In a funky group of office buildings in Reston, Virginia sits the US Geological Survey (USGS), a bureau of the Department of the Interior that “provides science about the natural hazards that threaten lives and livelihoods; the water, energy, minerals, and other natural resources we rely on; the health of our ecosystems and environment; and the impacts of climate and land-use change.”

While it’s not clear from this cryptic mission statement, one of the important jobs of the USGS is the creation, every 3 years, of the US Critical Minerals list. The Energy Act of 2020 defines a critical mineral as “a non-fuel mineral or mineral material, essential to the economic or national security of the U.S., which has a supply chain vulnerable to disruption.” The current Critical Minerals list can be found here. It now lists 50 critical minerals critical to the U.S. economy and national security – 15 more commodities than the U.S.’s first list of critical minerals created in 2018. A large part of the increase in the new list of 50 is the result of splitting rare earth elements and platinum group elements into individual entries. Significantly, the USGS has added nickel and zinc to the list.

The list is compiled from research by USGS staff and a review of at least a thousand public comments. Having minerals on the list is supposed to be a good thing for mining companies, but the benefits are not obvious or quantifiable. Some argue that being on the list confers “soft” benefits, but permitting authorities like the EPA and Forest Service state explicitly that their process is the same whether the project involves critical minerals or not.

This might suddenly be changing, however. In February of this year, within a day or two of Russia’s invasion of Ukraine, the Biden administration issued an executive order requiring US agencies to “prioritize production and processing of certain critical minerals.”  While we don’t yet have case studies on what this will look like, it may be a sea change. And if you’re shocked it came from a Democratic administration, you’re in good company!

It now seems a reasonable bet that projects involving critical minerals may see expedited permitting and at least some relief from red tape. It’s also probable that the critical minerals list will expand, since as US relations with Russia and China deteriorate, US vulnerability to supply chain disruptions is growing. According to Forbes, if we break down the 90 minerals tracked by the USGS, the US is 50% import-dependent for 50 of them, and 100% import-dependent for 20. This is truly an Achilles’ heel of the US economy and military.

The threat posed by US reliance on foreign minerals is not abstract. In February of this year, in retaliation for US support of Taiwan, China banned rare earth exports to Raytheon and Lockheed Martin, forcing the latter to temporarily suspend production of the F-35 fighter jet. While some of those rare earth elements are now being re-sourced from other countries, it’s a process that can take months or years – which would be a real problem in wartime.

This example illustrates the gravity of the issue, and explains why politicians are taking note; it also explains why the process of designating critical minerals needs to become more dynamic.

A case in point is potash, 40% of which comes from Russia and Belarus, and all of which is now subject to sanctions. Potash was on the critical mineral list in 2018, came off the list in 2022 (because supply chain risk was deemed benign), and now should arguably go back on the list tomorrow. If the US is serious about the risk of foreign mineral dependence, the USGS may need to start working overtime.

Although it’s an imperfect document, the critical minerals list is carefully considered and may now become a bigger factor in the mining industry. The recent executive order looks like one of the few issues in Washington that can enjoy bipartisan support, and if the federal government follows through on pledges to “prioritize production and processing of….critical minerals,” expect the designation of critical minerals to become more politicized. Miners might want to start shopping for lobbyists, since the critical minerals list looks likely to become more….well…. critical.

Source: United States Geological Survey.

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Robert (“Bob”) Scannell has broad experience in finance, capital markets, economics, and investment management. Bob is managing partner at a family office investing in emerging markets, commodities, real…

Hallelujah, someone actually lists ‘the list’ — welcome Bob. I love it.

#5 Beryllium. US is far and away the largest producer in the world. BUT it’s on the list because of potential SPOF – Single Point of Failure. One mine, one processor. The listings are more complicated than they seem at first glance.

Nick It’s even worse than you think. Last time I looked there was only one producer of tungsten rod used in armor piercing ammunition in the USA, and no producer of cobalt salts for batteries, or of battery grade lithium. The Chinese strictly prohibit the export of critical metals’ processing technology. From where are we going to “reshore” state of the art, competitive, technology.

Hi Bob and Jack, You called it – critical mineral 51 should be the supply/value chains to actually extract, purify, and process to a usable product any of the ores of the first 50 CMs, should we actually mine it domestically.

Over 50% of Tin is used for soldering electronics

You didn’t mention that

I don’t trust your list

Whether a mineral should be in the list of critical minerals is a factor of timing. The reason that the USGS needs to update the list every three years is the fact that we don’t want to stay behind the sudden geopolitical challenges that occur at any given time. Since the entire world including the US is heavily dependent on China for majority of the minerals in this list, we would need investments on research and development projects specifically on the rare earth elements. Thanks.

Do you work with the USGS on this list Hamid? Just curious, as we would be delighted if you did, and hope you will visit again.

he mineral is an inorganic, crystal clear solid. The mineral is formed by natural processes and has a distinct chemical composition. Minerals can be identified by their characteristic physical properties, such as crystalline structure, hardness, streaking and cleavage.

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