Strategic Materials: –
In the case of military aggression by the People’s Republic of China (PRC) against Taiwan, economic shockwaves would ripple across the Pacific. How can the U.S. prepare America’s defense industrial base for this contingency? The answer begins with ensuring access to strategic materials – the essential elements that form the foundation of the modern economy. Since the end of the Cold War, the PRC has cornered the market on a wide range of minerals and downstream processing that converts ore into modern life’s building block materials. More troubling, the PRC has also demonstrated a willingness to flex its power by temporarily cutting off exports of strategic materials to America’s partners and allies, as it did with rare earth elements in 2010 and threatened to do in 2017.
The PRC’s strategic material dominance is vast and growing. According to a 2023 estimate, the U.S. is more than 50 percent reliant on imports from China for 20 critical minerals. These materials underpin nearly every aspect of the U.S. economy, including the automobile and aviation industries, green energy technologies, and the defense industrial sector. Although vulnerable, America is not without resources.
The mineral-rich landscape of the U.S. holds untapped potential that can help the nation even the playing field with the PRC. Multinational companies are eager to tap into those resources and build processing facilities to convert minerals into engineering inputs. Still, challenges remain. The lack of domestic supplies creates a strategic vulnerability vis-à-vis our peer competitors. Moreover, the economics of the mining industry often prove insurmountable. Even when the financial rewards justify the cost, prospective companies must navigate a lengthy permitting process while simultaneously winning buy-in from local stakeholders and addressing environmental concerns. As a result, critical resources remain trapped in the earth, and the PRC continues to hold the sword of Damocles over American industry.
The following analysis recommends a comprehensive strategy anchored on three pillars, Protect, Promote, and Partner, to meet this challenge and secure America’s strategic materials supply chain:
- Protect means replenishing America’s stockpiles of strategic materials to reduce our short-term dependence on the PRC; unifying a stove-piped federal management system for mining into a streamlined, unified approach consistent with national security goals; and mapping supply-chain dependencies to understand better the source of the minerals and materials that are essential to American society.
- Promote includes recommendations to revitalize America’s mining production and processing capabilities, update an outdated permitting process, and raise public awareness about the importance of mining to national security.
- Partner consists of teaming with allies to secure our supply chains, strengthen the strategic material value chains of developing nations worldwide, and disrupt ethically questionable PRC partnerships.
Effectively addressing this challenge requires government-wide unity of effort. While there have been some attempts at interagency coordination, those attempts have lacked the authority to impact resounding change. These actions require time to mitigate industry-crippling risk and prepare for aggression in the Pacific. The time to act is now.
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