Stocks were rocked yesterday after China’s People’s Daily newspaper published an editorial warning that China could restrict exports of rare earth minerals if trade tensions continue escalating. This threat spooked markets because rare earth minerals are critical components of everything from smart phones to batteries to defense technologies — and the U.S. is highly reliant on China for them.
In light of this ace-up-China’s-sleeve during trade negotiations, it is prudent to revisit a recent study by the Committee to Unleash Prosperity on America’s mineral resources. As the report notes, America is uniquely and abundantly blessed with rare and critical earth minerals, but absent a new, ‘America First’ mining strategy, we won’t have the means to harness them.
Arguably, no nation on earth has been endowed with a greater abundance of critical and rare earth minerals than the United States. The National Mining Association estimates that the United States sits atop $6 trillion in mineral resources. We could be easily adding $50 to 100 billion to our GDP every year through a smart, pro-growth mining policy.
But foolishly, we are not. As recently as 1990, the United States led the world in mining output. But, according to 2017 data from the U.S. Geological Survey, the United States is today nearly 100 percent import-dependent for at least 20 critical minerals (not including each of the “rare earths”), and between 50 and 99 percent reliant for another group of 30 key minerals. If all 17 rare earth elements were counted separately—as they should be—the United States is importing 37 minerals at 100 percent, for a total of 67 key minerals imported at more than 50 percent reliance. Herein lies the frustrating paradox. The United States today is highly reliant on China and Russia for critical minerals, even though we probably have more of these valuable resources than both these nations combined.
The study proposed solutions to alleviate our reliance on imported minerals including:
1) Immediately streamline the environmental permitting process, as other major mining countries, like Canada and Australia, have done.
2) Provide better access to public lands that contain known mineral deposits or that are geologically likely to host mineral deposits.
3) Allow mapping of our public lands so that we know how large mineral deposits are and where they are located.
Important to remember amid today’s announcement is that our reliance on foreign rare earth minerals is a self-inflicted wound. Reducing the administrative bureaucracy that impedes mining in places like Alaska would go a long way towards correcting our failure to harness our mineral potential.
The study concludes that “Secure access to critical minerals is vital to maintaining a thriving economy, manufacturing industry, geopolitical strength, and a strong national defense.” While China may not follow through with its threat to lower critical mineral exports, hopefully this serves as a reminder that we should develop the resources beneath our feet.