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How the U.S. Is Working to Secure Its Critical Minerals Supply Chain

adminNovember 5, 2024

In last week’s post, we explored why the U.S.is vulnerable when it comes to critical minerals. This week, we’ll discuss what the U.S. is doing to change that. 

The Biden-Harris Administration recognizes the growing threat of critical mineral supply concentration, noting in a September 20 Fact Sheet that “Over the past several decades, China has cornered the market for processing and refining of key critical minerals, leaving the U.S. and our allies and partners vulnerable to supply chain shocks and undermining economic and national security. …” and citing a long list of initiatives to address it. 

Congress and others have also been working to create change in this context, as noted by the following new initiatives and bills — which offer just a glimpse of the many efforts in play from which the U.S. can benefit to secure its critical minerals supply chain. 

Minerals Security Partnership 

The Minerals Security Partnership (MSP) is a collaboration of 14 countries and the EU to “catalyze public and private investment in responsible critical minerals supply chains globally.” 

According to the U.S. Department of State, the MSP “aims to accelerate the development of diverse and sustainable critical energy minerals supply chains through working with host governments and industry to facilitate targeted financial and diplomatic support for strategic projects along the value chain.”

MSP partners include Australia, Canada, Estonia, Finland, France, Germany, India, Italy, Japan, Norway, the Republic of Korea, Sweden, the United Kingdom, the United States, and the European Union (represented by the European Commission). 

On March 4, these partner governments issued a statement following the conclusion of the Minerals Security Partnership Principals’ meeting in Toronto, detailing the work conducted during their time together — including a meeting with several countries from the Western Hemisphere, including Argentina, Brazil, Chile, Jamaica, Mexico, and Peru, to “discuss critical mineral supply chains, project development, and opportunities and challenges in mining, as well as in midstream and downstream processing.”

According to the statement, the MSP partners confirmed during the meeting that they are “working to advance the following projects that have a high potential to contribute to the development of responsible critical mineral supply chains, demonstrate high ESG standards, facilitate the global energy transition, and are collaborating with relevant governmental or financial agencies of MSP partners.”

Across the 23 MSP projects:

  • 16 projects involve upstream mining and mineral extraction, 7 involve midstream processing, and 7 involve recycling and recovery.
  • The projects cover cobalt, copper, gallium, germanium, graphite, lithium, manganese, nickel, and rare earth elements.
  • 6 project sites in the Americas, 5 project sites in Europe, 13 project sites in Africa, 3 project sites in the Asia-Pacific region.

“In addition to the above projects, the MSP is continually assessing potential investment opportunities across all eligible markets that would support diversification of critical mineral supply chains and development of the associated infrastructure,” the statement noted. 

Minerals Security Act

On March 14, Representatives Chrissy Houlahan (D-PA), Rob Wittman (VA-01), Raja Krishnamoorthi (IL-08), and Mike Waltz (FL-06) announced the introduction of the Critical Minerals Security Act.

“This legislation will direct the collection of comprehensive data on global holdings and exchanges of critical minerals,” the press release said. “Providing this data to the United States, our allies, and international businesses will empower entities to effectively counter potential threats from foreign nations. More importantly, the legislation requires the Secretary of the Interior to create processes to aid U.S. companies interested in establishing alternative partners to source their critical minerals, safeguarding American interests and our national security.”

The Senate companion bill is led by Senators John Cornyn (R-TX), Mark Warner (D-VA), Angus King (I-ME), Todd Young (R-IN), and James Lankford (R-OK).

Critical Minerals Policy Working Group

On June 18, Chairman John Moolenaar and Ranking Member Raja Krishnamoorthi of the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party announced the formation of the Select Committee’s Policy Working Group focused on countering the Chinese Communist Party’s control of critical mineral supply chains. 

The Critical Minerals Policy Working Group will be led by Rep. Rob Wittman (R-VA) and Rep. Kathy Castor (D-FL). Reps. Blaine Luetkemeyer (R-MO), Haley Stevens (D-MI), Carlos Gimenez (R-FL), Ritchie Torres (D-NY), and Ben Cline (R-VA) will also serve on the Critical Minerals Policy Working Group. 

“This Policy Working Group (PWG) will be a small group of Select Committee members charged with producing legislation and spreading awareness through Committee events to counter the CCP’s dominance of critical minerals,” the announcement said. “This work will start immediately and will build upon the Select Committee’s December report, Reset, Prevent, Build: A Strategy to Win America’s Economic Competition with the Chinese Communist Party, which “outlined a strategy to fundamentally reset the United States’ economic and technological competition with the People’s Republic of China, and drew attention to American reliance on Chinese critical minerals.”

The announcement said that specifically, the Critical Minerals Policy Working Group will “work to create transparency into U.S. supply chain dependency for critical minerals and develop a package of proposed investments, regulatory reforms, and tax incentives to reduce that dependency.”

Intergovernmental Critical Minerals Task Force Act

On September 19, the U.S. Senate unanimously passed the Intergovernmental Critical Minerals Task Force Act, bipartisan legislation authored by U.S. Senators Mitt Romney (R-UT), Gary Peters (D-MI), and James Lankford (R-OK), that would reduce the United States’ reliance on China and adversarial nations for critical minerals,” according to the press release. The legislation, which was introduced in June 2023 and passed out of the Homeland Security and Governmental Affairs Committee (HSGAC) later that month, now heads to the House for consideration.

“China is currently the largest source for more than half of the critical minerals on the U.S. Geological Survey’s 2022 list that the United States imports, such as lithium and cobalt,” the statement noted. “The senators’ bill addresses the threat to our manufacturing supply chains by creating an intergovernmental task force to identify opportunities to increase domestic production and recycling of critical minerals.”

Minerals Security Partnership Finance Network 

On September 23, the Governments of the United States of America and Australia, Canada, Estonia, Finland, France, Germany, India, Italy, Japan, the Republic of Korea, Norway, Sweden, the United Kingdom, and the European Union (represented by the European Commission) issued a joint statement announcing the formation of the MSP Finance Network.  

“This network will strengthen cooperation and promote information exchange and co-financing among participating institutions to advance diverse, secure, and sustainable supply chains for critical minerals,” the statement said, underscoring the need for a team effort among the public and private sectors to address the “scope and scale of meeting the rapidly increasing global demand for critical minerals to achieve the clean energy transition…”

Key points addressed regarding the creation of the MSP Finance Network include:

  • Its formation “reflects a desire to strengthen information sharing, coordination, and collaboration among the network participants.”
  • Working together in this way will “drive sustainable investment in global critical mineral supply chains, including by mobilizing private sector capital, in production, extraction, processing, recycling, and recovery projects.”
  • Participants also “affirmed their commitment to advancing critical mineral projects that are sustainable and adhere to high environmental, social, governance, and labor principles and promote local value creation, with a clear and measurable positive development on local economies and communities.”

For a list of Network participants and milestones related to MSP projects, please see the statement.

Critical Minerals Future Act

On September 27, U.S. Senators John Hickenlooper, Lindsey Graham, Chris Coons, and Todd Young introduced the bipartisan Critical Materials Future Act to “establish a pilot program for the Department of Energy to financially support domestic critical mineral processing projects,” according to the press release.  

Specifically, the Critical Materials Future Act grants the Secretary of Energy the authority and funding to deploy “innovative financial mechanisms, such as contracts for differences and advanced market commitments, to support critical material processing projects in the United States.” The bill also requires the Secretary of Energy to “conduct a comprehensive study on the impact of these financial tools on market dynamics and processing projects within the critical materials sector, and to provide recommendations for expanding their use to strengthen America’s processing capabilities.”

The new initiatives and legislation described here are just a few of the many efforts underway to help secure America’s critical minerals supply chain. For additional information, please check out the following resources:

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