Global events have made significant changes to economies of various products all over the world. While tariffs and policies are being put in place, the US is also attempting to be a leader in the race for rare minerals. In years prior, Ukraine was a large supplier, but with the Russian conflict ensuing, imports from Ukraine have decreased.
US to Lead Race for Critical Minerals
On Tuesday March 4th, President Trump discussed his drive and desire to produce these minerals in in the US. He said “Later this week, I will also take historic action to dramatically expand production of critical minerals and rare earths here in the USA” in his speech to congress. With a huge rise in demand for AI and electric vehicles, it’s no surprise that the demand for critical minerals is as well. Many minerals and metals are vital to produce chips and help these products run. Akshay Dubey, CEO of VCW CleanTech, has created a technology for the production of these critical minerals. Dubey said “The entire power generation system in the United States and the expansion that is required for AI and data center buildout is extremely dependent on critical minerals.”
The US already produces a large amount of various critical minerals. Aluminum, zinc, and magnesium are all readily produced domestically. However, many other minerals, such as cobalt, nickel, and graphite are all imported. In fact, China makes up about 60% of global reserves and 85% of the global processing capacity of critical minerals. Due to Trump’s tariffs on Chinese goods, it’s no surprise that there are hopes of producing such minerals domestically. Pini Althaus, mining executive at Cove Capital said “The Chinese understood very early that critical minerals, including rare earths, are going to be the building blocks for most advanced manufacturing going forward. The US is almost 100% reliant on China on critical minerals”
Domestic Focus on Critical Metals
The Biden administration focused some time on improving the mineral supply chain within the US. Since the US relies so much on China, the domestic supply chain is not very strong. It can take more than 15 years to turn a deposit into an operating mine to extract these minerals. Dubey certainly isn’t happy about this. He said “The frustration for industry and the challenge for industry has been no clear path to permitting…If you’re sitting as a CEO of one of these [mining] companies and you have to make a decision of whether to start investing the capital, you don’t want to be in the situation where halfway through construction you have a new administration come in and they challenge the permits.”
While the US may be hesitant to import Chinese minerals, imports may come in from Ukraine. Volodymyr Zelensky, leader of Ukraine, said that the country is “ready to sign” a minerals agreement with the US. According to the United Nations, Ukraine holds about 5% of the world’s critical mineral reserves. That large supply of graphite, lithium, titanium, and uranium may be helpful for the US to at least have some supply without steep tariffs from China.
Featured Image Credit: Vlad Chețan; Pexels: Thank You!
