Trump's order on critical minerals could be a boon for juniors

Published: Friday, 05 January 2018

A drive to secure supplies of materials used in the defense sector offers opportunities for new miners, but obstacles with permitting must still be overcome.

Unites States President Donald Trump has called for an end to the country's reliance on foreign sources of critical minerals, including battery materials and rare earths, in a move which could be boon to mining juniors.

The US should increase efforts to identify and exploit domestic resources of critical minerals, Trump said in an executive order signed on December 20, 2017.

"It shall be the policy of the Federal government to reduce the nation’s vulnerability to disruptions in the supply of critical minerals, which constitutes a strategic vulnerability for the security and prosperity of the United States," the order said.

"This dependency of the United States on foreign sources creates a strategic vulnerability for both its economy and military to adverse foreign government action, natural disaster and other events that can disrupt supply of these key minerals," Trump said.

A secretarial order, signed on December 21, directs the US Geological Survey to identify critical minerals, create a comprehensive geological survey of the US, and ensure this data is made publicly available.

On December 19, the US Geological Survey released a separate report which highlighted 23 critical minerals, including lithium, graphite, cobalt, and rare earth elements.

These minerals were selected based on both potential risk to their supply, and that they were deemed important to a "broad range of existing and emerging technologies, renewable energy, and national security."

Republican congressman Rob Bishop, head of the house committee on natural resources, greeted the USGS report with praise.  "A country blessed with abundant mineral resources shouldn’t be mineral-dependent and vulnerable," he said.

"This is an economic and security threat that’s festered across administrations for too long."

Securing supplies for the defense sector

The move reflects political unease over US dependence on imported minerals, particularly for use in the defense sector.

"The United States must not remain reliant on foreign competitors like Russia and China for the critical minerals needed to keep our economy strong and our country safe," Trump said.

"As both a former military commander and geologist, I know the very real national security risk of relying on foreign nations for the military’s needs to keep our soldiers and our homeland safe," US Secretary of the Interior Ryan Zinke said.

Included on the list of critical minerals are the key components in electric batteries, lithium, cobalt, and graphite. None of these materials are produced in large quantities within the US.

China is by far the top graphite miner and exporter, and the top refiner of cobalt, which is mostly mined in the Democratic Republic of Congo.

China has also been ramping up its lithium mining and refining capacity rapidly, to meet growing demand from the battery sector.

The government initiative could be good news for graphite and lithium juniors, who are currently looking for production opportunities within the US.

"President Trump’s Executive Order could be a game-changer," Anthony Huston, chief executive officer of mining junior Graphite One, told Industrial Minerals. "With graphite on the new US Geological Survey’s list of critical minerals, and with the US 100% dependent on foreign-sourced graphite, we believe we will be at the front edge of any efforts by the US government to encourage critical mineral development".

Political concerns have been also been raised on the reliance of the US on Chinese rare earths.

The large majority of the world’s rare earths are produced in China, and they are used in a wide range of technical applications, including high-tech military equipment.

Trump’s executive order was hailed by Joe Manchin, Democratic senator for West Virginia, who has championed the recovery of rare earths from coal, introducing a bill to fund research into that technology in 2017.

Manchin said the bill was "a critical step toward re-establishing a US domestic supply for these products that will make our nation less vulnerable to potential supply disruptions."

Roadblocks ahead

But despite the government’s ambitions to increase domestic production of these minerals, the plan is not without its obstacles.

Exploitable domestic reserves of graphite, lithium, and cobalt are limited. And the US has historically had only one major rare earth oxide mine, Mountain Pass in California. The facility, which is currently mothballed due to low profitability, was bought by a Chinese-led consortium in July 2017, but has yet to be returned to production.

The mining industry has also long lobbied for permitting reform, to streamline the process of turning identified resources into productive mines.

The executive order states that it will be the policy of the government to tackle dependence on imported minerals by "streamlining leasing and permitting processes to expedite exploration, production, processing, reprocessing, recycling, and domestic refining of critical minerals".

Responsibility for reforming the mine permitting process lies with the legislature, with bills on this subject currently working their way through both Senate and Congress.

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