The US government created the critical minerals list to understand US vulnerability to disruption in global supplies of minerals and metals critical to industry, the economy, and national security. The 50 materials being monitored underpin all of modern life and have come under greater scrutiny due to their widespread use in semiconductors and decarbonized electric power systems as well as China's dominant position in mineral supply chains.
But the sheer size of the list may be hampering the very strategic thinking it was designed to inform. The Biden administration now needs to prioritize minerals that are mission-critical for national defense applications and for reducing the risk of supply chain disruptions. This may mean placing less emphasis on electric vehicle (EV) battery minerals that dominate headlines and more on the lesser-known rare earth and minor minerals that support national security applications.
The US Geological Survey (USGS) assesses mineral criticality by evaluating economic vulnerability of important yet low-margin industries like auto parts and consumer and office electronics—and supply disruption potential, or the degree to which production is concentrated either in countries that might stop exporting for political reasons, be it leverage or domestic instability, or in a tiny number of facilities.
The US critical minerals list is too long and impractical for a coherent strategy
The US critical minerals list contains 50 elements, 45 of which are also considered strategic minerals of interest by the US Defense Logistics Agency (USDLA), the arm of the Department of Defense that manages US global defense supply chains. The USDLA list also includes another 17 materials not defined as critical minerals, including boron, copper, lead, and molybdenum.1 These lists reflect the United States' increased reliance on offshored mining and mineral processing, with much of that offshore capacity located in China or controlled by Chinese firms.
Trying to craft a coherent critical minerals strategy to cover 67 different ores and alloys is impractical. As the saying goes, if you have more than three priorities, you have no priorities. US resources should prioritize reducing risks for those minerals that are both critical for national and energy security and where smaller investments can yield large improvements in terms of exposure to trade- or single supplier-based disruptions.
The USGS and USDLA lists include minerals with vastly different market structures and thus implications for a derisking strategy. Global production of bauxite, the chief ore in aluminum, was 380 million metric tons (MT) in 2022, spread across Africa, the Americas, Asia, Europe, and Oceania. According to the USGS, potential global resources are "essentially inexhaustible." Bauxite meets the relevant US critical mineral thresholds for inclusion, but the diversified nature of global production and refining makes it a comparatively unlikely candidate for weaponization.
But the lists also include gallium, global production of which was only 550 metric tons in 2022. China accounted for 98.1 percent of that production—a point underscored by China's announcement of export restrictions on gallium and germanium on national security grounds, which went into effect August 2023. This move was a tit-for-tat response to US export controls on some semiconductors that are among the downstream products for which gallium is an input.
Based on 2022 benchmark Chinese market prices, the total value of the global raw low-grade gallium market was between $187 million and $280.5 million.2 Yet its refined products, particularly gallium nitride (GaN), are used extensively in modern radar arrays, satellite communications, and improvised explosive device (IED) countermeasures.3 Critical mineral status is conferred on both widely produced, traded, and used commodities and much more boutique minerals with leading-edge national security applications. This situation calls out for prioritization.
Prioritizing minerals that are mission-critical and at acute risk of supply disruptions can deliver big payoff
Obviously, while it would not behoove the Department of Defense to be completely transparent about where it believes its most critical mineral supply chain vulnerabilities reside, policymakers in the Departments of Commerce, Energy, Interior, and State as well as the US Agency for International Development (USAID) need guidance regarding priority materials and ore-rich geographies to target for developing resources.
This process should also include coordinating with like-minded countries. The United States shares these vulnerabilities with many of its closest allies and trading partners, including many members of the European Union as well as Japan and South Korea. The Minerals Security Partnership and the Group of Seven (G7) are potential vehicles for coordination and avoiding duplication: G7 members do not need seven independently de-risked supply chains for gallium—they need one or two.
That process—perhaps jointly conducted by the USGS and USDLA—should include identifying those materials where a marginal investment can deliver a big payoff. Such marginal investments in comparatively smaller, thinner critical mineral markets can reshape these strategic supply chains more quickly than investments in much larger, widely traded commodities. Most gallium is recovered as a byproduct of refining bauxite into alumina. China's share of global alumina production (54.2 percent) is much lower than its share of global gallium production (98.1 percent), suggesting that the United States, Australia, Canada, and other countries that already produce alumina could produce more raw gallium themselves and eliminate this source of strategic vulnerability.
What about EV battery minerals, particularly cobalt, lithium, manganese, and graphite? By comparison, markets for these materials are significantly larger than for raw gallium but much smaller than the global aluminum market. But Chinese interests control global value chains to a greater extent than widely cited—and large—figures on Chinese production and refining capacity would indicate. So, the potential for supply disruption is real, though not as acute as for more boutique minerals like gallium and germanium.
Battery minerals are by definition central to Biden administration plans to turn the United States into an EV powerhouse, though sourcing battery minerals from countries eligible for the Inflation Reduction Act's tax credits remains a challenge. Battery minerals are a political priority, perhaps to a degree unwarranted by the logic of the US critical minerals list. In order for the United States to start crossing minerals off the critical list, it needs to put effort where vulnerabilities are most severe and marginal dollars will yield the largest benefits.
1. The 17 additional materials are aluminum-lithium alloy, beryllium copper master alloy, boron, cadmium, cadmium zinc telluride, copper, ferrochromium, ferromanganese, lead, mercury, molybdenum, quartz, rhenium, rubber, selenium, silicon carbide, and strontium (DLA Materials of Interest, accessed June 1, 2023).
3. Not all (or even most) GaN uses are in aerospace and defense. Blu-ray technology is named for the 405nm blue GaN laser that allows much denser encoding of information and thus higher definition than the 650nm red laser used in DVD players.
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