Trump invokes emergency powers to boost US critical minerals production
WASHINGTON, March 20 (Reuters) - U.S. President Donald Trump on Thursday invoked emergency powers to boost domestic production of critical minerals used widely across the economy as part of a broad effort to offset China's near-total control of the sector.
The move is the latest by Trump to increase U.S. energy and minerals production and comes amid an escalating trade conflict with China, Canada and other large minerals producers that supply American manufacturers.
Lithium, nickel and other critical minerals are used in many electronics, and demand is expected to surge in coming years for production of electric-vehicle batteries. China is the world's largest producer or processor of many critical minerals.
Trump signed an executive order that taps the Cold War-era Defense Production Act (DPA) as part of an effort to provide financing, loans and other investment support to domestically process a range of critical minerals.The DPA gives the Pentagon wide berth to procure equipment necessary for national defense. Invoking it essentially declares that relying on rival nations for critical minerals constitutes a national security threat.
"The United States was once the world's largest producer of lucrative minerals, but overbearing federal regulation has eroded our nation's mineral production," the president said in the order.
The order directs federal agencies to create a list of U.S. mines that can be quickly approved as well as which federal lands, including those controlled by the Pentagon, could be used for minerals processing.
The U.S. currently produces very little lithium and nickel; its only cobalt mine shuttered last year amid intense Chinese competition. The U.S. does have multiple copper mines, but only two smelters to process the red metal into pipes, wiring and other components. The U.S. has only one mine for rare earths, which are used to make magnets that turn power into motion.
Late last year, Beijing imposed an outright ban on exports of gallium, germanium and antimony to the United States, causing U.S. manufacturers to scramble for alternative supplies of those niche-but-vital materials.
The order also encourages faster permitting for mining and processing projects and a directive for the Interior Department to prioritize mineral production on federal land. The order directs agencies to help boost U.S. output of copper and gold, neither of which is considered a critical mineral by the U.S. Geological Survey.
An executive order from Trump had long been sought by U.S. miners, many of which had long complained that bureaucratic delays hampered output.
"Ramping up American mining is a national security imperative and President Trump's strong action recognizes that," said Rich Nolan, head of the National Mining Association trade group.
The Defense Production Act is a 1950 law that former President Harry Truman deployed to ramp up steel production for the Korean War.
Former President Joe Biden also invoked the law to encourage domestic production of critical minerals, adding battery materials such as lithium, nickel, graphite, cobalt and manganese to the list of items covered under the measure to help companies access $750 million in funds.
This augurs well for S32's Arctic and Bornite Cu projects in Alaska and under-construction Hermosa in Arizona, all globally significant orebodies and major potential domestic US sources of Cu Co Mn Zn and Ag. Trump may even offer financial incentives to speed development. That would be welcome.
S32's 50% JV partner in the Alaska projects, Trilogy Metals T.TMQ, has had a stellar run since Trump's election in November. Take that as a proxy for the likelihood of development.
Ash
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