This piece originally appeared at American Compass.
Executive Summary
Of 63 minerals assessed by the United States Geological Survey, the U.S. is 100% reliant on imports for 15 and at least 80% reliant on imports for an additional 11. In some cases, the nation is almost wholly dependent on China to supply inputs critical to modern technologies.
In most cases, deposits of these minerals are accessible within the United States, but they have not been developed, and processing facilities have not been built, because of regulatory obstacles and unattractive economics. To re-establish secure domestic supplies, the United States should:
- Use Title III of the Defense Production Act to provide financing for new projects.
- Funding can take the form of loans, loan guarantees, direct capital infusions, or purchase commitments and support for projects in Canada and Australia as well.
- Firms can also receive support to deploy new technologies for exploration and processing.
- Use Title III, the Exchange Stabilization Fund, and Other Transactions Authority to establish price guarantees.
- Price stability would prevent the market manipulation by dominant producers, especially China, that otherwise drive out private capital.
- To foster price stability, the U.S. should also support the development of deeper and more sophisticated capital markets for risk-hedging instruments.
Environmental permitting reform, workforce development, and stronger alliances will also be necessary.
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