas Corp with its American JV partner Blue Line Corp, to be located in Texas.

Last month Washington awarded $7.97 million in 2020 funding to the Earth Mapping Resource Initiative for critical geoscientific studies in 21 states.

As one of the 35 essentials, uranium rates strategies of its own. It fuels about 20% of American electricity, not including U.S. Navy nuclear submarines and aircraft carriers. But the country relies on imports for about 90% of supply. Backed by Trump’s 2021 budget, the U.S. Department of Energy formed a working group to encourage domestic uranium mining, support nuclear fuel cycle capabilities and establish emergency uranium reserves.

Another energy-related presidential order aims to safeguard vital infrastructure including electricity substations and water treatment facilities from foreign control.

Some positive steps notwithstanding, China’s dominance remains unchallenged. Trump’s latest round of studies, under the guise of a national emergency, might have more to do with courting job-hungry voters. “In many cases, the aggressive economic practices of certain non-market foreign producers of critical minerals have destroyed vital mining and manufacturing jobs in the United States,” he said.

Over the last several decades, our nation’s mining industry has suffered due to political inaction, a broken permitting process and predatory foreign competition from China.—A White House statement

Yet other mining issues question his ability to support the sector. This is the president who failed to protect the Appalachian coal industry despite 2016 assurances. Alaska’s Pebble saga presents a giant copper-gold-molybdenum deposit backed by Trump but mired in regulatory battles. Just recently scandal joined the imbroglio as now-resigned Pebble Limited Partnership CEO Tom Collier was recorded talking up his company’s relationship with U.S. politicians and officials.

The November election outcome adds more uncertainty to Trump’s stated goals. But bipartisan concern over foreign dependency has emerged in the U.S. House of Representatives. In July both parties came together to form a Critical Minerals Caucus to encourage domestic production. In September a bipartisan bill tabled in the House called for tax incentives for mining, reclaiming and recycling critical minerals.

Of course the U.S. hardly stands alone. This week the EU created the European Raw Materials Alliance to “identify barriers, opportunities and investment cases to build capacity at all stages of the raw materials value chain, from mining to waste recovery. In a first phase, the alliance focuses on the most pressing need, which is to increase EU resilience in the rare earths and permanent magnets value chains, as these are vital to most EU industrial ecosystems.”

The alliance follows a critical raw materials action plan announced earlier last month. But participants need not be European. “Pilot partnerships with Canada, interested countries in Africa and the EU’s neighbourhood will start as of 2021,” the EU stated.

Another transnational proposal would bring the U.S. and Canada together. The two countries announced their Joint Action Plan on Critical Minerals Collaboration in January and, without specifying anything tangible, reaffirmed their intentions in June.

October 16, 2020, update: Canada, Australia and U.S. announce the Critical Minerals Mapping Initiative.

Got the minerals?

March 4th, 2019

A new book says self-imposed obstacles block U.S. self-sufficiency

by Greg Klein | March 4, 2019

“The Middle East has oil, China has rare earths.”

Deng Xiaoping’s 1992 implied threat became all too real eight years later in the Senkaku aftermath, when RE dependency put Japan and the West at China’s mercy. But just as the United States overcame the 1973 OPEC embargo to become the world’s leading oil producer, that country can overcome its growing reliance on dodgy sources of mineral production and processing. So say authors Ned Mamula and Ann Bridges in Groundbreaking! America’s New Quest for Mineral Independence.

Their country’s problem isn’t geology but policies, the book argues. Repeatedly pointing to Canada and Australia as role models, the authors say their own country’s mining potential can restore mining self-sufficiency, or at least minimize a crippling dependency.

A new book says self-imposed obstacles block U.S. self-sufficiency

Indeed, the mighty nation has a mighty problem with minerals: Imports supply many critical minerals and metals in their entirety, with heavy reliance on Russia and especially China, “countries we consider at best our competitors, and at worst our adversaries.”

Rare earths stand out as the “poster child for U.S. critical mineral vulnerability.” As the authors note, REs remain “essential for military and civilian use, for the production of high-performance permanent magnets, GPS guidance systems, satellite imaging and night vision equipment, cellphones, iPads, flat screens, MRIs and electric toothbrushes, sunglasses, and a myriad of other technology products. Since they offer that extra boost to so many new technologies, these rare earth metals rival energy in importance to our 21st century lifestyle.”

Industrial countries not only surrendered rare earths mining and processing to China, but gave up technological secrets too. That happened when China forced RE-dependent manufacturers to move their operations to China. After Apple transplanted some of its manufacturing to that country, China copied and reproduced the company’s products, at times outselling the iPhone with knock-offs.

A new book says self-imposed obstacles block U.S. self-sufficiency

Other intellectual property faces threats. “U.S. companies—Intematix, GE (Healthcare/MRI Division), Ford (Starter Motor Division), and Battery 1,2,3—have all added manufacturing capacity in China, and so has Japan’s Showa Denko, Santoku, and scores of other global electronics companies.”

RE dominance has also allowed China to lead the world in technology for electric vehicles, renewable energy and next-generation nuclear power. And America relies on its rival for defence: “Most of the U.S.’ advanced weapon systems procurement is 100% dependent on China for advanced metallurgical materials.”

Foreign dependency includes tantalum, “critical to the economy and national defense,” gallium, cobalt, uranium and the list goes on.

According to a just-published report from the U.S. Geological Survey, “in 2018, imports made up more than half of U.S apparent consumption for 48 non-fuel mineral commodities, and the U.S. was 100% net import-reliant for 18 of those.

“For 2018, critical minerals comprised 14 of the 18 mineral commodities with 100% net import reliance and 15 additional critical mineral commodities had a net import reliance greater than 50% of apparent consumption. The largest number of non-fuel mineral commodities were supplied to the U.S. from China, followed by Canada.”

The takeover of former TSX listing Uranium One by Russia’s state-owned Rosatom brings threats worse than most observers realized, the authors say. The acquisition granted the Russian government membership in trade organizations and therefore valuable intel formerly available only through espionage. Uranium One also gives Russia the ability to curtail future American uranium production and use its influence on Kazakhstan, the world’s top producer, to flood the U.S. with cheaper, subsidized supply. That could put both U.S. production and processing out of business in a tactic reminiscent of China’s RE machinations.

China’s communist government uses a ‘debt trap’ model of economic development and finance which proffers substantial financing to developing countries in exchange for an encumbrance on their minerals resources and access to markets. This predatory model has been particularly effective in countries characterized by weak rule of law and authoritarian regimes.—Ned Mamula
and Ann Bridges

The Chinese “are now masters at securing and controlling core natural resources globally, especially minerals.” The country uses long-term contracts, equity investments and joint ventures, as well as the “debt trap” that provides “substantial financing to developing countries in exchange for an encumbrance on their minerals resources and access to markets. This predatory model has been particularly effective in countries characterized by weak rule of law and authoritarian regimes.”

The U.S., meanwhile, suffers not only from naivete and short-term thinking, but from self-induced challenges. The authors devote an entire chapter to Alaska’s Pebble project, maybe the world’s largest undeveloped copper-gold-molybdenum deposit. After more than two decades and over $150 million in spending, “Pebble is still more about politics than geology, much less mining the minerals known to exist there.”

The story stands out as “the classic cautionary tale in U.S. history of how a powerful federal regulatory agency can go rogue and impose its will on an unsuspecting permit applicant.”

Suggestions to alleviate these ills include streamlining the permitting process, among other recommendations to open up domestic production and re-build supply chains. One of the authors’ more interesting ideas concerns teaming up with environmental activists to promote ethical green supply chains that would shut out conflict minerals.

The book’s marred by repetition, sloppy English and some bold-faced typographical shouting. It’s also cluttered with a few questionable information sources and excerpts from a novel that would have been better left unwritten. The portrayal of Canada as a role model, moreover, might induce bitter laughter from this side of the border. But Groundbreaking offers a vital message to general readers. In doing so, it could reinforce a growing awareness in the U.S. about the need to minimize foreign dependency.

Read more about U.S. efforts to secure critical minerals here and here.