US races to build critical minerals alliances

Andy Home - President Donald Trump's offer to buy Greenland didn't go down well with either the inhabitants of the world's largest island or with Denmark, which administers it as an autonomous territory.The Danish prime minister Mette Frederiksen described the idea as "absurd", triggering a diplomatic fall-out as Trump decided to cancel a planned visit to Denmark.The idea may be many things but, from a US perspective, it is not "absurd". There are two completely rational drivers for eyeing up Greenland - its strategic location for North Atlantic shipping and its untapped mineral reserves."They've got a lot of valuable minerals," was White House economic adviser Larry Kudlow's explanation of Trump's latest real estate ambitions.As it stands, the United States will have to content itself with a more mundane memorandum of understanding, signed in June, to jointly fund and operate an aerial survey of Greenland's Gardar province.Gardar "has great potential for new discoveries of a range of mineral commodities, including rare earth elements," according to the US Department of State.And that's really the point. Greenland has flashed onto the presidential radar because the United States is rushing to build out new critical minerals supply chains to break its dependency on China.'Unreliable' countriesThe Pentagon has been worrying for years about the United States' growing dependence on China and what it terms other "unreliable" countries for a broad spectrum of minerals.Such concerns were thrown into sharp relief in May, when Chinese president Xi Jinping used a visit to a rare earths magnet plant to send a thinly veiled warning about the potential costs to the United States of escalating trade tensions.Those costs are potentially very high indeed since the US and the rest of the world are almost 100% reliant on China's rare earths production and exports.Even the only operating US rare earths mine, Mountain Pass in California, has to ship its product to China for processing.So far at least, China hasn't used its "rare earths gun".The country's exports are running steady albeit marginally off last year's pace, while shipments of rare earth magnets to the US hit a three-year high in August.But China's sabre-rattling has spurred a scramble by the US to seek out potential new suppliers for both rare earths and the other 34 minerals identified as "critical" by the Department of the Interior.All are "critical" both in terms of their military applications and in terms of US import dependency, particularly when that dependency is on countries classified as potentially hostile.The US is now on an accelerated path towards building out more reliable and sustainable supply chains.A key part of that process, as laid out by the Commerce Department's critical minerals strategy, published in June this year, is forming alliances with "friendly" suppliers.Canada and AustraliaTop of the list are Canada and Australia. High-level discussions have already taken place with both countries.Trump and Canadian prime minister Justin Trudeau discussed "ways to improve mineral security and … work more closely to ensure secure and reliable supply chains" at a meeting in June.The official Canadian press statement also noted that Trudeau "highlighted the importance of Canadian uranium to North American energy security", a pointed reference to an ongoing US investigation into uranium import dependency.The two countries also clashed over US import duties on Canadian aluminium until it was exempted from the tariff hit-list in May.Such diplomatic jostling aside, however, Canada has a lot to offer the US when it comes to supply critical minerals.Metallic wish listCanada is a already a leading producer of nickel and cobalt and has another 70 advanced projects for both metals, according to a July presentation by Hilary Morgan, director international affairs at Natural Resources Canada.Also ticking the US metallic wish list are Canada's 16 advanced rare earths projects and its 17 advanced and near-stage lithium projects.Australia, meanwhile, is already a growing lithium production powerhouse and in the form of Lynas Corp boasts the only vertically integrated rare earths producer outside of China."The US increasingly requires critical minerals to serve its growing high-tech industries and Australia possesses the raw materials to meet this need," boasts an Australian government report.ERGI, NamibiaBut as Trump's interest in Greenland shows, the US is looking anywhere and everywhere to diversify its critical minerals imports.Secretary of state Mike Pompeo met late September at the United Nations Assembly with representatives of nine other countries under the banner of the newly-established Energy Resource Governance Initiative (ERGI).As the name implies, the specific focus is on new-energy minerals such as lithium, cobalt and copper. The aim is to share "best practices on minerals management and governance" to promote "integrated and resilient supply chains" as the electric vehicle revolution builds momentum.The list of participating countries includes major existing producer countries such as Peru, the Democratic Republic of Congo and Zambia but also potential future suppliers such as Botswana, Namibia and the Philippines.Central to US minerals strategic thinking is the need to move beyond relying on any one country, even if it is a "friendly" one.Pentagon"We are looking for any source of supply outside China. We want diversity. We don't want a single-source producer," Jason Nie, a material engineer with the Pentagon's Defense Logistics Agency (DLA), told Reuters on the sidelines of the Argus US Specialty Metals conference in Chicago.The DLA is charged not only with managing the Pentagon's materials stockpile but also with trying to facilitate financing and offtake arrangements for potential new projects.It is another part of a multi-pronged US minerals strategy which will redraw the global map.Greenland may not be for sale, as Trump has found out. But its minerals are.And it won't be the last resource-rich country to get a US tap on its shoulder in the weeks and months ahead. - Nampa/Reuters* Andy Home is a columnist for Reuters.

US races to build critical minerals alliances

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Republikein 2026-05-05

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US races to build critical minerals alliances

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