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President-elect Donald Trump's threat of preemptive tariffs a few weeks ago against BRICS countries (Brazil, Russia, India, China, South Africa, etc.) seeking to usurp the US dollar as the global currency was a far-sighted and powerful move. Ta. However, as dawn broke, BRICS leader China quickly delivered a counterpunch, denying the US access to several critical minerals that the US needs for its national defense, most of which are now BRICS imported from other countries.
On New Year's Day, China raised the security deposit. It added 28 U.S. defense industry companies to the export control list, restricting them from exporting “dual-use” materials that have both commercial and defense uses.
What does this mean? It has long been feared that if the Chinese Communist Party (CCP) were to use this to justify banning the export of components containing critical materials such as rare earth permanent magnets (as I believe they would), This marked the beginning of an important mineral war. This was predicted on a FoxNews.com page in early 2023.
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China launched these attacks ostensibly in response to the Biden administration's actions. However, China knows that throwing critical minerals on the hook to the US military serves several strategic goals that benefit both China and the BRICS cabal.
China and other BRICS countries could harm the US military by restricting rare earth minerals. File: A rare earth mine can be seen in Baiyun-ebo or Bayan-obo, a mining town in China's Inner Mongolia Autonomous Region. (Bert van Dijk/Contributor)
- It directly undermines US national security without firing a shot.
- This is a strong response to U.S. export controls without a lose-lose battle with U.S. tariff masters.
- It could increase incomes for BRIC-based mineral producers, weaken global competitors and exacerbate inflationary pressures in the United States.
- This would allow China and its BRIC allies to step up to the plate with their opponent, the United States, which has been tied behind their backs in critical mineral production in recent decades.
However, the BRICS countries may have made a grave miscalculation. They underestimate America's ability to unleash a new era of “mine baby mine” under the Trump administration. Domestic critical mineral extraction in the United States, including in hot-button jurisdictions such as Greenland, is key to removing the dangerous influence that BRICS countries hold over America's economy and national security.
BRICS starts with a huge advantage over the US. All BRICS have rich mineral resources and are willing to extract their value to their economic, military and geopolitical advantage. Collectively, they control or significantly influence global supply chains for rare earths, niobium, scandium, titanium metals, vanadium, nickel, antimony, cobalt, lithium, graphite, gallium, platinum, and more. The breadth and depth of this geopolitical power would send a shiver down the spine of any serious American military planner.
For example, government-controlled institutions in China and Russia manipulate the prices of key mineral commodities to gain market share. They secretly distribute molecules through third parties to hide their origins and avoid customs duties. They invest orders of magnitude more in mineral research, development, and professional workforce training than the United States, further strengthening their huge competitive advantage.
BRICS countries are firmly accused of fueling anti-mining sentiment in the United States by funneling money to global anti-mining activists who work to lock up U.S. mining projects with red tape and endless litigation. .
If the United States wants to compete with China, it needs to expand its own rare earth production. File: An open pit mine at Molycorp's rare earth facility in Mountain Pass, California. (Reuters)
China has become the main fulcrum of BRICS mineral leverage. Thanks to companies controlled by the Chinese Communist Party, China has become the leading producer and/or refiner of more than half of more than 50 minerals deemed critical by the U.S. government. Furthermore, the Chinese Communist Party is clearly willing to weaponize this advantage, as recent moves to restrict US access to certain critical minerals demonstrate.
Make no mistake, restrictions on exports of critical minerals to the United States will likely expand. At some point, if such a ban is extended to specifically magnetic rare earth elements, which we now believe is inevitable, newly built F-35s will no longer be able to fly and smart bombs will no longer be functional. Advanced submarines will no longer be built, and soldiers will be deprived of future supplies of night vision goggles.
How can the incoming Trump administration counter the BRICS mineral threat?To be transparent, I am a 40+ year veteran in the mining industry, and currently my team and I are I would like to tell you that we are developing an advanced critical minerals project. I have a personal interest in America accelerating mineral development. However, on behalf of the industry, and more importantly, on behalf of the national security of the United States, I offer the following suggestions.
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- We provide low-interest financing to new mines that have already obtained all necessary federal, state, and local permits and have strong buy-in from local communities.
- We will focus on polymetallic mines that can produce multiple critical minerals from a single orebody and can scale up production by recycling post-consumer waste streams such as rare earth permanent magnets.
- Expands the authority of the U.S. Department of Defense through the Office of Strategic Capital and Title III programs to become a major source of funding for new mines. It would also allow the National Defense Reserve to build much larger reserves of defense-critical minerals and enter into forward purchase agreements with U.S. mines that are not yet in production.
- Encourage the Export-Import Bank of the United States (EXIM) to accelerate debt financing for major domestic mineral projects. To its credit, EXIM has already begun its first-ever initiative to fund projects within the United States. Additionally, EXIM's loan proceeds have historically covered its operating costs and enabled it to generate net revenue for the government. Few government agencies can provide this kind of value.
- The National Environmental Policy Act (NEPA) exempts defense critical mineral projects that are not subject to NEPA and are intended to receive federal funds from review.
Thanks to companies controlled by the Chinese Communist Party, China has become the leading producer and/or refiner of more than half of more than 50 minerals deemed critical by the U.S. government. Moreover, the Chinese Communist Party is clearly willing to weaponize this advantage, as recent moves to restrict US access to certain critical minerals demonstrate.
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- Legislate reasonable limits on litigation schedules. Currently, it takes an average of 29 years to obtain a mine online in the United States. Only Zambia is worse.
- Streamline the federal permitting process. The first Trump administration made great strides in this regard, much of which has been reversed by subsequent executive orders. Permission for reform through changes in U.S. laws and regulations is essential.
The United States mines and processes minerals more efficiently than any other country, and is also environmentally conscious. Let's reclaim and unleash America's entrepreneurial spirit and declare “Mine, Baby, Mine” our way to a more prosperous and secure future.
