As the Pentagon and Energy Department drag their feet to dent China’s dominance of rare earth minerals crucial to high-tech industry, Russia is moving ahead. The Department of the Interior has a possible solution but little support.
The Kremlin plans to spend more than $1.5 billion in infrastructure development to challenge China’s total domination of the rare earth sector. Reuters reported last month that Russia plans to raise shares in their global critical mineral rare earths output by 10 percent to become almost self-sufficient in five years and a net exporter in six. Or so it claims.
Critical materials and rare earths minerals are core elements of the hardware in electronics that power cell phones, computers, automobiles, civil and military aircraft, space vehicles, weapons systems, and many other products critical to our economy and security.
Moscow’s onshoring strategy includes the reported development of eleven projects, including the 56-plus year old Tomtor deposit in Russia’s far east. Russian government officials say this institutional support will enable Russia to become a leader in the critical mineral and rare earth industry as well as potentially a manufacturer of goods and advanced next-generation technologies. This can happen if Russia ups its capacity to 7,000 tons output a year.
Russian initiative makes US acceleration more important
Russia’s initiative, modest as it is, increases the urgency for the US to speed up its critical minerals sovereignty to preserve its world leadership in high technology production.
The United States, as with the rest of the world, is heavily dependent on China. The Chinese Communist Party controls more than 63 percent of global rare earth production and 37 percent of global reserves.
Revive a reliable old institution
The US has a ready solution if the administration chooses to take the opportunity. That course of action, as proposed in previous Center for Security Policy work, is the reconstitution of the US Bureau of Mines.
In one of the more robust publications on this issue, Ned Mamula, author of Groundbreaking!: America’s New Quest for Mineral Independence, argues that reestablishing the Bureau of Mines with a clear, modern mission would create new opportunities for the critical materials sector.
Mamula explores in great detail where the US went wrong in abolishing the effective and spartan bureau. A revived, new Bureau of Mines would secure a future for America to continue to exist as a developer and manufacturer of advanced technologies to win the tech wars.
The new Bureau of Mines should be structured for cabinet secretaries to collaborate with the secretary of the interior who would oversee executive orders related to critical minerals.
However, that isn’t a priority yet.
Market manipulation can cripple US high-tech production
Last year the US Geological Survey reported that the nation relies on other countries for more than a dozen minerals vital to America’s economy and security. Mainly under Chinese Communist Party control, those minerals are subject to market manipulation and even embargo.
Russia understands the market manipulation game as a danger and an asset. This is because Moscow is guilty of the same in the energy sector. Its traditional energy production capabilities in effect have given the Putin regime a substantial percentage of control over the European and North Asian gas and oil markets. This market share has actively prompted the Russians to cut out American competition, while the Trump Administration builds momentum to stop Putin’s Nordstream 2 gas pipeline directly to Germany.
Kremlin’s energy war is a warning
President Trump at the 2018 NATO summit that Russia has successfully subjugated Germany and other NATO nations via dependence on Russia for oil and gas. This met with squeals of rage in Europe by many of the voices that accused Trump of colluding with Putin. But now, opposition to Nordstream 2 is building. More and more Europeans, and trans-Atlantic advocates in Washington, are agreeing with Trump even though many hate to admit it.
Moscow sparked an oil price war with Saudi Arabia in March, leaving American energy companies feeling the hurt as the Chinese coronavirus pandemic spread. As pointed out by the Wall Street Journal, Russia’s oil-market war with Saudi Arabia is part of a strategic campaign to cripple American shale-oil production and the United States’ continuing development of “a powerful economic tool that has increased allowed Washington to advance its foreign policy agenda.”
Rare earth and critical mineral production are no different. As China’s recent threat to sanction Lockheed Martin teaches, the United States cannot afford to lose out to global competitors on critical supply chains that keep our nation strong.
Lack of infrastructure is our Achilles’ heel
To make America great again and keep it there, the United States must stop at nothing to continue a strong and effective strategy for critical minerals and energy production and exportation. However, when executing its strategy, the Trump Administration should learn from the current struggles of the oil and gas industry, securing solutions and outcomes that avoid the same mistakes of the past.
Case in point: while the United States has been able to ramp up production of oil and gas to become the world’s largest producer of oil and gas, there was little investment in the infrastructure and transportation facilities to enable producers to handle the sharp increase in LNG and oil for export.
For all of the progress the US has made in unconventional oil and gas production, the lack of adequate infrastructure has created industry vulnerabilities in times of global pricing turmoil, casting doubt on the long term viability of the domestic oil and gas production.
What’s true for US oil and gas is equally true for tech metals like the rare earths.
Operation Warp Speed
The United States needs to protect domestic producers by crafting a strategy that empowers the rare earth industry. Now. This is not a vote-getting issue. But it is an urgent strategic matter for all Americans, especially with China’s total domination and Russia’s new initiative.
Russia’s $1.5 billion rare earth infrastructure development announcement, while a wake-up call, is little more than a political stunt – like its claim of being the first to develop a COVID-19 vaccine – to undermine American efforts on pressing public issues and enhance Putin’s rickety hold on power.
With that said, the United States under President Trump’s leadership has been able to move forward with the launch of Operation Warp Speed, one of the greatest public private partnerships in the history of the United States.
Warp Speed proves that with the right mindset an administration can circumvent oppositional forces within the agencies and accomplish phenomenal feats. However, various agencies are reluctant to act in a revolutionary and decisive way. This raises the question: How in tune are government officials to the dangers of our supply chain deficiencies?
Critical minerals supply chain strategy is on the shelf
It has been more than a year since USGS released “A Federal Strategy to Ensure a Reliable Supply of Critical Minerals” to make America’s economy and defense more secure. The strategy directed the Department of the Interior (DOI) to locate domestic supply, ensure access to information for the study and production of minerals, and expedite permitting for minerals projects has gone without any concrete or substantive action.
Since then, both chambers of Congress have sent out bipartisan letters calling on the Department to act on its authority to do so. In August, Casey Hammond, Deputy Assistant Secretary of the Interior for land and minerals management, wrote an op-ed in the Idaho State Journal showcasing an awareness of the issues.
Now is the time for substantive policy.
The uninspiring action – or more precisely the inaction – at the departments of Defense and Energy have fueled rumors that neither agency pleased with the resurgence of Interior’s interest. The Pentagon and Energy show little actual desire to produce deliverables on critical materials that secure an America First agenda.
A modern, spartan Bureau of Mines is a big win
The likelihood of the revival of the Bureau of Mines and driving forward a federally backed industry is near zero during a first Trump term. In the meantime, the Department of Defense continues to drop the ball by supporting programs with far-fetched efforts to secure a US based supply chain while the Department of Energy continues to support scientific projects.
Even so, the Trump administration, with the Secretary of Interior as the point man, can act on delegated authorities and boost the industry while it can – a big win for America in 2020.