Dear Members
I’m back! And it is great to be writing to you again.
Robust supply chains for, and an adequate supply of, strategic and critical materials are, once more, a priority for government here in the US.
Further building on former US president Donald Trump’s September 2020 executive order (EO), President Joe Biden issued his own EO around US supply chains in February 2021. Amongst other things, it tasked the Department of Defense (DoD) with not only assessing supply chain risks for critical minerals and materials, but also proposing a set of recommendations to mitigate these challenges. And, in February this year, the DoD published the action plan that it had developed in response to EO 14017.
I believe this policy activity could be of interest to MMTA members for several reasons.
First, the gamut of “defense-critical” supply chains has widened. These now specifically include: kinetic capabilities; energy storage and batteries; castings and forgings; and, microelectronics. So, a potential increase in the number of metals considered defense-critical.
Second, the potential for government-sourced funding opportunities (loans and/or grants), not least for domestic mining operations that may be able to address supply chain vulnerabilities, has increased. Recognizing just such an opportunity, one small US company has recently secured DoD funding to study the feasibility of reopening a gold and
antimony mine in Idaho (see September Crucible). (It would be the sole domestically-mined source of antimony in the US.)
Amongst other things, antimony is used in tank and medium-caliber ammunition, together with a number of other defense materials. And perhaps it is no surprise that antimony supply is currently controlled by China and Russia.
Third, whilst, under the action plan, sourcing and production in the US are important, so, too, are sourcing from, and production by, the country’s allies. Perhaps not surprising then that, only the other day, one large multinational group announced it is planning not only to start titanium metal production (it already produces titanium dioxide), but also, having become the first North American producer of scandium, quadruple its scandium oxide production—both from an existing 70-year-old facility in Canada.
Finally, but importantly, a further EO issued in October and covering the National Defense Stockpile states: “No release is authorized for economic and budgetary purposes.” Well, I supposed this had to happen sooner or later.
Stay safe everybody. And, as always,
Yours
Tom Butcher
15 October, 2022 ©2022 Tom Butcher
Tom Butcher is a Director at Van Eck Associates Corporation (“VanEck”). The views and opinions expressed herein are the personal views of Tom Butcher are not presented by or associated with VanEck or its affiliated entities.
References:
Executive Order 13953: Addressing the Threat to the Domestic Supply Chain From Reliance on Critical Minerals From Foreign Adversaries and Supporting the Domestic Mining and Processing Industries, The White House, September 30, 2020, https://trumpwhitehouse.archives.gov/presidential-actions/executive-order-addressing-threat-domestic-supply-chain-reliance-critical-minerals-foreign-adversaries/
Executive Order 14017: Executive Order on America’s Supply Chains, The White House, February 24, 2021, https://www.whitehouse.gov/briefing-room/presidential-actions/2021/02/24/executive-order-on-americas-supply-chains/
US Department of Defense: SecurinAg Defense-Critical Supply Chains, 24 February 2022, https://www.defense.gov/News/Releases/Release/Article/2944488/defense-department-releases-report-on-strengthening-defense-critical-supply-cha/
