End U.S. Dependence on Mining in China

By Aaron Ringel

The United States is facing some serious challenges. The disruptions of the COVID pandemic are now merging with sanctions on Russia to produce significant supply chain shortages. Making this doubly problematic is the nation’s heavy reliance on imports, particularly from China.

Import dependence has long posed a strategic vulnerability for the U.S.—particularly when it comes to the “rare earth” metals that make many advanced technologies possible. However, the Biden administration is considering use of the Defense Production Act to spur domestic mining of these key minerals. Doing so could help America ramp up its advanced manufacturing capacity.

As renewable energy technologies—including electric vehicles (EVs), solar panels, and lithium-ion batteries—take center stage, demand for rare earth metals is climbing. Unfortunately, the United States relies almost entirely on imports of rare earths. And roughly 80 percent of the world’s supplies come from China. Until the 1980s, the U.S. actually led the world in rare earth mining. But a short-sighted shift toward imports allowed America’s domestic mining capacity to wither away. The result is Beijing’s current stranglehold on supplies of these important resources.

Congress and the administration have recently taken a number of steps to address this vulnerability. For example, the Department of Energy is researching new methods of processing rare earths. And Congress is looking to expand domestic high-tech manufacturing through a legislative package based on the America Competes Act.

However, critical minerals sit at the very center of the picture—since they’re the building blocks necessary for every aspect of advanced manufacturing. And so, the Biden administration’s use of the Defense Production Act should focus on shortening the timeline involved in mining and processing of rare earth metals—and swiftly making them available to America’s manufacturers.

That sounds good. But the hold-up has long been the arduously slow bureaucratic process involved in federal approval of new mining operations. It currently takes up to a decade for mining operators to gain the necessary permits to launch a new mining operation. In contrast, Canada and Australia approve mining operations in a mere two to three years—and all while following the same strict environmental standards as the United States.

Despite this emphasis on a safe environment, America continues to depend on toxic mining in China. China’s mine operators have callously created a vast series of poisonous lakes and toxic dump sites while rapidly and profitably exploiting rare earth deposits.

Such wanton environmental destruction is doubly frustrating to companies operating in the U.S., since they adhere to some of the most stringent environmental protections in the world. For example, NASDAQ-listed The Metals Company (TMC) has demonstrated the feasibility of deep-sea, critical mineral extraction. TMC has explored the planet’s largest-known deposit of battery-grade metals, the Clarion Clipperton Zone of the Pacific Ocean. TMC has successfully processed key battery metals, including nickel and copper, from deep-sea nodules in a manner that generates little processing waste.

As the Biden administration contemplates the Defense Production Act in order to advance its renewable energy agenda, there needs to be a focus on funding for companies that can get to work now. That means expediting mine permit applications and reducing logistical barriers. Significantly, many companies simply can’t mine due to costly reclamation bonds. If President Biden wants to incentivize domestic rare earth and critical mineral production and processing, he should consider meaningful assistance for companies capable of meeting this critical national security need.

Mining minerals and rare earths is only the first step, however. The administration must also address the entire supply chain, including refining and processing. And even the manufacture of high-tech products—particularly EVs and their batteries—will take time to return to the U.S. in a meaningful quantity. But even if the domestic market is currently small, there’s significant growth potential—which can help to drive future job creation in these important industries.

The United States can regain its leadership in high-tech manufacturing—and do so while also protecting the environment. President Biden should use the Defense Production Act to jump-start safe, domestic mining of critical minerals and rare earth metals. It’s an urgent priority for America’s renewable energy future.

Aaron Ringel, a former Assistant Secretary of State for Global Public Affairs, is Vice President for International Policy and Advocacy at the Coalition for a Prosperous America (CPA). 

From realclearenergy.com