- In a fresh bid to cut-off external dependency for critical metals, the United States President Donald Trump issues another Executive Order -13817 of December 2017.
- The dependency of the U.S.A on external supply for minerals vital for national security and economic growth makes the nation vulnerable to foreign government actions, especially Russia and China.
- Despite holding significant deposits of some critical minerals at home, the United States finds it difficult to develop a domestic supply chain.
- The plan of a strategic alliance with trade partners and allies is one of the major triggers that could boost the strategic relationship between the United States and Australia, providing a push to ASX-listed rare earth miners.
In a fresh bid to cut-off dependency on imports for critical metals supply, the United States President Donald Trump issues another Executive Order - 13817 of December 2017.
At present, the United States is majorly reliant on imports of critical minerals vital for its national security and economic growth, importing more than half of about 31 out of 35 critical minerals.
As per the recent Executive Order (or EO), such dependency of the states on external supply for minerals vital for national security and economic growth, especially due to its large implications in the blooming U.S. fracking industry and military equipment, makes the nation vulnerable to foreign government actions, especially Russia and China.
Despite holding significant deposits of some critical minerals at home, the United States finds it difficult to develop a domestic supply chain as local miners are currently limited by a lack of comprehensive, machine-readable data concerning topographical, geological, and geophysical surveys.
In a bid to bring the local rare earth supply to life, United States Senator Ted Cruz proposed legislation to provide tax rebate and other benefits to the local rare earth mines developers and manufactures.
Actions to be Taken
As per the recent directives from EO, the Federal Government would constitute a strategy to reduce the external exposure for lessening the vulnerability of the states on the external supply. The policy adopted by the Federal Government for the same is as below:
Once the Secretary of the Interior publishes a list of critical minerals, the Secretary of Commerce, in coordination with the Secretaries of Defense and other concerning departments would submit a report to the President within 180 days.
Some of the features of the report, that would be landing at the Oval Office are as below:
- A strategy to reduce external dependency for critical minerals.
- Options for accessing and developing supply chain via investment and trade with allies; and,
- A plan to improve the topographic, geologic, and geophysical mapping of the United States, ensuring electronic availability of data to local miners and producers to the extent permitted by law.
- Also, the report would present an assessment of progress toward developing recycling and reprocessing technologies for critical minerals while touching upon recommendations to streamline the leasing and permitting process.
What’s in For Australian Miners
The plan of a strategic alliance with trade partners and allies is one of the major triggers that could boost the strategic relationship between the United States and Australia, providing a push to ASX-listed rare earth miners.
However, one problem that both the nations currently are facing is the limitation of technology available to economically extract the local resources of critical minerals.
While both the nation faces one common problem and their development strategy also somewhat looks similar, the recent agreement between GeoScience Australia and its counterpart the United States Geological Survey (or USGS) could better quantify the global supply of critical minerals.
Apart from that, the states have a solid trade relationship. At the international roadshow, approach of the Morrison government to attract global investment in the critical mineral space could further fan a strategic alliance between both the nations.
To Know More, Do Read: Rare Earth Elements Tug-of- War- Why U.S. Is Looking Towards Australia
Recently, ASX-listed Lynas Corporation Limited (ASX:LYC) signed an agreement with the pentagon. This is a testimony to the brewing opportunity for Australian miners.
To Know More, Do Read: Lynas And Pentagon Ink Contract for In-Situ Development of a REO Separation Facility
In a nutshell, the United States now seems to go all-in to reduce external dependency for rare earth minerals, especially as a majority of its supply is currently being controlled by Russia and China.
In a bid to do the same, the United States President Donald Trump has issued Executive Order 13817 of December 2017 that would majorly focus on internal strategy, reporting to the President, and rollout of a plan, to reduce the external dependency for rare earth metals.
Furthermore, more than the external dependency, the application of rare earth metals into the economic and defence space is one of the most important factors surfacing behind the urgency of the U.S to develop its own supply.
However, at present, the U.S has multiple challenges in doing so, which keeps the economic prosperity and defence of the country vulnerable to external decisions.
While developing the local supply chain is one of the most prominent solutions to address the status quo, developing a strategic alliance with allies such as Australia also open a vast number of possibilities for the states.
And, considering the recent agreement inked by the government and private space, it seems that both, the United States and Australia, could reap the developing scenario – an opportunity knocking for ASX-listed rare earth miners.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
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