The Elements of Innovation Discovered
The Elements of Innovation Discovered
Critical Minerals Alliances - September 12, 2023
Click on image for full infographic.
China's gallium and germanium export bans are believed to be a countermove to the CHIPS Act and other plays made by the U.S., Japan, and Netherlands to restrict the export of semiconductors and chipmaking technologies to China.
A recent infographic produced by Visual Capitalist raises both figurative and literal red flags when it comes to America's reliance on imports for the minerals and metals critical to the nation's high-tech sectors, military readiness, and envisioned low-carbon energy future.
While the United States' heavy dependence on other countries for critical minerals is not new to those who follow the metals and mining sectors, Visual Capitalist's unique ability to present complex data in a visually compelling and easy-to-understand format underscores just how heavily America leans on others when it comes to specialty minerals.
If you count the 14 rare earth elements individually (which is how they are presented on the U.S. Geological Survey list of 50 critical minerals), America depends on other countries for more than 95% of its needs for 26 minerals – 20 of which are primarily sourced from China.
In addition to the rare earths that go into a broad range of high-tech and consumer goods, this list of minerals America depends predominantly on China for the bulk of its supply includes gallium, a semiconductor metal used in computer chips; graphite needed for the lithium-ion batteries powering electric vehicles and broad range of portable electronic devices not tethered to an outlet; and tantalum used extensively in miniaturized electrical circuitry in smartphones and other devices.
"Even as our mineral needs skyrocket for everything from electric vehicles to advanced energy technologies and critically important defense systems, the U.S. is stumbling when it comes to our supply chains," National Mining Association COO Katie Sweeny said in January, when the USGS data underlying the Visual Capitalist infographic was published. "We have never been more dependent on China and others for the minerals that are absolutely essential to modern life and, with each new announcement of a blocked mine or a foreign sourcing agreement with countries that have questionable labor practices, we are locking in our position of competitive weakness."
America's critical import dependence, and the geopolitical implications that come with that, are underscored by China's implementation of state-controlled restrictions on the exports of gallium and germanium.
Gallium serves as a primary ingredient in semiconductors vital to next-generation smartphones, telecommunication networks, automobile electronics, LED lights, thin-film solar panels, and medical devices.
Germanium is a powerful ingredient in fiber optics, night vision equipment, triple-layered solar panels, and transistors for classic and quantum computers.
Various semiconductor products made from both critical tech metals are used to make the computer chips in virtually every electronic device.
According to the USGS, China produced 98% of the world's gallium during 2022 – Russia came in second at around 1%. When it comes to germanium, 54% of America's imports come from China.
As of Aug. 1, Chinese companies must get special government permission to ship this pair of tech metals to buyers outside of the country.
These curbs are seen as a geopolitical response to the CHIPS Act and other actions taken by Washington lawmakers to limit the export of microprocessor technology to China.
"Gallium and germanium are chess pieces in a geopolitical game of enormous proportions," Christopher Ecclestone, a mining strategist at the consulting firm Hallgarten & Company, told Foreign Policy.
Considering that the U.S. is import-dependent for 41 different minerals and metals, and China is the primary provider for 23 of them, America is at a raw materials disadvantage in this geopolitical chess match.
This weakness has raised red flags for senators James Lankford, R-Okla., Mitt Romney, R-Utah, and Gary Peters, D-Mich., who introduced a bill in June to create an intergovernmental task force to identify opportunities to increase domestic production and recycling of critical minerals.
"Relying on China for critical minerals means relying on our adversary for batteries, medical supplies, and military equipment," said Lankford. "We need to prioritize American-produced and made energy solutions and give U.S. suppliers a seat at the table."
The senators hope this task force will shrink the red-flag-raising list of U.S.-imported critical minerals presented on the Visual Capitalist infographic.
"Our nation's dependence on adversarial nations like China for critical minerals poses serious national security and economic threats," said Peters. "This bill will strengthen our domestic critical minerals supply chain, create good-paying jobs, and ensure our advanced manufacturing sector can continue to compete on the global stage."
With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.
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