US toolkit stakes claim to world's rare-earth minerals

The US State Department has helped launch an online tool to stake its claim to many of the world’s rare-earth minerals.

The US has become increasingly concerned about securing a stable supply of critical minerals used in car batteries, solar panels, and wind turbines.

Many of those resources are in emerging markets that may be seen as too risky by American investors, who require ‘best-in-class’ standards.

That raises the potential for “two really bad outcomes,” Francis Fannon, the US assistant secretary of state for energy resources, said.

“Either the world will not get the minerals it needs in order to fuel energy transition technologies,” or “that investment would only come from those who are less concerned about governance issues, transparency, corruption, environmental standards, and best practices,” Mr Fannon said.

The new initiative is designed to give countries that have nascent resource industries an online ‘toolkit’ to develop assets and meet the standards of US investors.

Mr Fannon made the comments ahead of the annual convention of the Prospectors’ and Developers’ Association of Canada, in Toronto, at which the online toolkit is being launched.

By 2050, as much as 24% of the world’s electricity will be used to power electric cars, and solar and wind energy will provide almost half the world’s electricity.

Many of the minerals required for decarbonisation are used in other high-demand products, including smartphones.

As just one example, nickel demand from lithium-ion batteries alone will grow by over 15 times between 2018 and 2030.

China, which already produces roughly 70% of the world’s rare earth minerals, supplied about 80% of America’s rare earth imports in the three years ended 2018, according to the US Geological Survey.

State-owned Chinese companies have also been active in buying up critical mineral deposits outside the country. “Africa is a huge continent for a lot of these critical minerals and the Chinese have been making heavy advances in that area, offering support and offering investment,” Colin Hamilton, managing director of commodities research at BMO Capital Markets, said.

Meanwhile, coronavirus has “crystallised” America’s determination to diversify its supply chain of key materials and products, Mr Hamilton said.

• Bloomberg