Strategic Materials –
Materials alone do not equate to power. Power arises from the possibility of turning materials into technologies and, ultimately, capabilities. These especially important materials are strategic or critical materials. Strategic Materials include minerals, metals, and byproducts, which are domestically and globally traded commodities. Prior to 2018 and because a material’s value is in the eye of the beholder, organizations with the U.S. Government (USG) had individual lists of minerals critical to each agency’s mission. Furthermore, the priorities of critical materials shift periodically depending on technology, research and development (R&D), and available reserves. Executive Order 13817 defines critical materials as those nonfuel minerals that are essential to the economy, while strategic minerals are those used in defense applications. Both are characterized by supply chains that may be vulnerable to disruption and the absence of which could have grave consequences for national security or the economy.
Americans born in 2013 “will consume three million pounds of minerals, metals, and fuels over [their] lifetimes.” Iron ore makes steel for planes, trains, automobiles, and buildings. Copper is used in electronic parts, electricity infrastructure, and plumbing. Rare earth elements (REE) are critical for cell phones, flat-screen televisions, batteries for electric vehicles, and magnets for wind turbines. Domestic mining is, indeed, critical to the U.S. economy. In 2019, domestic mining produced about $86.3 billion in raw materials. These raw materials were then consumed by several downstream industries (e.g., defense and construction), which added about $3.13 trillion in value to U.S. gross domestic product (GDP) in 2019 ($21.43 trillion).
As a result, the defense sector competes with the commercial sector for the same critical minerals. The importance of these two vectors stimulates the U.S. to secure a secure supply of critical minerals. (See Appendix II for supply chain risk essay.) Although the country is rich with mineral resources, it is reliant on the import of many of the critical minerals from countries such as China, Chile, Australia, and the Democratic Republic of the Congo. (See Appendix III for U.S. import reliance chart.) The goal is to reduce if not eliminate the vulnerability to disruption of the critical minerals’ supply chain: “[O]ur nation’s mission [is] to reduce our vulnerability to disruptions in the supply of critical minerals. Any shortage of these resources constitutes a strategic vulnerability for the security and prosperity of the United States”
Moreover, in the area of critical minerals, the United States, China and much of the rest of the world are today – to paraphrase Joseph Nye and Robert Keohane – stuck in an international relationship defined by interdependence. The sum total of our international transactions – the flow of goods, resources, money, and so on – is such that we are beyond interconnected, a situation where we engage in the exchange but are free to act independently without significant cost, but instead we are interdependent because the exchange leaves us in a situation of mutual dependence. Neither side can act independently. We depend on China to process rare earths and other strategic materials. China depends on us for markets in which to sell Chinese-made goods, access to capital, and technology.
The U.S. is cooperating with two allies to mitigate the strategic vulnerability of its critical mineral supply chain. First, the U.S. and Canada launched the U.S. - Canada Critical Minerals Action Plan in January 2020, dedicated to “securing the supply of critical minerals for strategic industries and defense; improving information sharing on critical mineral resources; engaging with the private sector; and working together in multilateral fora and with third countries.” Defense funding for critical minerals projects, and strategic investments in North American processing facilities, were reported to be key parts of the joint plan.
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