In recent years, the U.S. government has been introducing new measures to increase the supply of key minerals, aiming to reduce its dependence on China. According to a report by The Wall Street Journal on June 25th, the U.S. Army is leasing land at several bases across the country to mining companies for the construction of mineral processing plants. These plants will be responsible for processing and refining the key minerals necessary for the U.S. defense industry.
U.S. Army officials revealed that they have signed long-term lease agreements with several mining companies, including Titan Mining, EnergyX, Ioneer, and REalloys. It is expected that these companies will invest $2 billion in mineral projects. The official stated that the U.S. Army will not charge cash, but instead obtain a certain amount of processed minerals as part of the agreement.
Reports indicate that the relevant companies will be responsible for the design, construction, and operation of the mineral processing plants. Titan Mining will extract graphite from Army bases in Alabama or Arkansas. EnergyX plans to extract lithium in Texas. Ioneer will extract boron from military centers in Utah. REalloys will be responsible for processing rare earth minerals.
At the border between Texas and Arkansas, EnergyX has obtained rights to mine lithium deposits covering an area of 200 square kilometers near the Red River Army Arsenal. The U.S. Army recently announced that the Red River Army Arsenal will be used for the rapid manufacturing and testing of small drones, and lithium is a key component for drone batteries.
"This is a fantastic situation because lithium required for batteries can be sourced directly from the ground in this region."
The Wall Street Journal noted that the agreements between the U.S. Army and these companies are still in their initial stages, with the ultimate goal of enabling the Army to directly obtain key minerals needed for military equipment such as drones and body armor. It is expected that the related companies will begin building factories as early as 2027, and start producing minerals in 2028.
Source Image: Utah Army National Guard's Tulls Field Ammunition Depot, U.S. Department of Defense
China controls more than 90% of the world's production capacity for rare earths and graphite, about 70% of the production capacity for lithium-ion batteries, and at least 80% of the production capacity for boron compounds. Many minerals mined in the United States still need to be transported to China for processing, and then sent back to the United States. Almost all of the boron used in the manufacture of military products such as body armor, nuclear reactors, and submarines is processed in China.
The U.S. government is seeking to obtain key minerals through other channels in order to reduce its dependence on China. Jeff Vaxman, the U.S. Army's chief deputy assistant secretary for facilities, energy, and environment, stated, "Time is pressing, and we are aware that supply from China could be cut off at any time."
The U.S. government wishes to invest billions of dollars in establishing a critical mineral supply chain that is 'uncontrolled by China'. However, analysts generally estimate that this project will take at least ten years.
Some experts believe that leasing land from some military bases by the U.S. Army can address the issue of industrial land for critical mineral projects. John Speer, a professor of civil and environmental engineering at Colorado School of Mines, pointed out that considering issues such as water, air, and environmental pollution, as well as safety hazards in workplaces, it is difficult to carry out mineral processing operations near densely populated areas.
Renting land from military bases can help companies avoid this issue. For example, graphite processing often requires hydrofluoric acid, a corrosive substance that can contaminate water sources. Conducting such projects on civilian land in the United States involves multiple regulatory procedures and permits from local and state governments. However, using land from military bases can simplify some of these oversight and approval processes.
Titan Mining CEO Rita Adiyani said that the graphite processing plant built at the U.S. Army base will cost between $30 million and $50 million, and further environmental assessments are required. "There is no shortcut in this matter." Currently, the company mainly mines graphite in New York, then transports it to Germany for processing, and finally returns it to the United States to be delivered to customers.
Although the United States has set ambitious targets for critical minerals, implementation still faces challenges. Alvin Campa, a researcher at Lyvi, a defense technology company in the US, said that the economic benefits of processing and extracting critical minerals are often a major obstacle to building new factories. He pointed out that such industries have very low profit margins, and without government support, the cost of setting up factories is also extremely high.
Kamba believes that the reason why this approach works in China is that China is a global industrial superpower.
Japanese media outlet Nikkei Asia previously reported that China holds an absolute dominant position in key minerals such as rare earths. Although the US government has provided substantial support and investment in various projects, it is unlikely that the US will quickly replace Chinese suppliers. Independent analyst Chris Berry said, "This is not something that can be resolved within five years. It will take more than ten years to establish a new system."
