In upstream resources, US critical mineral capacity remains critically inadequate, China buys up Indonesia’s cobalt, and what are the prospects for made in USA uranium? Plus, US GDP grows, but that big picture figure belies pain under the surface, crumbling tech players, and stalled manufacturing. And, of course, a market bloodbath in China.
The 2022 US Geological Survey published data on 32 critical minerals. Of those, the US is more than 50 percent import dependent for 26, or 81.25 percent. And China is the top source of US imports for 11. This constitutes a dangerous vulnerability. Critical minerals are necessary, limited, and in many cases consolidated inputs into modern industry. And the US lacks domestic or trusted sources of many of them. Rare-earths are the well-worn example: Those are necessary inputs across defense and commercial applications; the US is 90 percent import dependent for rare-earths and sources 78 percent of its imports from China. But rare-earths are just one case. Take graphite, a critical material for battery production. The US is 100 percent import dependent for graphite – and China controls some 82 percent of the market.
Critical minerals for which US import dependence is at least 50%
The consequences of this dependence are poised only to grow. Look, for example, at today’s energy transition. According to the International Energy Agency’s latest annual World Energy Outlook report, global fossil fuel use is set to peak in just a few years – in large part as a result of Russia’s invasion of Ukraine, which the IEA’s executive director has called the “first truly global energy crisis.” But China dominates the mining and processing of many key minerals that clean energy technologies require (and also controls vast market shares in the manufacturing of solar panels, wind turbines, EVs, and batteries).
What happens to US, and global, energy security in a world where Beijing controls the critical materials on which energy production – and modern industry – depend? Russia’s invasion of Ukraine is making painfully clear the danger of relying on an adversary for resources. If the US doesn’t resolve its critical mineral problem, it risks cementing reliance, and greater reliance, on a different, more dangerous adversary.