By GREGORY WISCHER, MORGAN BAZILIAN, JAHARA MATISEK
Last week, China imposed export bans on antimony, gallium, and germanium—all of which are listed on China’s dual-use export control list. Other minerals on the list and, thus, at risk of future bans include aluminum, magnesium, and zinc, among others. Beyond their economic importance, many of these minerals have military applications. For example, tungsten superalloys are used in military turbines and armor-piercing munitions, while bismuth is used in ammunition and alloys for defense.
With many minerals, the U.S. government can increase domestic mining, processing, and recycling to help mitigate future supply cutoffs from China. Of course, building and expanding domestic capacity will take time, significant capital, and appropriate government policies, but it can be done.
However, for some minerals—such as bismuth and tungsten—the United States simply lacks the mineral reserves, scrap, and substitutes to fill supply gaps from a Chinese export ban. For instance, China supplied over 60 percent of America’s bismuth consumption from 2019 to 2022, and the United States has not produced bismuth since 1997. The U.S. National Defense Stockpile also has no inventory of bismuth.
For such minerals, the U.S. government—in addition to seeking to boost domestic production—should both increase inventories in the National Defense Stockpile and sign right-of-first refusal (ROFR) offtake agreements with existing overseas mineral producers. Such steps will help buttress the United States against future export bans.
With stockpiling, the U.S. government should acquire minerals from domestic producers when possible but prioritize acquiring supply wherever it is available including from China. For instance, with both bismuth and tungsten, China is far and away the world’s largest producer: it produces 80 percent of the world’s bismuth and 81 percent of its tungsten.
The second policy is signing ROFR offtake agreements with existing overseas mineral producers for their uncontracted production. In ROFR agreements, the U.S. government would have the first right—but not the obligation—to purchase a certain volume of mineral production before it is offered to other buyers.
To secure ROFR offtake agreements, the U.S. government could invest in overseas mineral projects or expansions. Already, the U.S. government has invested (through an intermediary) in two overseas mineral projects: a nickel-cobalt mine in Brazil and a rare earth processing project in South Africa.
While ROFR offtake agreements are common with prospective mineral producers, the timeline for commissioning new production is lengthy and often jeopardized by technical (e.g., ramp-up issues) and jurisdictional (e.g., regulations) risks. Moreover, ROFR offtake agreements for future mineral production cannot supply minerals if China imposes export bans with immediate effect. Having ROFR offtake agreements for existing production could immediately help fill supply gaps caused by adversarial export bans.
The U.S. government should prioritize signing ROFR offtake agreements with firms operating in allied and partner countries, such as Australia, Canada, Japan, and South Korea. The U.S. government should also prioritize inking agreements in countries least likely to face disruptions from a possible U.S.-China conflict in the western Pacific.
For example, Australia and Austria produce about the same volume of tungsten, yet because shipping across the Atlantic Ocean would be more secure than shipping across the Pacific Ocean in a U.S.-China conflict, the U.S. government should first prioritize agreements for tungsten with Austria over Australia. In other cases, avoiding the western Pacific is not possible. For instance, Japan and South Korea are highly exposed to a U.S.-China conflict over Taiwan, but they are the only major bismuth producers that are U.S. allies.
Demonstrating tungsten’s importance for the U.S. military, U.S. tungsten imports spiked during World War I, World War II, and the Korean War, and U.S. imports would likely spike again in a potential conflict against China. The U.S. government would be well-served in pre-emptively securing these imports and similarly important war minerals through ROFR offtake agreements.
Controlling the overseas supply of these military minerals can have direct combat implications, too. The Tungsten Institute writes, “Before World War II was started, Germany had bought up virtually the entire world supply of off-grade tungsten ore.” This tungsten proved critical in Germany’s nearly successful North Africa campaign: German tanks used armor-piercing munitions with tungsten carbide cores with dangerous effects against British tanks.
China’s recent mineral export ban is yet another wake-up call for the U.S. government to reduce America’s reliance on China for critical minerals. For many minerals, the United States can indeed rely on domestic resources to offset future mineral cutoffs from China, but for other minerals, it cannot—it must depend on foreign actors. In such cases, the U.S. government should preemptively stockpile and sign ROFR offtake agreements with overseas mineral producers. These proactive steps will help fortify the United States against future mineral export bans.
Gregory Wischer is a fellow at the Payne Institute for Public Policy at the Colorado School of Mines.
Morgan Bazilian is the director of the Payne Institute for Public Policy at the Colorado School of Mines.
Lt Col Jahara “Franky” Matisek is a military professor in the National Security Affairs department at the U.S. Naval War College and fellow at the Payne Institute for Public Policy. The views expressed in this article are his own.
This article was originally published by RealClearDefense and made available via RealClearWire.
All true. They’re cutting us off because of the tariffs, and because they know they will never get a cent of the trillions of dollars that we owe them… only interest money. They’re cutting their losses.Can’t blame them for that. Wait until Canada and Mexico Do the same thing because of the Trump tariffs? He’s driving wedges between us and our allies.
Canada and Mexico are not our allies. They are our neighbors and need to behave as such. When is Chyna going to repay their ww2 debts they defaulted on?
Omg i just blew milk out of my nose.
If you feel Canada and mexico are strong allies take a look at their recent behavior. Canada was horrible to their citizens during covid, and now 1 in 20 deaths are from euthanasia. Mexico aided in the illegals invasion as well as flooding our country with drugs. I do not see how you feel they are great allies, when we have to subsidize their economies.
Don’t change my words now, sonny. I said they were allies, not great allies.
Greg.
It is ok for us to depend on ourselves.
It is ok not to have to outsource our wellbeing as a nation to outside powers.
It is ok to see us all as one people without having to add all those tedious labels such as allies.
We are most empowered when we are able to sustain ourselves from within.
There is no sense in having to rely on countries across the world to provide us materials, when we have everything we need right here at home.
Everything will be ok. Just you see.
We can’t do it alone. It’s a global society now.
Maybe you don’t have what it takes to be independent, but you don’t speak for the rest of us.
If you need assistance, ask for it. But just because you are co-dependent, it does not mean you can force the rest of us to be codependent.
You act like our country is full of incompetent children.
We are quite capable, despite your doubts.
I’m self sufficient financially many times over, but i’m not a doctor and i’m not a dentist, and i’m not a farmer, and i’m not a roughneck. I’m not along shoreman, and i’m not a boat captain. I depend on those other people to help me out. We learned that we can no longer be isolationists. Even japan, back in the old days, figured it out and so has china. So i’m entitled to my opinion and no I don’t speak for everyone, but maybe someone should speak for you.
Also, if America is too helpless to fend for itself, as you think, why do so many people immigrate here for a better life than what they had in their home land?
Perhaps the truth is other countries need the USA more than we need them.
I’m gonna try to put this in a way that maybe you can understand but probably can’t, if we’re so self sufficient.Why do we owe china trillions of dollars?
That is a question you should be asking a legacy of corrupt law makers that have made it expensive through policy to do business on our own land. Those same law makers have made policy that promotes the cheap outsourcing of manufacturing to other nations with the sweet kick backs of money laundering.
Here is a scenario for you. A politician gets donations to run a campaign. In return, that politician, once in, pushes to implement policy that is favorable to the donor. The donor and politician makes good money while gradually increasing taxes of the working Americans. Filling their own greedy pockets while leaving the tax payer footing the bill.
Perhaps do some digging into 1913 and the implementation of the federal reserve.
Perhaps do some digging into how our government is run, not by the voice of the people, but the monetary influence of the lobbyist.
You live in an illusion Greg. One where you have lost all your power and have become reliant on systems outside of yourself.
If you wish to depend on China, you can move there yourself.
We are now entering an era in America where we are freeing ourselves from financial tyranny.
Yeah, with the dollar collapsing and many country’s ditching the dollars. China owns much of America. Stick around, you’re already there.
Greg, you’re not going to believe this, but I actually agree with you! All true! Sorry to make you blow the milk again!
Lmao. That’s okay I got it cleaned up.
Greg,
I guess you already forgot about this…
“The ban announcement came one day after the Biden Administration restricted the export of specific computer chips to China out of concern these chips are being used to develop advanced weapons that could be used against the United States and her allies.”
‘https://mustreadalaska.com/sudden-move-china-bans-rare-minerals-from-export-to-usa-but-alaska-has-minerals-to-spare/’
It’s not because of tariffs that haven’t been enacted by a President elect.
Yes, you are right, but they do know it’s coming because blabber mouth, done told everybody. Biden has been increasingly tough on China. And it’s just a new jerk reaction from them, I had to get my trump slap in there, you know.
It’s mostly the EPA and gub’mint regs have made it too expensive to produce those minerals, of which the U.S. has more than adequate stocks. DOGE needs to get rid of the EAP and we’ll be back on track.
If the feds want any minerals from us we have to power to say hell no.
If we want to deal with them then we will trade for our land and rights to develop our state the way we want not some greenie politician from California.
They locked it up so we could be holding their key in our hands.
At this point we should sell to the highest bidder.
Med check time.
Alaska has tungsten resources
‘https://www.miningnewsnorth.com/story/2018/08/01/in-depth/critical-minerals-alaska-tungsten/5279.html
Tungsten was mined around Fairbanks and also in Southeast in WWI & WWII, the Seward Peninsula also has some tungsten lode bearing ore. Plenty of other minerals and heavy metal deposits around the state that could be responsibly mined instead of using third world countries, slave labor, and environmentally destructive practices seen in the places we’ve outsourced our National Security to.
I think that China means well for the world. It’s not trying to build a satanic 666 world government.
Just looking out for themselves. Buying up tons of gold. Expanding its currency. Gaining ground in space and the moon. Yeah, a failed society.
How should we pay them back if countries are signing up for Belt and Road?
But all major players want and are after the resources of the entire world. This is a very complex topic and hard to put into words. So they’re going to fight. Or that phrase “You may not be interested in war, but war is interested in you”. We’ve got a lot of gold and silver stockpiled and locked away too Greg.
What kind of world government do we want though. Should there be a world government.
We don’t have as much as you think.
Okay, Greg. We can always go back to worth-less paper money “fiat” currency then.
Rand Paul 2028
Oh no, not that
Americans are not Germans, viz. as a people cannot create a national consensus, pursuant to planning their future resource requirements. The solutions posed in this article have been axiomatic for years now. Idealists typically lack understanding of economic, finance or “capitalism. Theron lies the problem with any nation that doesn’t appropriately educate its populace, both in order to be informed, and of course to plan a life based on the balance of profit and loss. Any nation that maintains its economy through countrrfeitimsm, only delays a general understanding that money doesn’t simply grow on trees. All wars start on the basis of commodity and financial wars. Oddly, the American leadership is only skilled at recognising problems once tgey become grossly manifest.
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