Restraint will be impossible without critical mineral independence

To maintain a strategic advantage in the 21st century, the United States is going to need minerals, and lots of them. Where these minerals come from will have a dramatic effect on the kind of foreign policy Washington can reasonably pursue.

Emerging technologies in sectors important to national security will require increasing amounts of minerals and rare earths in the decades to come.

In the transport industry, raw materials, in particular lithium, cobalt, nickel and graphite, account for 79% of the cost of electric vehicle batteries. The U.S. military plans to deploy an all-electric non-tactical vehicle fleet by 2035 and an all-electric tactical vehicle fleet by 2050.

In computing, guidance and control systems on a range of platforms require critical minerals. It is estimated that a single F-35 Lightning II aircraft requires approximately 920 pounds of rare earth materials.

In the field of energy, the advancement of renewable energy sources means an even greater demand for minerals. Last year, 22,355 megawatts (mW) of wind power came online in the United States. A single three mW wind turbine requires about two tons of rare earth elements, as well as tons of other minerals like copper and aluminum.

There is growing evidence that strategic minerals are not only the key to economic prosperity, but also crucial inputs for national security capabilities. In a rare case of agreement, President Trump and President Biden issued executive orders acknowledging this reality. However, the national security strategy of both administrations is silent on a crucial strategic issue. What is America’s long-term strategy for maintaining a supply of the minerals that underpin national security technologies?

America will soon have to choose between three different approaches to meet this need: seek external access, increase internal supply, or simply trust the markets.

Careful study of the consequences of each reveals that the more prudent choice is to increase domestic supply, as it allows for a moderation strategy abroad.

Find external access

China has already provided an example of a strategy that aggressively prioritizes access to foreign mineral supplies. China holds a virtual monopoly over the Democratic Republic of Congo’s cobalt mines, which produce 70% of the world’s cobalt. In Bolivia, a Chinese consortium is the main partner supporting the government’s development of a massive lithium operation. Chinese diplomats are now courting the Taliban with an eye on Afghanistan’s large mineral deposits.

The main benefit of Beijing’s outreach is that China has rapidly increased access to minerals within a few years.

However, this strategy probably requires being comfortable with corruption. Hundreds of millions of dollars have disappeared in murky circumstances in the Congo. Fostering a resource curse, especially in developing countries, could lead to instability that is counterproductive to other goals, such as counterterrorism.

At worst, a strategy of securing foreign supplies of critical minerals is a slippery slope towards intervention or outright annexation. There are many explanations for Russia’s recent invasion of Ukraine, but few acknowledge Ukraine’s abundant mineral wealth. America has already flirted with this imperialist approach to key resources. When guano, or bird droppings, became a crucial input for fertilizers in the early 19th century, Congress authorized citizens to annex islands with large deposits. Such neo-colonialism toward mineral-rich states today would have very little chance of winning over the friends of the United States and would require a credible force to back up claims. Given the significant financial and moral costs of an interventionist foreign policy, America would be wise to weigh other options.

Increase domestic supply

Is it possible to meet America’s strategic mineral needs through domestic mining? The estimates provide strong arguments for optimism. A proposed project in Nevada is expected to be able to supply 25% of global lithium demand, and identified cobalt reserves in Minnesota and other states total around one million tons. California has the richest rare earth mining in the Western Hemisphere.

The most attractive benefit of this approach would be America’s ability to maintain a foreign policy free from disproportionate deference to major mineral exporters. Washington’s long reluctance to displease Saudi Arabia is a reminder of how reliance on a foreign producer of a key natural input often comes with uncomfortable diplomatic concessions.

The world now has a small glimpse of how mineral dependency can force other foreign policy considerations to take a back seat. For example, Russian metals giant Norilsk Nickel is a key supplier of nickel and palladium, which are essential inputs for batteries and semiconductors. Norilsk has been called “too big to sanction” and has been largely exempt from sanctions imposed on Moscow since its invasion of Ukraine.

The most significant cost of this approach is the environmental risk posed by domestic extractive projects. Industry sources say China’s higher tolerance for more pollution and lower labor standards contribute to Beijing’s current advantage in critical minerals.

With future research and development, recycling and new technologies could reduce the need for mining. However, no panacea capable of eliminating the need for a new extraction currently exists.

The trade-offs for this route will largely depend on the safety and technology standards of each individual project.

trust the market

A final choice would be to trust global mineral markets to solve supply problems, which would not require America to explicitly adjust its foreign or domestic strategies. The main fear of such an approach is vulnerability to coercion. During a 2010 row with Japan over fishing rights, China instituted an embargo on exports of rare earth elements to Japanese companies, leading Tokyo to quietly back down. The National Defense Industrial Association expressed concern that “China has restricted the export of rare earths, raising concerns about their availability for the defense industrial base.”

Critics of this fear argue that the 2010 episode actually showed the practical and economic difficulties of effectively leveraging control of mineral supply over the long term. Adopting a market-dependent approach would allow the United States to avoid taking on domestic environmental risks related to mining projects or having to rely on a single supplier.

However, this approach bets that an interruption in the supply of minerals will be both temporary and not too painful. Nickel prices soared to all-time highs after Russia’s invasion sparked concerns over its large exports, prompting a crash in the London Metal Exchange. The possibility of other “black swan” events that could significantly impact prices, such as the nationalization of copper and lithium mining in Chile, haunts importers. A recent Department of Defense report points out that “the critical materials sector is distorted by political intervention and unfair trade practices… [that] pose significant challenges to the survival of domestic and allied manufacturers.

Intelligently playing the “big game”

The World Bank predicts that the world will soon need more than three billion tons of minerals to develop emerging technologies in transport, computing and energy. The critical mineral supply chain is increasingly becoming the subject of congressional hearings, Pentagon studies and executive branch pronouncements.

Faced with the new “Great Game” of the 21st century, America must adopt a policy of restraint that avoids the temptations of intervention or imperialist behavior motivated by a rush for critical minerals. A moderation strategy is made possible by domestic production. Even the possibility of dependency or coercion is rendered toothless by an abundant supply in the country, allowing America to retain its self-reliance in foreign policy as these critical minerals grow in importance. Taking the necessary steps to safely increase domestic production over the long term will add credibility to a proclaimed policy of American mining independence. The average mining project takes about sixteen years to move from discovery to production, so there’s no better time than the present to put these policies into motion. Increasing research and development funding for safe extraction technologies and practices is also always a good idea. More importantly, future strategic documents must articulate a coherent whole-of-government strategy for the inputs that will soon fuel international relations.

Through careful investment in the supply of minerals at home, the United States can pursue a prudent foreign policy of restraint and self-reliance abroad. The seemingly mundane rocks right under our feet are in fact the cornerstones of a wise and successful American foreign policy.

Andrew C. Jarocki is the editor of the Realistic review. He is currently a Marcellus Policy Fellow with the John Quincy Adams Society.

Picture: Reuters.

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