Is America at a Crossroads?

Is America at a Crossroads?

Will America have to choose between environmental issues, such as endangered species and air pollution, or mining for critical minerals?

While the media has focused on minerals for batteries and clean energy, there are other minerals critical to America’s economy that are being imported … sometimes from unfriendly countries.

The United States, due to its strong economy and high living standards, has been able to develop a strong environmental program. 

The National Environmental Policy Act (NEPA) has been a blessing. The Act established a national policy for the environment that: “Protects the quality of the human environment … and fulfills the social, economic, and other requirements of present and future generations of Americans”.

Unfortunately, environmental extremists have been able to use the courts, through never-ending litigation, to make it virtually impossible to build critical infrastructure, including mines and mineral processing facilities.

The United States has been able to shift the responsibility for environmental damage caused by mining to other countries, some of which lack strict environmental regulations.

Since the second world war and until now, the United States could rely on imports to fill its needs for critical materials. 

With China now having declared its intent to replace the United States as the world’s leading economic and political power, and with Russia’s invasion of Ukraine, the United States finds itself in danger of not having reliable supplies of critical materials.

Europe has had to confront the folly of relying on another country for its energy. In this case, natural gas from Russia. As a result, Europe is having to face the issue of energy security, where a cold winter could seriously affect its economy and the living conditions of its residents.

Rare Earths have been recognized as mostly coming from China, where China has, in the past, attempted to limit their supply.

Other minerals critical to the US economy and national defense are being imported from countries around the world. For the most part, these countries have been friendly to the United States. However, China, is trying to influence countries that have essential mineral reserves. For example, it has invested in African nations. In addition, most countries in South America now have leftist governments that are susceptible to China’s influence.

The accompanying figure from the USGS, Mineral Commodity Summaries 2022, lists materials where more than 80% of US usage is imported.

Titanium sponge is a critical material for the US economy. It was highlighted by the WSJ in a recent article, where it reported that Titanium sponge, the material used to produce titanium metal, is critical to the US aerospace industry.

China is the world’s largest producer of Titanium sponge at 177,000 tons or 51% of the world’s supply. Japan is the second largest producer at 66,000 tons or 19% of the world’s supply.

Russia has been the world’s largest supplier of aerospace-grade titanium metal.

US facilities producing Titanium sponge have been shuttered because of not being able to compete.

The United States is in the position of having China as the largest supplier of titanium sponge and Russia as the largest supplier of aerospace-grade titanium metal.

According to the WSJ article:

  • The U.S. no longer holds titanium sponge in the National Defense Stockpile. Domestic manufacturers have turned to foreign sources, chiefly Japan.
  • U.S. aerospace manufacturer Boeing maintains a joint venture with Russian manufacturer VSMPO-Avisma, the world’s largest titanium exporter, but halted orders this year after Moscow launched its invasion.
  • In July, the European Union walked back a proposal to sanction VSMPO after Airbus SE, the European commercial aircraft manufacturer, lobbied against it. Airbus continues to source roughly half of its titanium metal from VSMPO.

Titanium is only one of many materials critical to the United States economy and national defense, where the US relies on imports. 

The accompanying USGS map depicts those countries from which the US imports more than 50% of its critical materials.

The United States has three choices with respect to critical materials. It can:

  1. Avoid using the material
  2. Stockpile the material
  3. Develop mines and processing facilities in the US

Avoiding dependency

Interestingly, the US does have a choice as to whether to become dependent on some of these critical materials.

Rare earths, graphite, and cobalt, for example, are primarily required for wind turbines and battery-powered vehicles. Placing less emphasis on these applications would lower the importance these materials.

Lithium for BEVs could be minimized, while Lithium for use in batteries for power tools and other less critical applications could continue unabated.

Stockpiling

Strategic stockpiles of critical materials have been used in the past, but stockpiles are for emergencies, primarily related to national defense. It’s impossible to stockpile materials that are consumed in large quantities every year.

Developing mines and processing capabilities

In several instances, the question will boil down to whether the United States should develop mining and processing capabilities to supply large quantities of certain materials.

This seems inevitable if the United States is to remain sufficiently strong to maintain its independence.

Summary

The United States is becoming dependent on unfriendly countries for the critical materials needed for its economy and national security.

Americans have a choice of which alternative to follow: Avoidance, stockpiling or developing in-house mining and processing capabilities.

Given the adversarial nature of the China – Russian Axis, it’s difficult to see how Americans can avoid confronting these issues.

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