It is time to recognize that the United States will benefit economically and politically by ending our reliance on imports of strategically important minerals needed for weapons systems and an array of high-tech consumer products ranging from lithium-ion EV batteries to cellphones and flat-screen televisions. The political and economic costs of foreign minerals dependency are far too high, particularly in a period of intense trade competition with China, the world’s No. 1 supplier of minerals. Instead, we should strengthen our own domestic mining capability.
Meaningful legislation to address the problem is needed before the situation gets much worse. The real danger is not that the cost of minerals commodities could get out of hand (last year the U.S. spent more than $7 billion on imports of minerals and metals), but rather that U.S. mines that are essential to our nation’s well-being are closing.
A study by the U.S. Geological Survey shows that dependence on minerals from abroad has doubled in the last 20 years, and we are now 100 percent import-dependent on 20 key minerals that are crucial in the manufacture of jet fighter engines, antimissile defense systems, night-vision goggles, and smart bombs, among other advanced weapons systems.
China is our leading supplier for some critically important minerals such as gallium, bismuth, and rare earths — and that’s disturbing for several reasons, one of which is that trade relations with China are strained and hawkish elements in China are anxious to challenge the U.S. They did so in 2010 when, in an effort to gain geopolitical leverage, China restricted the export of rare earths, forcing prices for the minerals to increase by 300 percent.
Nor is seeking alternative sources of supply abroad the path the U.S. should necessarily take. Some central African countries have large mineral resources, but either use child labor for mining or are at the mercy of those who purchase weapons for brutal civil wars with the revenue from mineral sales.
There is really no good economic or scientific reason for America to depend so heavily on imported minerals. The U.S. possesses an estimated $6.2 trillion in minerals reserves, but regulatory obstacles and opposition from environmental activists are blocking access to them. In Canada and Australia, two countries with environmental safeguards comparable to our own, obtaining a mine permit usually takes no more than three years. In the U.S., the process takes a decade or longer. As a result, frustrations are running high and investors have pushed U.S. mining operations into a collective grave.
More than ever before, our political and business leaders need to make it clear that foreign dependence is neither the right nor the necessary way, and exposes the U.S. economy to great and unnecessary risks. An ideal minerals policy would limit regulatory intrusion, promote economic growth, and enable U.S. companies to compete in international markets. Environmentalists will likely resist any regulatory rollbacks. But so profound is the case for strengthening U.S. mining of minerals and metals that our highest priority should be the security and economic dividends from a pro-competitiveness agenda.
Mark J. Perry (@Mark_J_Perry) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a scholar at the American Enterprise Institute and a professor of economics and finance at the University of Michigan’s Flint campus.
