If ever there was a question about how risky heavy dependence on China for critical minerals is, it was dispelled with China’s plan to restrict the export of graphite, a critical battery metal needed for everything from weapons production to electric cars and the transmission of solar and wind power.
China recently announced it will require foreign companies to apply for permits to receive graphite shipments. Each EV battery manufactured in the United States weighs about 1,000 pounds and contains 110 pounds of graphite. Still, there are no graphite mines in the United States.
China produces almost all of the high-purity graphite needed for batteries. Earlier, China limited the export of two minerals — gallium and germanium — used in the production of weapons systems, virtually cutting off all access to these supplies. During tense trade negotiations with the United States a few years ago, China threatened to cut off shipments of rare earth minerals.
Make no mistake: China is using America’s dependence on Chinese minerals as a powerful tool to seize and deploy for its political agenda. With demand for battery metals like lithium, copper and cobalt expected to skyrocket, China can disrupt supply chains on a grand scale. The problem is not the surge in China’s mineral production. The problem is the lack of investment in America’s abundant mineral resources.
The path forward comes with the U.S. government deciding that a commitment to using minerals mined and processed in the United States and friendly countries like Canada and Australia could not only halt but eventually reverse the dangerous reliance on China and would be prudent insurance against the possibility of a sudden cut off of Chinese minerals or huge price hikes that could be disastrous for U.S. national security and the nation’s economy. Increasing domestic supply would mean that fewer dollars would go to China and more of them would stay at home, going into mine investment and job creation.
For this to happen, however, the United States needs to implement changes in the mine-permitting process that Congress has approved and President Biden signed into law. They would streamline the process so that it doesn’t take 20 years or more to open a new mine.
Something else: Congress should reject the proposal for a royalty tax on domestic mining. Such a tax would be counterproductive since the cost of mining in the United States is higher than in most other countries. If the United States can hold down the cost of mining, there’s hope. But if we fail to reduce our dependence on China for critical minerals, we’re ants on a burning log.
