US report urges steps to reduce reliance on foreign critical minerals

The U.S. Commerce Department on Tuesday recommended urgent steps to boost domestic production of critical minerals, warning that a halt in Chinese or Russian exports could cause “significant shocks” throughout the U.S. and foreign supply chains.

The report includes 61 specific recommendations – including an assessment of new Buy America provisions and low-interest loans – to boost domestic production of minerals essential for the manufacture of mobile phones and a host of other consumer goods, as well as key weapons systems.

It also called for closer cooperation with key allies such as Japan, Australia and the European Union, and directed reviews of government permitting processes to speed up domestic mining.

U.S. reliance on foreign minerals has worried U.S. officials since 2010, when China embargoed exports of so-called rare earth minerals to Japan during a diplomatic row. The issue took on new urgency in recent weeks after Chinese officials suggested rare earths and other critical minerals could be used as leverage in the trade war between the world’s largest economic powers.

“The United States is heavily dependent on foreign sources of critical minerals and on foreign supply chains resulting in the potential for strategic vulnerabilities to both our economy and military,” the Commerce Department said in a long-awaited report outlining a new federal strategy on critical minerals.

The report called for a combination of short-term measures, such as stockpiling, and longer-term moves to catalyze exploration, design and construction of new mines, as well as re-establishing domestic downstream manufacturing supply chains.

(By Valerie Volcovici, David Lawder and Andrea Shalal; Editing by Leslie Adler and Cynthia Osterman)