Trump’s minerals opportunity

OPINION:

Despite a decade of hand-wringing in Washington about the threat posed by our alarming reliance on mineral imports and China’s dominance of key mineral supply chains, little progress has been made in confronting the challenge.

China’s control of mineral markets is tighter than ever. That’s the bottom line facing the incoming Trump administration. Of the 50 mineral commodities the U.S. government lists as essential to economic and national security, China is the top producer or supplier of more than half. And China is doubling down on its efforts to tighten its grip.

The United States is already subject to a decisive minerals industrial policy. Unfortunately, it’s not our own. China and Russia have weaponized control of the world’s mineral supply chains.

When Western producers of rare earth elements, platinum, cobalt, uranium or lithium have worked to stand up new supply and build alternative supply chains, state-backed Chinese and Russian producers have flooded the market, driving down prices, forcing U.S. mines to close and upending the economics of promising projects.

With unrivaled control of mineral supplies — far tighter than OPEC’s grip on oil — China has repeatedly reached for the mineral lever to exert influence in geopolitical spats or trade negotiations.

Each time the U.S. confronts China over trade practices — such as stealing intellectual property — or puts tariffs on Chinese products in place, Beijing retaliates with export controls on minerals we don’t produce here, although we should. The latest restrictions were on the export of antimony, a mineral used in semiconductors, batteries and weapons systems. More than 300 types of munitions require antimony, and China dominates antimony production.

How long will it be before Chinese export restrictions become embargoes at the worst possible moment? As China’s recent focus on antimony underscores, it hasn’t just zeroed in on an economic vulnerability; it’s exploiting a glaring national security weakness.

Our inability to aggressively and comprehensively address our minerals Achilles’ heel has given China enormous leverage. America’s years of half-measures must end. We can decisively recapture the mineral security we have let slip away. Ramping up domestic mineral production and processing our vast resources should be the effort’s centerpiece.

To do so, the Trump administration should build its mineral policy around coherence and coordination, permit streamlining and an aggressive response to Chinese and Russian market manipulation.

We need a central point of coordination for America’s minerals policy. The host of agencies that now oversee the minerals ecosystem not only duplicate efforts but even work at cross-purposes pursuing opposing goals. For example, efforts to offer incentives for domestic projects are finding little place to go, with proposed mines blocked and critically important mineral-rich public land removed from potential development. That must change.

We must also have a mine permitting reform that not only streamlines the mining permitting process but also reaffirms decades of mining law and precedent to provide certainty for America’s mineral producers.

Effective reform must include limits on litigation timelines that are trapping responsible projects in endless delays. A recent study of the time required to bring new mines into production found that it takes an average of 29 years for mines to go from discovery to production in the U.S., longer than any country except Zambia.

And critically, we must address the anticompetitive flood of Chinese- and Russian-controlled minerals into global markets. Targeted tariffs can be part of the answer, but more is needed to address global price suppression and manipulation. Reaching back to precedent on stockpiling strategic metals from domestic production, doubling down on tax credits for domestic producers and ensuring the supportive policies already in place — such as the 45X advanced manufacturing tax credit — work as Congress intended and deserve careful consideration. What we cannot do is continue with the status quo.

Now is the moment to level the playing field for American producers and turn our vast mineral resources into the foundation of an America First agenda. The new Trump administration can turn the tide with a decisive minerals policy that confronts Chinese mineral extortion and builds the essential domestic materials supply chains that ensure that the materials America relies on are no longer mined in China.

• Rich Nolan is president and CEO of the National Mining Association.