Scarce Strategic Mineral Alternative Sourcing Likely To Leave US Supply Chain At Risk Over Next 3-5 Years

Key Findings:
Due to lack of alternative strategic mineral sources, susceptibility to supply chain vulnerabilities likely to persist in next 3-5 years:

The biggest risk the US faces is likely supply chain vulnerabilities:

• US imports 80 percent of all strategic minerals.
• US imports 28.4 percent of strategic minerals from China.
• Strategic minerals highly likely to remain essential for key industries, including defense, electronics and energy.
• National mining likely presents opportunity to reduce import dependence.
• One US company currently pursuing strategic mineral mining in the Arctic.
• Legislation to quicken mine opening unlikely to pass Congress.

Arctic likely opportunity to reduce dependence:

• US abuts Arctic region, allowing for undisputed access to resources.
• US federal government issued call to explore Arctic region for strategic minerals.
• China is likely to continue expanding its mining operations outside its mainland to include Africa and the Arctic.
• Greenland, with growing access due to ice shelf melt, is likely an opportunity for domestic mining; however, little is being pursued presently.

Law enforcement highly likely most at risk:

• Dependent on businesses and federal government for critical supplies, making its supply chain likely at high risk for potential disruptions.
• State-by-state legislation likely impedes proactive, unified response to supply chain risk.
• Metal theft likely to remain top strategic mineral priority for law enforcement.

About This Document:

The eleven students of the Collaborative Intelligence class assembled this document. Students researched and analyzed findings over the 2012 autumn term at Mercyhurst University. The class split into three teams with each team responsible for a specific topic. Four students were assigned to research national security issues, four were assigned to research business issues, and three students were assigned to research law enforcement issues. All three teams were tasked to answer the following question: “What are the likely US national security, business and law enforcement implications over the next 3-5 years of trends in critical or strategic minerals?” Teams collaborated to establish definitions and create a list of “critical strategic minerals.”

 

This report identifies the following as critical and strategic minerals for US national security, businesses, and law enforcement:

• Antimony
• Aragonite
• Arsenic (trioxide)
• Asbestos
• Barite
• Bismuth
• Calcite
• Cesium
• Chalcocite
• Chalcopyrite
• Chromium
• Cobalt
• Copper
• Gallium
• Germanium
• Gold
• Indium
• Iodine
• Lithium
• Magnesium metal
• Manganese
• Nickel
• Niobium
• Nitrogen (fixed),
• ammonia
• Peat
• Perlite
• Phosphate rock
• Platinum-group metals
• Potash
• Quartz crystal
• (industrial)
• Rare earth elements
• Rhenium
• Rubidium
• Scrap
• Selenium
• Strontium
• Tantalum
• Tellurium
• Thallium
• Thorium
• Tungsten
• Vanadium

Overall analytic confidence is moderate. All groups agreed on moderate analytic confidence for each set of group findings. Source reliability varied from medium to high, and sources could be successfully corroborated.

This book is a summary of a ten-week graduate class examining strategic mineral use and implications for US business, national security, and law enforcement. The project is the culmination of the research, along with the estimative findings, of the 11 second-year Intelligence Studies, Collaborative Intelligence (INTL 650) class in the Fall, 2012. It can be viewed and/or downloaded as a PDF from the link below. Scarce Strategic Mineral Alternatives Likely To Leave US Supply Chain At Risk Over Next 3-5 Years

Soon Businesses Will Be Required To Disclose Where Their Minerals Come From

DEMOCRATIC REPUBLIC OF THE CONGO (LOS ANGELES TIMES) -- New regulations in the U.S. could see publicly traded companies have to state whether or not their mineral purchases are directly funding conflicts in the Democratic Republic of the Congo or neighboring countries. However, despite it's good intentions, there are activists and businesses that are questioning the effectiveness of the legislation.

Money from mineral exports is directly
 funding DRC militia groups

The law will require that publicly traded companies state whether they use minerals from the troubled region, as well as assessing whether their minerals are 'DRC conflict free'. Activists focused on the conflict believe that naming and shaming the bigger corporations using this law may lead to them ceasing in their activities. The U.S. Chamber of Commerce has questioned how costly and effective these laws will be, stating that cutting off one source of revenue won't stop militias from fighting.
There are also huge flaws in the currently proposed legislation. Whilst the DRC is synonymous with government troops and rebels involved in mass slayings and rape, some companies will be able to disassociate themselves with the minerals and legislation as they do not directly make/mine the product. This will let many big brands off the hook as they merely stick a label on a product and sell it, rather than mining it themselves and facing the legislation.
Legitimate US companies in Africa could be harshly affected by this. The SEC estimates that the overall cost of this legislation could escalate to as much as $4 billion. Many companies may cease to do business in Congolese minerals. The biggest question remaining is how will this new legislation affect businesses and the conflict itself, once it is put into place?
Source: New Regulations Seek To Expose Congo Conflict Minerals (Reliability: High)

Comment: Businesses in the US could suffer dramatically if this legislation is put in place. With the SEC estimating losses at $4 billion and the U.S. Chamber for Commerce putting that figure between $8 and $16 billion, this is a huge move that may punish businesses without necessarily fixing the bigger issue of militia and DRC conflict.

Due To China's REM Dominance, U.S. Businesses Highly LIkely To Push For Alternative Sources Of Rare Earths In The Next Three To Five Years

Robert F. Kennedy, Jr. and CRS CEO, John Yob
on Creative Recycling's E-Scrap Processing System

Executive Summary:
Due to the expanding use of rare earth minerals (REM) in U.S. industry, is highly likely that improved sustainability and availability measures need to be implemented. Because REM are 100 percent imported, it would be prudent for the United States to reopen its mining operations for use in, among other areas, manufacturing of high technology, alternative energy, and defense applications.  It is also advisable to invest in research to find substitutes and sustainability measures for REM since they are a finite resource.

Discussion:
Environmental and policy factors in the U.S. have allowed China to maintain a stranglehold on the REM mining industry. In June of 2010, the Rare Earth Supply Technology Resources Transformation (RESTART) Act was introduced to promote domestic rare earth production. However, the National Mining Association stated that although the United States has $6.2 trillion dollars of mineral resources, it has the slowest permitting processes in the world for new mines, taking from seven to ten years. Recently, the Metal Service Center Institute suggested that simplifying and reducing taxes, less strict regulations that still protect the environment, and improved energy policy would likely improve the availability of REM from domestic mining. According to Forbes, North America is finally waking up to the consequence of China’s REM monopoly and has invested money and resources to domestic mining. Additionally, a new and steady source of domestic REM mining would likely revive the U.S. manufacturing sector, adding jobs while reducing dependence on China.

Currently, REMs are used in conjunction with many other scarce elements to create everything from glass/lcd (indium and erbium; lanthanum and gallium), to light-emitting phosphors (terbium and indium; terbium and gold; terbium and niobium; terbium and lithium; lutetium and indium), to fine wire for electrical conductors (lanthanum and tungsten; lanthanum and gold), to wavelength amplifiers for fiber optics (lanthanum and gallium; terbium and tantalum; erbium and germanium; lutetium and germanium), to permanent magnets (terbium and vanadium; terbium and cobalt; samarium and cobalt). Clean energy industries employ REMs as catalysts for cleaning diesel emissions (lanthanum and thorium) and in (lanthanum, beryllium and indium).

The United States Geologic Survey (USGS) is conducting national mineral resource assessments, but these studies are time consuming and expensive. Several North American ventures have begun extracting and processing REM, including Orbite Aluminae and Molycorp. In addition to current mining operations, the need to find substitutions and sustainability measures is likely critical to short-term REM independence. Creative Recycling Systems, Inc. and GreenRock Rare Earth Recovery Corporation announced a joint venture, and will be recycling rare earth minerals found in consumer electronics, magnets and batteries. REMs are suitable for recycling because they do not degrade with use, and the elements are actually found in higher concentrations in used products than from original ores. The growth of the sustainability market will likely lessen China’s stranglehold on the REM market.

Analytic Confidence:
The analytic confidence for this estimate is medium. Source reliability is high and sources did corroborate. The analysts’ expertise is medium and the analyst worked in a team. Subject complexity is high and the time available for the task was adequate. Structured analytic methods were not used.

Methods And Processes:
Our plan for completing this assignment was to utilize Google Docs to create the SFAR and as a collaborative tool, using the comments and chat functions. In addition, we would telephone each other if further discussions were needed. We planned to use Zotero for accessing research and saving new resources. Finally, we would publish the document on the Strategic Minerals blog using Blogger.

Google Docs worked well for collaborating and compiling the document. Our initial idea for the SFAR did not hold up once research began so we had to work through how to change our focus. We were able to define a new process using Gmail and Google Docs. From there, we worked independently writing the document while collaborating on the final version.

Authors:
Karen Omniewski, email, Google+, Twitter
Leslie Guelcher, email, Google+, Twitter

Yttrium Needle Is The Future Of Injections

Erbium doped yttrium aluminum garnet
(Er:YAG Laser)

WASHINGTON (BUSINESS WIRE) -- A laser-powered needle will make flu-shots and any type of injections painless. Microscopic sets of drugs will be blasted into the skin and could make getting a shot similar to being 'hit with a puff of air'. The system uses an yttrium/aluminum compound laser to propel a tiny and precise stream. This type of laser is traditionally used by dermatologists.
Despite other competitors being able to do this mechanically, this method can precisely control the dose and the depth to which the drug is administered. The next step is to produce low cost injectors for clinical use. In the future it may be possible to administer this method to children for mass vaccine injections - pain free. Source: Laser Powered Needle Promises Pain Free Injections (Reliability: Medium)

Comment: Yttrium's uses continue to grow and as a mineral in high demand, it will become more important in the US business sector. With such reliance on this mineral and little in the way of replacements/alternatives - yttrium will continue to be central to the tensions over rare-earths and minerals. Sources of this mineral will be much coveted and fought over in the next 3-5 years.

China To Stockpile Germanium

Major end uses for germanium include applications
in optics, polymerization, and electronics.

HONG KONG (Reuters)--According to the Fanya Metal Exchange, the Chinese state buyer has sent purchase notices to China's four leading producers of germanium, Yunnan Germanium, Yunnan Chihong Zinc & Germanium, Shenzhen Zhongjin Lingnan Nonfemet, and China Germanium Company Ltd. Fanya has no information on how much the state buyer will purchase, or when. Sources claim that a deal in June between Yunnan Germanium and energy company Hanergy tightened international supply, and experts predict that state purchases will drive the prices up further. Source: China's state buyer to stockpile germanium (Reliability: High)

Comment: Although substitutes exist in optics and electronics, germanium remains the most economic and efficient choice. If the Chinese government's purchases of germanium are significantly large, the price of germanium in international markets will almost certainly rise, causing a ripple effect in relevant industries.

Canadian Group Working To Increase Transparency In Mining And Exploration

Mines such as this Cricket Resources mine in
Canada provide the US with  critical minerals.

OTTAWA, CANADA (Mining Association of Canada)--On September 6, 2012, a working group of Canadian national-level mining and exploration associations and transparency-focused NGOs announced it has signed a Memorandum of Understanding to improve Canada's transparency in extractive company payments to governments. The group intends to develop a framework for disclosure of payments for Canadian oil and mining companies by June 2013. There is currently no mandatory framework in place in Canada, although many companies participate in voluntary reporting such as EITI. Involved parties state that this working group's collaboration will likely allow citizens, investors, and communities "achieve accountable, responsible and sound management of natural resources." Source: Canada's mining industry joins forces with NGOs to improve transparency (Reliability: Moderate)

Read more here: http://www.sacbee.com/2012/09/06/4792762/canadas-mining-industry-joins.html#storylink=cpy

Comment: As the US is 100 percent import-reliant on Canada for such critical minerals as Cesium and Rubidium (Source: USGS), an increase in transparency among Canadian sources would almost certainly improve the risk analysis capacity of American officials and investors.