The US mineral effortOctober 10, 2023
A series of high-profile incidents had the US mining sector historically labelled as careless, corrupt, and devastating. It led to a passage of landmark preservation laws and an industry offshoring to foreign destinations.
But China was ready to grow and, as is the way with an economy undergoing rapid development, had fewer qualms about letting Mother Nature take a few for the team.
Ping-pong diplomacy, lifted embargoes, and a mutual Soviet opponent had the two nations in good standing, but the winds are changing fast. The US finds itself in a precarious position in this transforming world. It must be highly unsettling for the world’s largest economy, to have 30 of its 50 listed critical minerals dominated by a geopolitical enemy.
China has proven willingness to weaponise supply chains and has restrictions on gallium and germanium in place. The concerns that China would cut off more mineral resources and put a bottleneck on America’s ability to develop green energy technologies and advanced defence systems are very real.
The U.S Senate Committee on Energy and Natural Resources held a hearing late last month with the object of countering the People’s Republic’s control.
“Just like Putin weaponized Russia’s oil and gas resources to try to scare off Europe from supporting Ukraine, Xi Jinping and the Chinese Communist Party are more than willing to use critical minerals as leverage to put Americans and the free world at risk,” Democratic Senator Joe Manchin said to open the hearing.
It has become a bipartisan issue, and both Donald Trump and Joe Biden administrations made policy decisions directed at ramping up production at home, with Trump finalising a rule that effective immediately added mining to a list of industries that can receive fast-tracked permitting.
But their actions have been largely unsuccessful. The US needs the minerals now, the permitting process is long, and environmental lobbyists have been remarkably successful in blocking developments.
It means what might take two years in Australia or Canada takes ten on home soil, and projects like a proposed $1.7 billion nickel-copper-cobalt mine in Minnesota or what is believed to be the world’s richest lithium deposit in the woods of Maine are unlikely to ever see the light of day.
And the Biden Administration has recommended changes to a law from 1872 that, unlike Australia, has the U.S collecting no royalties on resources extracted from federal lands.
An interagency working group said the changes could pay for boosted mining permits, infrastructure, and services to mining-dependent communities, but was seen as another deterrent by Republicans and industry groups.
President and CEO of the National Mining association Rich Nolan said the recommendations did little to advance a stated goal of securing domestic supplies.
“Will throw additional obstacles in the way of responsible domestic projects, forcing the U.S. to double-down on our already outsized import reliance from countries with questionable labour, safety and environmental practices,” he warned.
The top Republican on the Senate Energy and Natural Resources panel, Wyoming Senator John Barrasso, was more amplified, saying it would take a sledgehammer to affordable reliable energy and force the U.S to buy even more critical minerals from China and other nations that use forced or child labour.
An offshoring of the US mining industry gave an underhand approval to environmental and labour tactics well beneath domestic standards, but the public was able to tolerate an out of sight and mind approach to mineral resources.
But those resources are now at a fore of global policymaking, and even with an expanded definition of domestic extending the reach of US capital, it is now apparent that the superpower will need to exploit the immense natural resources buried within its 50 states.
It could take a massive shift in public perception for the U.S to get the sector back on rails, but with a massive gap between raw materials and demands of the energy transition, the battle for the hearts and minds of mining is one it may need to win.
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