Securing the Critical Mineral Supply Chain is Vital to the Future of the U.S. Military
Climate change poses substantial threats to U.S. military readiness. These threats challenge both U.S. military bases and operational capability. The Department of Defense (DoD) must reduce carbon emissions to respond to the growing threats of climate change. DoD operations are a significant source of carbon emissions. If the DoD were a country, it would be the 55th largest carbon emitter in the world. The DoD is the largest single hydrocarbon consumer in the world. Reducing carbon emissions from the DoD would be instrumental to America’s overall effort to reduce carbon emissions. In March 2021, Defense Secretary Lloyd Austin ordered the creation of the DoD Climate Working Group to coordinate the DoD’s response to the climate crises and bolster the Biden administration’s goal of net-zero emission by 2050. While the DoD has pursued various strategies, like increased energy efficiency and alternate fuels, a significant part of the DoD’s energy strategy is expanding the use and implementation of renewable energy sources; however, renewable energy sources require a substantial amount of critical minerals. The DoD already consumes a large quantity of minerals. For example, one F-35A fighter jet requires approximately 920 pounds of rare earth elements and minerals. The DoD’s clean energy transition may drive up demand for critical minerals, which would create issues with the current U.S. mineral supply chain. In their Climate Adaptation Plan, the DoD announced strengthening the mineral supply chain as a significant move to increase climate resilience. The first step to enhancing the mineral supply chain should involve reducing import dependence on China.
IMPORT RELIANCE ON CHINA
There are many weaknesses in the critical mineral supply chain, but U.S. import reliance on China presents one of the most immense risks. Currently, the U.S. imports over half of its minerals, with China supplying 80% of those imports. China controls approximately 55% of the global rare earth mining capability and 85% of rare earth findings as of 2020. Additionally, China’s processing capability is five times greater than the combined global capacity for producing rare earth minerals, giving China a competitive advantage regarding low costs and infrastructure.
For example, two critical minerals that are vital for the DoD are lithium and cobalt. These minerals are necessary for electric vehicles and battery storage. The International Energy Agency (IEA) estimates that electric vehicles and battery storage alone will account for more than half of the mineral demand growth over the next 20 years. Currently, China refines 60% of the global lithium supply and 80% of the global cobalt supply.
The import dependency on China is not a new phenomenon. China surpassed the U.S. as the global minerals leader in the 1990s and worked to dominate and corner the market. For example, in 2015, Molycorp Inc., the only rare earth producer in the U.S., was forced into bankruptcy when China suddenly restricted exports then immediately flooded the market with minerals.
THE DOD’S ENERGY TRANSITION
In June 2021, the Biden Administration released a comprehensive 100-day supply chain review that noted the risks associated with overreliance on China and provided recommendations for enhancing the strength and resilience of the mineral supply chain. A primary recommendation from this review was to rebuild the domestic critical minerals supply chain to reduce import dependence. However, rebuilding America’s domestic supply chain may take decades. Just building an extraction and production chain alone could take as long as ten years.
The U.S. needs to diversify its imports to both reduce import reliance on China and avoid overreliance on a single state. The framework for this initiative was created in 2019, with the Energy Resource Governance Initiative (ERGI). The ERGI is a collaborative effort among U.S. allies to increase the resilience, diversification, and sustainability of the critical energy mineral supply chain. However, the COVID-19 pandemic has had a fundamental impact on the global critical mineral supply chain, stalling many new production and manufacturing initiatives. While the pandemic has largely accelerated calls for clean energy, it has stalled U.S. efforts to secure its supply chain.
The DoD needs to transition to clean energy to strengthen its climate resilience. Additionally, DoD innovations in clean energy technology could be adapted into the private sector. However, the DoD must consider the strength of the critical mineral supply chain in its energy transition strategy. Mass implementation of renewable energy and reducing fossil fuel consumption without a secure mineral supply chain can seriously impact military readiness and operational capability by further intensifying the DoD’s demand for critical minerals.
