US president Donald Trump yesterday signed an executive order aimed at broadening support and finding ways to use existing domestic legislation on energy and automotive policy to provide financing for the development of critical mineral supply chains in the US.
Previous measures aimed at supporting the development of a rare earth supply chain in the US have been linked solely to the defence industry. And while almost none of the measures in the executive order can realistically be completed before the US election on 3 November, they attempt to forge a link between access to the supply and processing of critical minerals and metals, and US policy on energy, pollution and manufacturing incentive programmes.
The order also goes further than ever before in its condemnation of what it sees as "aggressive economic practices of certain non-market foreign producers", particularly in the rare earths sector.
"The United States now imports 80 percent of its rare earth elements directly from China, with portions of the remainder indirectly sourced from China through other countries. In the 1980s, the United States produced more of these elements than any other country in the world, but China used aggressive economic practices to strategically flood the global market for rare earth elements and displace its competitors. Since gaining this advantage, China has exploited its position in the rare earth elements market by coercing industries that rely on these elements to locate their facilities, intellectual property, and technology in China. For instance, multiple companies were forced to add factory capacity in China after it suspended exports of processed rare earth elements to Japan in 2010, threatening that country's industrial and defense sectors and disrupting rare earth elements prices worldwide," the order says.
Other materials cited in the order include barite (barrium sulphate mineral), which is used in the oil industry as a weighting material for drilling fluid and is critical for hydraulic fracturing, and semiconductor metal gallium, which is critical to LEDs, smartphones, and next generation 5G telecom networks.
The US imports more than three-quarters of the barite it consumes, with over half coming from China. And it is wholly dependent upon imports of gallium metal, which is produced as a by-product of the aluminium industry, although the Trump administration has imposed a 25pc import tariff on gallium from China, which produces around 95pc of global supply.
The executive order also referenced graphite, which is used in batteries for cellphones, laptops and electric cars, and for which the US is 100pc dependent on foreign supply. China produces over 60pc of the world's graphite, including almost all of the world's high-purity graphite for rechargeable batteries.
The scope of the order is extremely broad and even includes minerals not mentioned in the list of 35 critical minerals that was prepared in response to an executive order signed by Trump in December 2017 (see chart). For 31 of the 35 critical minerals, the US imports more than half of its annual consumption, and it has no domestic production for 14 of them.
Defence Production Act
Trump signed five presidential directives on rare earths in July 2019 under the Defence Production Act. They were focused on the development of US capacity to separate and process heavy rare earths, light rare earths, the production of neodymium-iron-born NdFeB magnets, samarium-cobalt magnets and rare earth metals and alloys. The act includes provision for the purchase of resources or critical technology to restore the domestic industrial base essential for national defence.
The most high-profile measure taken to date is the awarding of a tender in December last year for marketing and engineering and design work for the construction of two heavy rare earth separation plants in the US. The two tender winners were Australian producer Lynas, the only large integrated rare earth producer outside China, which has partnered with US rare earth technology firm Blue Line to build a plant in Texas, and MP Materials, owner of the Mountain Pass mine in California, the only operating rare earth mine in the US.
| 35 Critical Minerals, US Geological Survey |
| Aluminum (bauxite) |
| Antimony |
| Arsenic |
| Barite |
| Beryllium |
| Bismuth |
| Cesium |
| Chromium |
| Cobalt |
| Fluorspar |
| Gallium |
| Germanium |
| Graphite |
| Hafnium |
| Helium |
| Indium |
| Lithium |
| Magnesium |
| Manganese |
| Niobium |
| Platinum group metals |
| Potash |
| Rare earth elements |
| Rhenium |
| Rubidium |
| Scandium |
| Strontium |
| Tantalum |
| Tellurium |
| Tin |
| Titanium |
| Tungsten |
| Uranium |
| Vanadium |
| Zirconium |
| Under the 2017 Executive Order, these commodities qualify as "critical minerals" because each has been identified as a non-fuel mineral or mineral material that is essential to the economic and national security of the United States, that has a supply chain vulnerable to disruption, and that serves an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economy or national security. |
