Militaries, Metals, and Mining

As an example, nickel is among the six critical minerals used in lithium-ion batteries that power electric vehicles. It is also crucial for military applications like jet turbine engines. But it was nickel’s utility for energy storage and not its utility for aerospace or defense that motivated a Presidential Determination qualifying it for Defense Production Act Title III funding.

In response to growing global demand, and with a strategic vision, China has become the world’s largest producer of many of these metals and their associated components and products. According to the U.S. Geological Survey, China is now the leading producer of 30 critical minerals, including titanium, vanadium, cobalt, and aluminum. (Russia is the second largest producer of vanadium.)

The challenge is as clear now as it was in the 1960s for the CIA. China, or other countries that dominate these supply chains, may be unable or unwilling to supply these materials to U.S. industries in the future. And even if China does not continue to be the main producer of extracted critical minerals, it very often dominates other parts of the supply chain, such as processing or component manufacturing.

In the case of titanium, for instance, Chinese production accounts for 52 percent of global titanium sponge production. The United States has a single domestic supplier of titanium sponge and relies on imports from Japan, Kazakhstan, and Saudi Arabia for the rest of its needs.

Securing Supply
Understandably, this situation alone might make military planners and acquisition professionals nervous. Add in a post-pandemic world and the Russia-Ukraine war, and risks of disruption abound. Whether a potential showdown looms between China and the United States over Taiwan or the South China Sea, or a conflict with Iran beckons, stockpiles need to be replenished to ensure military readiness—and that requires critical minerals.

Supplying Ukraine with artillery, aircraft, drones, munitions, armored platforms, and other equipment has had a noticeable impact on stockpiles. When the Pentagon ordered more Stinger missiles last year, for instance, military contractor Raytheon was hampered by parts shortages.

Neither the United States—nor any other country—wants its national security needs to be in competition with its future climate security. But if both necessities are competing for too little raw material, the price pressure on these commodities and specialty chemicals could be damaging to both endeavors.

Securing access to supply, increasing global and domestic capacity, and diversifying supply chains upstream to downstream should be at the top of the agenda for both nations and private industry. Failure to do so could put both climate mitigation strategies and U.S. military readiness at risk.

If prices end up being prohibitively high, the CIA may find itself scrambling to start a few more companies to secure necessary access from less-friendly countries.

Fabian E. Villalobos is an engineer at the RAND Corporation and professor of policy analysis at the Pardee RAND Graduate School.Morgan Bazilian is professor and director of the Payne Institute for Public Policy at the Colorado School of Mines. This articleis published courtesy of RAND.