Weekly News Review January 6 – January 12 2024

This week, global players made big moves in critical raw materials. In the United States, the Pentagon created a new board to strengthen supply chains, and the ExportImport (EXIM) Bank launched a financing tool for mineral projects abroad. Meanwhile, Brazil invested over $800 million in raw material projects, while Canada Rare Earth secured assets in Laos.

UNITED STATES: PENTAGON CREATES STRATEGIC METALS BOARD:

The topic of critical material supply chains is becoming a focus of politics. 

The United States government is intensifying its focus on critical raw materials. On Monday, the Department of Defense announced the formation of the Strategic and Critical Materials Board of Directors, which will advise the Under Secretary of Defense for Acquisition and Sustainment on issues related to supply chains and the country’s national defense stockpile.

The Board will include representatives from the Departments of Defense, Energy, State, Commerce, and the Interior and congressional Armed Services Committees. The first meeting is expected to take place later this year. 

Supply chains and critical materials have emerged as a pressing political issue, particularly in Washington. The ongoing trade tensions between the United States and China have highlighted Beijing’sBeijing’s strategic advantage in critical minerals: In December, China imposed a sweeping export ban on gallium, germanium, and antimony to the U.S., followed in January by plans to restrict exports of key refining technologies for lithium and gallium, which would not only affect the U.S. but are intended as general export stops.

Earlier last year, the United States introduced tariffs on Chinese goods to safeguard strategic domestic sectors, with President-elect Donald Trump pledging additional measures. However, some analysts doubt tariffs’ effectiveness in reducing the U.S.’s dependence on imported critical minerals, vital for high-tech industries such as semiconductors, solar panels, and electric vehicles.

UNITED STATES: DEPARTMENT OF ENERGY INVESTS $45 MILLION TO BOOST STRATEGIC METALS SUPPLY CHAINS –

The U.S. Department of Energy (DOE) has allocated $45 million to fund six projects to create regional consortia for critical mineral and material supply chains. These initiatives focus on harnessing secondary and unconventional feedstocks like coal by-products and oil and gas waste to strengthen domestic mineral supplies and support clean energy and defense industries.

The projects will involve collaborations with industry, universities, and government bodies to develop strategies for extracting valuable resources across the U.S. For example, the University of Alaska Fairbanks will team up with three state geological surveys to explore the mineral potential in the Northwest. At the same time, the University of Illinois Urbana-Champaign will focus on building an economic case for recovering critical materials from coal and coal waste in the Upper Midwest.

The DOD’s push symbolizes the topic of critical minerals gaining traction in Washington’s political spheres amid tensions between the U.S. and China. Also on Monday, the Department of Defense announced the setting up of a strategic materials board intended to give advice related to supply chains and stockpiles of critical and strategic materials.

UNITED STATES FOREST SERVICE APPROVES MINE PLAN FOR IDAHO:

The company announced Monday that the U.S. Forest Service has approved Perpetua Resources’Resources’ mine plan for the Stibnite Gold Project in Idaho. The mine contains an estimated 4.8-million-ounce gold reserve, and Perpetua Resources plans to produce 450,000 ounces annually over the first four years. The Stibnite mine also holds the only identified antimony reserve in the U.S., containing 148 million pounds, or 67,000 tons. According to the company, the project could meet around 35% of the domestic demand in its first six years of operation, based on 2022 annual consumption data.

Antimony is an alloy component that hardens soft metals such as lead, copper, tin, and zinc. It is also used in the production of flame retardants and ammunition. So far, the U.S. has been entirely import-dependent on the metal, with most of the material coming from China in the past, according to U.S. Geological Survey data.

However, in 2024, China cut off supplies of antimony, first imposing mandatory export licenses and later entirely banning the export of the metal as well as gallium and germanium to the U.S. Without any other currently operating domestic sources, the Stibnite project could help offset Beijing’sBeijing’s policies. Perpetua Resources added in the statement that the mine is now awaiting a construction decision, and the company is finalizing the remaining federal and state permits and securing the necessary financing for the project.

Mining at the Stibnite site dates back to 1899, but historically, it was conducted with little environmental consideration. Perpetua Resources aims to rehabilitate the area as part of its project.

CANADA RARE EARTH CORP. ANNOUNCES REFINERY ACQUISITION IN LAOS:

South Asian countries seek to profit more from their natural wealth.

Canada Rare Earth Corp. has announced a Memorandum of Understanding (MOU) with a private Laos-based company to acquire a controlling interest in a fully permitted rare earth refinery in Laos. The MOU gives the company the right to purchase a 70% stake in the refinery close to Vientiane, the Laotian capital, capable of producing both light and heavy rare earth oxides with a production capacity of 3,000 tons per year. The refinery is due to be commissioned in the fourth quarter of 2025, following modest refurbishment work, the company added.

The twelve-year-old refinery has never been operational due to a policy shift in the country, opposing new rare earth projects. However, the government has recently reversed course and actively encourages new processing operations using locally sourced feedstock within the country. In late 2023, Prime Minister Dr Sonexay Siphandone instructed the government agencies to draft a revised strategy on rare earths, arguing that the country would benefit more from its natural resources by exporting processed goods than raw materials.

Laos – A New Heavy Rare Earth Player?

The deposits in Laos are predominantly hosted in ionic adsorption clays, which are especially rich in so-called heavy rare earths, such as dysprosium and terbium. These coveted resources are scarcer than their light counterparts. Their addition enhances durability and boosts performance in magnets, making them essential for high-demand applications. China dominates the global production of heavy rare earths, relying heavily on feedstock from neighboring Myanmar.

However, Chinese companies have already begun to recognize Laos’ untapped potential. Last year, Chinese mining company Chijin Xiawu acquired a 90% stake in a Laos-based rare earth mining firm, marking a significant investment in the region’s resource potential.

In 2022, Xiamen Tungsten—one of China’s leading rare earth companies and its largest tungsten producer—partnered with another Chinese miner to establish a joint venture focused on exploring rare earth resources in Laos.

Canada Rare Earth is also pursuing a 70/30 joint venture to co-develop an advanced-stage ion adsorption clay rare earth mining project to complement the refinery acquisition.

BRAZIL LAUNCHES ONE BILLION DOLLAR STRATEGIC METALS FUND:

Brazil, rich in natural resources, aims to capitalize on its wealth further. The Brazilian Development Bank (BNDES) and the government agency FINEP, which supports science and technology financing in the country, provide more than $800 million in project funding. Companies can apply for the program starting January 13.

The goal is to establish value chains for lithium, rare earths, nickel, graphite, and silicon and boost investments in the production of batteries, photovoltaic cells, and permanent magnets. Foreign companies can also participate, but specific requirements apply.

Brazil’s energy sector has relied on renewable sources for decades, with hydropower being particularly significant and, more recently, photovoltaics. Wind energy also holds substantial potential. With the world’s third-largest reserves of rare earths, which are essential for manufacturing wind turbines, Brazil is well-positioned to tap into this potential. Efforts to build production capacities are already underway.

UNITED STATES: EXPORT-IMPORT BANK (EXIM) LAUNCHES FINANCING TOOL FOR FOREIGN STRATEGIC METALS PROJECTS:

Chinese projects are excluded, as the mechanism aims to offset import dependencies on the People’s Republic.

The Export-Import Bank of the United States (EXIM) has unveiled the Supply Chain Resiliency Initiative (SCRI), a new financing tool designed to bolster U.S. supply chains and reduce dependency on China for critical minerals. The initiative funds foreign projects along the mineral value chain and excludes Chinese ones. Another key provision of the tool is that the minerals produced in the projects must be ultimately used in the U.S. To further this goal, the initiative aims to facilitate agreements between manufacturers—such as automakers and battery producers—and global mineral suppliers in partner countries. EXIM, the official export credit agency of the U.S., offers financial support and other assistance to American businesses.

China dominates global supply chains for critical minerals, leaving countries like the U.S. heavily reliant on imports. The new mechanism aims to reduce this dependency, following Beijing’s recent export bans on the critical metals gallium, germanium, and antimony imposed in December.

The U.S. Department of Defense also recognized the issue and launched a task force on Monday. The task force will advise the Under Secretary of Defense for Acquisition and Sustainment on topics related to supply chains and the country’s national defense stockpile.

CHINA SEEKS MORE INFORMATION ON STRATEGIC METALS PROJECTS ABROAD.

The Ministry of Commerce expands the list of materials requiring special reporting obligations.

While China’s vast mineral resources are well known, its companies have increasingly pursued raw materials abroad to support its industrial needs, often through investments in mining projects. According to the South China Morning Post, Chinese investors must report the confirmed and potential reserves of critical materials from their overseas ventures moving forward.

The expanded list of materials requiring disclosure has grown from 32 to 41 items, including rare earths, titanium ore, zircon, tantalum, and antimony—recently banned for export to the U.S.

In 2023, Chinese overseas investments in mining projects totaled approximately $16 billion, reported The Economist.

CHINESE SCIENTISTS DEVELOP TECHNOLOGY FOR GREENER RARE EARTH EXTRACTION:

Electric currents are expected to help minimize the use of chemicals while improving the efficiency of raw material extraction.

For decades, China has been the dominant player in rare earth production. The country’s ability to outperform previous competitors, such as the United States, was primarily driven by less stringent environmental regulations and lower production costs. However, as demand for rare earth elements increases and geopolitical tensions rise, Western countries are working to strengthen their resource supply chains.

To protect its market leadership against growing competition, China is seeking to upgrade the quality of its rare earth industry, with new extraction methods playing a key role. A research team from the Chinese Academy of Sciences (CAS) recently presented one such method.

The new process is primarily designed for ion-adsorption clays, a type of deposit currently only mined in southern China and neighboring Myanmar. These deposits are the primary source of highly sought-after heavy rare earths like terbium. These raw materials are traditionally extracted from rock through leaching, often using ammonium salts.

In the innovative method, electric currents drive the movement of the extracted metals, leaching agents, and other substances such as water. According to the researchers, this approach is more environmentally friendly, faster, and more efficient.

The team first introduced the concept in 2023 (we reported). Initial experiments confirmed the method’s feasibility. Since then, efforts have focused on addressing industry-related challenges, such as ensuring the stability of electrodes in corrosive environments. With the improvements made, leaching agents have been reduced by 80%, and energy consumption has dropped by 60%.

A 60-day industrial-scale test showed a recovery rate of 95% of the rare earths contained in the ore. The extraction process has also been significantly accelerated, and the impact on groundwater has been substantially reduced. The researchers have hailed their results as a breakthrough in enabling greener and large-scale mining of ion-adsorption clays.