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

China Pursuing Arctic Mineral Riches

NUUK, GREENLAND (New York Times)--Although China does not currently hold any Arctic territories, it is deploying its wealth and diplomatic clout to secure a foothold. The country sees its involvement as important so that it is not shut out of mineral and shipping decisions. The Arctic region has risen rapidly on the country's foreign policy agenda: this year alone diplomats have visited Denmark, Sweden, Iceland, and also Greenland, where Chinese companies are investing to create a mining industry. Retreating of Greenland's ice cap has made accessible deposits of many valuable minerals; so far there has been little exploitation of Arctic resources. Greenland's proximity to the US is also of concern to American officials, who have accordingly stepped up diplomatic efforts with Arctic countries. Source: China Joins Nations Seeking Treasure in Warming Arctic (Reliability: High)

Comment: If China is successful in establishing a significant presence in the Arctic region, the supply of critical minerals such as cobalt and rare earth minerals, over which China already holds considerable control, will almost certainly become more skewed in favor of the Chinese. Furthermore, in light of the recent flare-up of the Senkaku (Diaoyu) Islands dispute with Japan, China will highly likely double its efforts to gain Arctic territory, and its scramble for Arctic territory will likely be a source of diplomatic tensions among prominent nations.

Despite International Research, Thorium Fluctuations Unlikely To Threaten U.S. Nuclear Power Supply Over Next 3 To 5 Years

Executive Summary:
It is unlikely that thorium will threaten United States national security by way of critical infrastructure over the next three to five years. Key factors include lack of advantages over uranium nuclear power, minimal domestic demand, and the abundant thorium reserves in the U.S.

Discussion:

Countries such as India and China are
conducting research with molten salt
reactors, technology the US developed
over 40 years ago.

Thorium nuclear power is not significantly better than uranium power. Solid thorium reactors are comparable to uranium reactors in terms of waste, vulnerability, and efficiency. Numerous countries are currently conducting research on molten salt reactors using thorium, but these reactors lack real-world testing and are not commercially ready. Although the molten salt method poses advantages over traditional systems, the U.S. has discarded it. Experts say that proponents overstate the advantages, suggesting a switch to thorium nuclear power is not economically viable.

Thorium currently is of limited value to the U.S.  In 2009, the U.S. spent USD 150,000 on thorium imports, suggesting there is little interest in using the mineral. Thorium nuclear reactors create no weapons-grade byproducts, and thorium is less versatile than uranium. 

Experts estimate that the U.S. holds 8 percent of the world’s total thorium reserves. The U.S. has two high-grade thorium resources in the west. More than ten states also have reserves of a lower grade content of thorium. These deposits are highly exploitable if needed and cover 13 separate regions of the country.

Analytic Confidence:
Analytic confidence for this assessment is medium. Source reliability ranges from medium to high. Sources could be corroborated. Analysts were of low expertise and worked as a team of two. The subject is highly complex. Time available for the task was adequate.

Methods And Processes:
Analysts communicated via Gmail and Google Docs to share independently collected sources, information, ideas, and to create the document. Analysts continued to develop and refine the document  as they found more information.

With Google Docs, it was extremely easy to seamlessly alter the document, improving it and shaping it as the analysts proceeded in research. As analysts discovered further information, analysts were forced to reassess the original scope. The Google Docs chat and comment functions were of great use in facilitating easier communication.

Authors:
Sara Marinello (email - Google+)
Laura Suprock (email - Google+)

Alaska Geologists Map Locations of Strategic and Critical Minerals

Geologists mapping Alaska's rare earth elements

FAIRBANKS, AL (NEWSMINER) -- Several geologists with the Alaska Division of Geological and Geophysical Surveys, part of the Department of Natural Resources, are taking part in a $3 million state effort to create a detailed map of strategic and critical minerals, including rare earth elements, cobalt, platinum, tin, and yttrium, in order to determine their potential in Alaska.  The growing issue of rare earths to national security is causing a rush to determine Alaska's rare earth potential.  More than 95 percent of the rare earth elements are used in a variety of military hardware.  This mapping effort is aimed at kick starting in-state development of Alaska's resources.  The mapping project is already paying large dividends to the state in a new boom of resource development and a third of all strategic mineral exploration occurred in Alaska in the last two years.  Source:  Alaska Geologists Part of Effort to Map Locations of Strategic and Critical Minerals (Reliability: Medium)

Comment:  The mapping project in Alaska began last year and will continue through the end of this year and through next year. 

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.