America’s Metals, Minerals, And Materials Misery -

America’s Metals, Minerals, And Materials Misery

Mar 27, 2018Jeremy ParkinsonFinance0

Today I revisit a subject that was prominent in the American conscious post-global economic crisis and brought to the forefront by the rare earth element and lithium bubbles from 2009 to 2011:

The United States of America depends on imported supplies for most of its industrial metals, minerals, and materials demand.

I spoke and wrote extensively about the US of A’s dearth of domestic production and dependence on risky, corrupt, unstable, and/or unfriendly sources in 2011 and 2012. Here are selected examples: (Mercenary Interview March 4, 2011; Mercenary Musing, August 6, 2012; Mercenary Video, June 9, 2012).

Over the past 14 months, the Trump administration has rolled back government regulations, streamlined bureaucracies, cut taxes, and proposed major infrastructure buildouts and tariffs on imports of aluminum, steel, and Chinese goods. Combined with a stronger economy, booming stock markets, and higher commodity prices, it seems likely that mineral demand will increase in the short to midterm. So this is an opportune time to provide an update on our overwhelming reliance on foreign sources to meet domestic mineral demand.

The United States Geological Survey publishes an annual compendium of mineral and material commodities and documents domestic production, imports, exports, apparent consumption, and official government stockpiles among other data (USGS Mineral Commodities Summaries).

Let’s start with a chart from the 2017 publication that shows US net import reliance for the 64 industrial metals, minerals, and materials with >25% dependence:

From the chart and footnote listings in the USGS document:

The US imports 100% of 21 mineral commodities, 50% or more of 29, and more than 25% of another 14.

The country imports less than 25% of apparent consumption for the following 17 materials: beryllium, cadmium, cement, industrial diamonds, gypsum, iron and steel, iron and steel slag, lime, magnesium metal, fixed nitrogen-ammonium, perlite, phosphate rock, construction sand and gravel, salt, crushed stone, sulfur, and talc.

The US of A is a net exporter of 16 commodities: metallic abrasives, boron, clays, diatomite, gold, helium, iron and steel scrap, iron ore, kyanite, molybdenum, industrial sand and gravel, selenium, soda ash, titanium dioxide pigment, wollastonite, and zeolites.

The 2017 United States net import reliance data for 97 minerals is summarized in the following table:

Americans should be concerned not only because of our dependence on other countries for the majority of essential industrial commodities but also because of some of the countries that we are most dependent on.

Let’s look at countries that are unfriendly, unstable, and/or corrupt and the number of materials for which we import a quarter or more (25%) of annual demand:

China is our primary, secondary or tertiary source for 31 commodities, mainly specialty metals and industrial minerals with small markets.

Russia is an important source for 12 commodities, including five major metals and one major agricultural mineral.

South Africa is the largest supplier of six major metals and a significant supplier of two industrial minerals.

Other countries with a high geopolitical risk that supply one or more minerals include Bolivia, Gabon, Georgia, Guinea, Kazakhstan, Mozambique, Philippines, Rwanda, Senegal, and Ukraine.

The United States, despite being >25% dependent on foreign sources for 64 materials, holds strategic stockpiles of only 14.