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THEMOSAICAPPROACH:aMultidimensionalStrategyforStrengtheningAmerica’sCriticalMineralsSupplyChainReportpreparedbyDuncanWood,AlexandraHelfgott,MaryD’Amico,andErikRomaninSUPPLY

CHAINExecutiveSummaryTheUnitedStatesfacesatroublingscenariowhenitcomestothesupplychainforcriticalminerals.Rapidlyincreasingdemand,under-developednationalresources,intenseinternationalcompetition,andyearsofne-glectinthisissueareaplacetheU.S.atadistinctdisadvantagevis-à-visChinainsecuringaccesstothemet-alsandRareEarthElementsthatarevitalfortheenergytransitionandforgeopoliticalambitions.Thispaperreflectsthedialoguesustainedbyahigh-levelgroupofstakeholdersinthesummerof2021andarguesthattheUnitedStatesmusttakeanumberofkeystepstomakethecriticalmineralssupplychainmoreresilient.Centralamongthesestepsare:●Governmentactions:✦✦Explicitlyrecognizethelinkbetweencriticalmineralsontheonehandandgeopoliticalandcli-mategoalsontheotherPrioritizethedevelopmentofnationalresourcesandprocessingfacilitiesintheUnitedStates,whilealsoembracingnewtechnologicalsolutions✦✦✦FocusonstrengtheninghumancapitalinthecriticalmineralssectorStreamlinethepermittingprocessforopeningnewminesConsiderthestockpilingofcriticalminerals●Privatesectoractions✦✦✦✦LowertheriskprofileofminingforinvestorstofacilitateinvestmentintheindustrySeeklong-term,fixedpricecontractstoguaranteesupplyInvestinnewtechnologiestolowercostsInvestinhumancapitalthroughuniversitiesandcommunitycolleges,aswellaslifelonglearningapproaches✦Highlighthowminingcontributestoacleanenergyfuture●Internationalactions✦✦✦TheU.S.mustworkwithinternationalalliesandpartnerstodevelopnewresourcesLeveragetheUSMCAandstrongminingindustrieswithinNorthAmericaWorkwithinternationalpartnerstocreateaglobalregimeforcriticalmineralsthatemphasizesminimumstandardsforESGl3IntroductionInthesummerof2021,theWilsonCenterconvenedstrongdisincentivefordevelopingresourceswithinaCriticalMineralsWorkingGroup,madeupofstake-theUnitedStates.holdersfromindustry,academiaandcivilsociety,toOurWorkingGrouprecognizesthatthereisnosilverbullettorespondtothesechallenges,butrathertheneedfora“MosaicApproach,”involvingactionbyboththeprivatesectorandthegovernmentatthenationalandinterna-examinethevulnerabilitiesthatexistinthesupplychain,andtodiscusshowtheprivatesectorandgov-ernmentcanaddressthem.Thisreportdrawsonthemajorinsightsandrecommendationsoftheimpres-siveknowledgeandexperienceoftheworkinggroupandoffersanalternativechannelthatfeedsintothestakeholderengagementprocesscalledforinPresi-dentBiden’sreviewofAmerica’ssupplychains.thereisnosilvertionallevels.Intheprivatesector,therebullettorespondtothesechallenges,butrathertheneedfora“MosaicApproach”mustbeincreasedstrategicinvestmentinresourcedevelop-Theworkinggroupidentifiedthreemainvulnerabili-tiesinthesupplychain.First,theUnitedStatesmustmentandprocess-facetheever-risingdemandforcriticalmineralswhileing,technology,andconstrainedbychronicunderinvestmentinmining,processing,infrastructure,andhumancapital.Sec-humancapital,whichmustaccompanyond,theUnitedStatesmustcompeteonaglobalba-effortstochangetheriskprofile,realandperceived,sisagainstChinaandtheEuropeanUnionforaccesstocriticalmineralsandmustaddressthegeographicconcentrationofbothextractiveandprocessingactivities.Toreferencethemostobviousexample,China’sdominantpositioninthesupplychainstemsnotonlyfromitsownershipandcontrolofcriticalmineralsmines,butalsoprocessingfacilities.Third,thereisagovernancechallengethatimpactsthefirsttwovulnerabilitiesinwhichminingfirmsfromtheUnitedStatesandotherwesterncountriesmustadheretojustifiablystringentcompliancemeasuresintheareasofenvironment,societyandtransparen-cy/anti-corruptionregulations,regardlessofwhethertheyareoperatingdomesticallyorinternationally.PermittingandlegislativerestrictionsonU.S.min-ingfirmsplacethematacompetitivedisadvantagecomparedtoChinesecompetitorsandprovideaoftheminingsector.Furthermore,theindustrymustconcretelyimproverelationswithbothdecision-mak-ersandthegeneralpublic.Forthegovernment,oneofthemostimportantstepstobetakenisperhapstheeasiest:theexplicitandrepeatedrecognitionthatcriticalmineralsareanessentialcomponentofboththeUnitedStates’geopoliticalcompetitivenessanditsfighttomitigateclimatechange.Thisacknowledge-mentbyU.S.politicalleadersthatneitherclimatenorgeopoliticalgoalscanbereachedwithoutsecureaccesstocriticalmineralswillhelptobringaboutaparadigmshiftinthinkingaboutthesector,andtherequiredlegislativeandregulatorychangeneededtoencourageinvestmentintheextractionandprocess-ing,infrastructure,recycling,andhumancapital.Finally,thereportexaminesinternationalactionsthatmustaccompanytheseprivateandgovernmentalef-4lTheMosaicApproach:amultidimensionalstrategyforstrengtheningAmerica’scriticalmineralssupplychainforts.TheUnitedStatesanditsalliesmustinvestsig-U.S.mustalsobeopentousingallystandardsasnificantdiplomaticandeconomiccapitalintobuildingastartingpoint,ratherthanreinventingthewheelamoreeffectiveglobalregimeforthegovernanceofcriticalmineralsextraction.TheharmonizationofstandardsatagloballevelwillreducetheadvantagecurrentlyheldbyChinesefirmsandothergeopoliti-calrivals.Ofparticularimportancewillbeeffortstoincreasetransparencyandanti-corruptionmeasures.TheUnitedStatesmustlooktoitsalliesandfriendstoplayamoreimportantroleinthesupplychain,andtheU.S.mustbewillingtoworkwiththemtodevelopresourcesandstandardizepractices.Thethroughthedevelopmentofnewstandardswhichwillnotonlycosttime,butwillalsocreatediscrepan-ciesbetweenstandardsacrossnations.Anotherkeystepistorecognizetheurgencyofthesituationandprioritizeaction.ThemovestakenbyrecentU.S.administrationsprovidesomehope,buteffortsmustbesustainedandstrengthened.Inthatspirit,thisreportoffersanoptimisticperspectivethatfocusesonsolutionsratherthanobstacles.VelikiKriveljmineofZijinBorCopper,oneofthelargestcopperreservesintheworld,ownedbytheChineseminingcompanyZijinMiningGroupinBor,SerbiaonMay2,2021.Source:MirkoKuzmanovic/l5AnUncertainPresentandaFutureFullofConcern:MappingtheSupplyChainInitsdiscussions,theCriticalMineralsWorkingGroupfocusedonsomeoftherawmaterialswhicharecrucialforenvironmentalsustainabilitygoals,theiruses,andwheretheyarelocated,extracted,andprocessed.TheU.S.andmanyinternationalpartnersfaceaninherentdisadvantageduetothenationalsecurity,andeconomicprosperity.Thesein-geographicalconcentrationoftheseminerals.cludedlithium,nickel,cobalt,copper,andcertainrareRareearthelements(REEs)areabundantthroughouttheearth’scrust,butonlysufficientlyconcentratedtobeminedandprocessedeconomicallyincertainlocations.Chinaisoneofsuchlocations,possess-ingoneofthelargestknownREEreservesintheworld.Thecountryconstitutesabout44million2.ThemajorityofthisoreislocatedintheChineseautonomousregionofInnerMongolia.ChinaminesthemostREEsofanynationonearthandisrespon-siblefornearly65%ofallextraction.Thisnumberisearthelementswhichareneededtomanufacturelithium-ionbatteries,motorsofelectricvehiclesandwindmills,aswellasmanyotherapplications.1Gov-ernmentsandbusinessleadershavesetambitiousgoalsinhopesofmitigatingthedramaticeffectsofglobalclimatechange.Theseinvolvetechnologicalresponsesthatdependheavilyoncriticalminerals.Mineralssuchaslithium,nickel,andrareearthelementsalreadyplayanimportantroleintheglobaleconomy,yetdemandfortheserawmaterialsispre-likelyhigherifweincludeblack-marketandunofficialdictedtoincreaseexponentially.Tounderstandthecriticalmineralssupplychain(CMSC),itisimportantREEmininginthePeople’sRepublicofChina.NotonlydoesChinaminethemostREEs,themajoritytodetailthescopeofthedemandoftheseminerals,ofREEseparationandprocessingalsooccursin44millionmetrictonsChinahasover1/3ofallREEReservesSource:/daily/resource-investing/critical-metals-investing/rare-earth-investing/rare-earth-reserves-country/6lTheMosaicApproach:amultidimensionalstrategyforstrengtheningAmerica’scriticalmineralssupplychainChina,witharound85%ofallprocessingtakingplaceinthecountry.IntermsofREEmining,theUnitedStatesisadistantsecond,extractingonlyaboutaquarteroftheamountminedinChina.ThesolemineintheUnitedStatesextractingREEsistheMountainPassmineoperatedbyMPMaterialsCorp.inCaliforniawhichin2020contributed16%ofglobalsupplyofREEs,accordingtoUSGS3.OthernotableminersofREEsareMyanmarandAustralia.TheDemocraticRepublicofCongo(DRC)istheworld’slargestproducerofcobalt,producingroughly90,000metrictonsoftheworld’s140,000metrictonsin20196.TheCopperBeltinCentralAfricacontainstheworld’slargestprovencobaltdepositswithothersignificantdepositsalsolocatedinAustralia,Cuba,thePhilippines,andCanada.IntheUS,cobaltresourcesareprimarilylocatedinMinnesotaandIdaho.Michiganishometoonecobalt-producingmine,butthismineonlycontrib-utesonepercentageofglobalcobaltsupply.Whilemostoftheworld’sThelithiumsupplychainpresentsadifferentpictureasitisdominatedtoalesserextentbyonecountry.ThelargestprovenreservesareinChile,Australia,Argentina,ChinaandtheU.S.Lithiumtypicallycomesfromrichundergroundbrinedepositsorhard-rockspodumenedeposits.Australiaistheleadproducingnation,contributingabout46%ofglobalmineproduction,predominantlyfromitshard-rocklithiumdepositsinWesternAustralia.Chinaisinthirdplaceminingabout17%oflithiumin2019,al-thoughtheyareresponsiblefornearly60%ofgloballithiumprocessing.TheU.S.hasonesmallerlithiummine,contributing5,000metrictonstotheNotonlydoescobaltisminedintheDRC,manyminesareChinaminethemostREEs,themajorityofREEseparationandprocessingalsooccursinChinaownedbymultination-alminingcompaniesandinvestors.Chi-nese-ownedminingcompanies,includingChinaMolybdenum,controlabout70%350,000metrictonsofglobalsupply4.Cobaltisintegraltothemanufacturingoflithium-ionbatteriesandotheradvancedtechnologies.Whilethereareanumberofusesforcobalt,mostcobaltthatisminedisusedtomakelithiumionbatteries(around57%accordingtotheCobaltInstitute5).cobaltminingandalsorefine70%to80%oftheworld’scobalt.Whilelessthan20%ofDRCcobaltcomesfrom‘artisanal’andsmallscalemines,theunfairlaborpracticesassociatedwiththeseoperationshastarnishedthereputationofcobaltandledtomanyWesternOEMsseekingtoreduceoreveneliminatecobaltfromtheirbatteries.7Asmanyentitiessearchforalternativesourcesofcobalt,somehavelookedtotheoceanfloor.Itisestimatedthatover120milliontonsofcobaltcanbefoundinmanganesenodulesandcrustsontheflooroftheAtlantic,Indian,andPacificOceans.Theseresourceswillrequiretimeandlarge-scaleinvestmentstodevelop.l7COBALTMININGPRODUCTION(datainmetrictons)6006,4004,700U.S1,8006,3004,7003,2002,300AustraliaCanada2,8001,900China7003,600CongoCubaMadagascarMoroccoPalauNewGuineaPhilippinesRussia95,000SouthAfricaOtherCountriesCOPPERMININGPRODUCTION(datainthousandmetrictons)U.S2,000910380AustraliaCanada290Chile3,5003601,0601,0602,400ChinaCongoGermanyJapan330470KhazakstanMoroccoRepublicofKoreaMexico6805401,60067009,800PeruPolandRussia1,100ZambiaOtherCountriesSourceforallpiechartsonthese2pages:USGS,CriticalMineralsYearbook(pg8)(/periodicals/mcs2021/mcs2021.pdf)NICKELMININGPRODUCTION(datainmetrictons)1,100170,0001,1001,100U.S290,000AustraliaBrazil120,000Canada280,000320,00049,00047,000ChinaCubaDominicanRepublicIndonesiaNewCaledoniaPhilippinesRussia760,000200,000OtherCountriesLITHIUMMININGPRODUCTION(datainmetrictons)1,2006,20090014,000U.SArgentinaAustraliaBrazilChileChinaPortugalZimbabwe40,00018,0001,900RAREEARTHMININGPRODUCTION(datainmetrictons)1,0001002,700

2,0008,0003,000U.S38,000AustraliaBrazil500Burma17,00030,000BurundiChinaIndia140,000MadgascarRussiaThailandVietnamOtherCountriesItisvitalheretoemphasizethatcobaltdemandisgrowingsignificantly.Whiletheamountofcobaltpervehicleisindeedreducingasbatterychemistriesshift,overalldemandismultiplyingsorapidlywiththeriseindemandforbatterycapacitythattheDRCremainsvitallyimportant.Oceanfloorandnon-DRCNearly80%ofglobalnickelisusedtoproducesuperalloysandstrongmaterials,suchasstainlesssteel.Theamountofnickelusedforbatterymanufacturingisquicklyincreasing.ThelargestnickelproducingcountriesintheworldareIndonesia,thePhilippines,Russia,NewCaledonia,aFrenchterritoryinthesupplyprovidealternativesourcesinthelongerterm,SouthPacific,andCanada.TheU.S.ishometoonlyandrecyclingtoo,butduringthisdecadetheDRCispivotal,whichmeansthattheU.S.governmentandprivatefirmshavelittlechoicebuttobuildtieswiththecountry.onenickel-producingmine,locatedinMichigan.NearlyallofU.S.producednickelisexportedabroadforfurtherprocessingandrefinement.PolymetallicnodulesontheoceanfloorrepresentasignificantdomesticopportunityforincreasingU.S.suppliesofnickel,withtheaddedbonusthattheyalsocontaincobaltandmanganese.Nickelandcopperaretwoothermetalsintegraltotheglobalenergytransitionandnationalsecurity.CopperproductionisdominatedbyChilefollowedbyPeru,China,theUnitedStates,andtheDRC8.CopperandcopperalloysareutilizedinbuildingandItisclearthattheUnitedStatesdoesnotholdanadvantageingeographicconcentrationofcriticalinfrastructureprojects.Additionally,copper’sconduc-minerals,whichisakeyfactorintheCMSCandtivitymakesitakeymineralforelectricalandelec-compoundsthevulnerabilitiesidentifiedbythistronicproducts.CopperisessentialforanodecurrentWorkingGroup.collection,cellwiring,andforEVcharginginfrastruc-ture.Duetotheimportanceofelectrificationtomeetglobalenvironmentalsustainabilitygoals,copperisastrategicandimportantresource.10lTheMosaicApproach:amultidimensionalstrategyforstrengtheningAmerica’scriticalmineralssupplychainKnowthyself:identifyingtheweaknessesintheCMSCTheWorkingGrouphasidentifiedthreedistinct,yetintertwined,vulnerabilitiesinthecriticalmineralssupplychain:thechallengeofmeetingrisingde-mand,globalcompetitionwithChinaandbeyond,andgovernancechallenges.whichiscomplicatedbyunderinvestment,mining’slong-termorientationandassociatedhighriskprofile,andquestionsofhumancapitalandR&D.Despitebesteffortstosynchronizesupplyanddemand,discrepanciesremain.Onereasonforthemismatchrelatestoinvestors’preferenceforshorter-termhori-zonsthanwhatispossibleinthelong-termorientedminingindustry.Fromtheexplorationanddiscoveryphases,topermitting,andthentoextractionandpro-cessing,miningisprofoundlycomplexandnuancedwhichmakesinvest-RISINGDEMANDThefirstchallengeisthescaleandpaceofrisingdemand.Asmentioned,demandforcriticalmin-eralsoutpacesthatofsupply,andwillcontinuetorise,particularlyconsideringthekeyrolethatcriticalmineralswillplayinthecleanenergytransition.AnInternationalEnergyAgency(IEA)assessmentfoundthattoreachtheParisAgreementgoalsofalessthan2°celciusriseinglobaltemperature,cleanenergytechnologieswoulddemandfourtimesthecurrentmineralinputbytheyear20409.TheIEAforeseesmineraldemandspecificallyforelectricvehiclesandgridstorageforEVbatteriestoincreaseatleast30timesby2040andestimatesatriplingofmineraldemandby2040forlow-carbonpowergeneration10.Whilethesepredictionstakeplaceoverthecourseofdecades,exponentialincreasesindemandforlithiumarealreadyhappening.Ina2021quarterlyearningsreportSQM,thesecondlargestlithiumproducingcompanyintheworld,predictedgloballithiumdemandtoincreasebynearly50%in202111.Alreadyunabletokeeppace,consideringlagtime,permittingchallengesandunderinvestmentininfrastructure,technologicalinnovation,andhumancapital,thisissuewillcontinuetocompound12.eIEAforeseesmentdifficultandattimes,risky.Longleadtimesforcriticalminer-alsandREEs,oftenduetoextensiveprocessesandhighlybureaucraticpolicies,significantlyimpactsupplychains,butareoftenoverlookedinconversationsabouttheminingsupplymineraldemandspecificallyforelectricvehiclesandgridstorageforEVbatteriestoincreaseatleast30timesby2040.chain’svulnerabilitieswhichtendtofocusontheextractiveandprocessingportionsofthesupplychain.Extensivepermittingprocessesresultinlongleadtimestobringminesonline,whichinturndelaysproductionandimpedestheoverallsupplychain.Inaddition,legalchallengestothepermittingprocessoftenextendleadtimesbeyondthe10yearmark.The100-Dayreviewconcluded:“Forthesecondsupplychainstepofrefiningandprocessing,theU.S.hasanevenmoresignificantdeficitthaninrawproductioncapacityascriticalmineralsminedintheThecriticalmineralsandrareearthsindustriesfacethischallengeoflimitedsupplyandrisingdemand,l11U.S.areoftenexportedforprocessing.IncreasingU.S.expertise.Anobstaclefacingmanycompaniesistheprocessingcapacityalonewouldbolsterthesupplychaintrendindecliningenrollmentinminingprogramsamong…Currently,theU.S.haslimitedrawmaterialproductionyoungpeople.Accordingtoa2019reportproducedbycapacityandvirtuallynoprocessingcapacity.”13theMiningIndustryHumanResourcesCouncil(MiHR),enrollmentratesinundergraduateminingengineeringprogramsdeclinedby12%from2015to2016acrossTheperceivedhigh-riskprofileofminingisadeterrentforinvestment.Explorationandassayrisks,feasibilityconcerns,pricingrisks,andpotentialpoliticalchallengesallposesignificantrisktotheminingindustryandhaveresultedinchronicunderinvestment.Thisunderinvest-mentresultsinalostopportunityforU.S.competi-tiveness.TheUnitedStatesisonthebrinkofahugeopportunitywithintheREEproductionspace-miningandproducingmorerareearthsin2020thanever,andstill,estimatesshowthattheU.S.andCanadacom-binedhaveasurplusof17.7milliontonsofrareearthresources14.Despitethis,theU.S.remainsheavilyreliantonChinaforrareearthcompoundsandmetals,withChinaprovidingtotheU.S.anestimated80%ofimportedrareearthelementsbetween2016and201915.ThisU.S.relianceuponChineseREEsispartiallyattributabletoinsufficientdomesticprocessingabilities.InvestmentinproductionfacilitiescanalignU.S.supplywithdemandandremaingloballycompetitivewhereREEsarereadilyavailable.WithoutahighconcentrationofREEs,investmentininnovationandothersolutionscanbringcompetitiveadvantage.AsDemandforCleanEnergyTechnologiesGrows,SoDoesDemandforCriticalMinerals506X40304X20102020MeetingParisAgreementgoalsNet-zeroemissionsby2050PredictedGrowthofSelectedMineralsAccordingtotheIEA5040302010Findinganddevelopingnationalresourcesiseasiersaidthandone.TheU.S.hasonlymappedapproximately12%ofitslandintermsofmetalreserves:theUSGSestimatesitwouldtake10+yearstofindandmapallU.S.resources,withanother7-10yearstogetthoseresourcestomarket,completelymissingthewindowwithinwhichtheU.S.requirescriticalminerals.Whilenewdiscoveryprojectsareimportantforthelongterm,theU.S.willneedtoaddressknownresourcesforitsshortandmid-termstrategy.422521197Humancapitalisanothercrucialelementofthecriticalmineralssupplychain.Resiliencyandcompetitive-nessrelyonavailabilityandqualityofbothtalentandLithiumGraphiteCobaltNickelRareearthsSource:IEAreport(/reports/the-role-of-critical-minerals-in-clean-energy-transitions)12lTheMosaicApproach:amultidimensionalstrategyforstrengtheningAmerica’scriticalmineralssupplychainCanadianuniversities16.ScottDunbar,associateprofes-directthreattoU.S.supplychains,competitiveness,sorattheNormanB.KeevilInstituteofMiningEngineer-andgeopoliticalambitions,butrevealsmanylearningingattheUniversityofBritishColumbia(UBC),arguesthatapossiblecauseofdecreasedenrollmentis17:anddevelopmentopportunitiesfortheU.S.intermsofextraction,processing,andmanufacturing.“...isthattheindustryhasnotshedthepercep-tionthatitis‘dirty.’Sustainabilityandlong-termjobprospectsmustbeatthecoreofallthetechnologicaladvancementsifthereisgoingtobeanadequatenumberofnewentrantstotheindustry,hesaid.”Thereisanurgentneedforpublicandpolicy-makereducationaboutChina’sdominanceofcriticalminer-alsandapressingnecessitytoidentifyalternativestoChinaforU.S.procurementofcriticalminerals.ThoughChinamaintainsrelativelyhighstandardsforminingactivitieswithinitsborders,thesamecannotbesaidforthatofChinesecompanies’foreignopera-tions,whereESGstandardsmaynotbeinplaceandlocalgovernmentsandcorporationsdonothaveal-ternativestoChineseoperations.China’sdominancemakesitexceedinglydifficulttoincentivizecleaner,moresustainable,andmoreequitablepracticesinbothextractionandprocessingofcriticalminerals.Technologicaladvancesintheminingindustrymustbeginwithsignificantandconsistentinvestmentsinemployeeeducation,training,anddevelopment.The2021MiHRCouncilreportpredictstheneedforbetween29,000and48,000newhiresinafive-year,post-COVID-19scenario18.FurtherinvestmentforR&Dandhumancapitaliscrucialtolowercosts,increaseefficiencies,addressdifferencesinquality.Thiswillstrengthencriticalmineralssupplychains,whilealsoaligningmineralindustrypositionswithsustainabilityandcleanenergy,bothofwhichareattractivegrowthindustriesintheU.S.industriesintheU.S.WhereChinalacksgeologicaladvantages,itcom-pensatesbyestablishingvalue-addedadvantages.Forexample,whilethemajorityofglobalcobaltissourcedintheDRC,Chinaistheworld’slargestcon-sumerofcobaltandalsoproducesthemostcobalt,mostofwhichisimportedfromtheDRC,accordingtoUSGS19.Westernfirmscannotreasonablycom-petewithChinawhenitcomestoprice,particularlyincircumstanceswheresubsidiesandpoorlaborpracticesarecommon.Mostimportantly,however,GLOBALCOMPETITIONANDTHECHINACHALLENGEAsecondchallengeforU.S.supplychainsisglobalcompetition.TheUnitedStates,EuropeanUnion,andChinahasbeenenactingitsownstrategicvisionforChinacompeteforresources,intellectualproperty,andtalentintheminingsector.Theplayingfieldiscriticalmineralsbypouringbillionsofdollarsintopro-ductionassets.TheUnitedStateshasfallengravelynotlevel,however,asproducersindominantsupplierbehindininvestinginresource-richemergingcoun-countries(which,inmanycases,meansChina)facelowerESGstandardsandmorefavorablefinancingterms.BecausetheU.S.,EU,andotherscannotcompetewithChinasolelyonprice,otherfactorsmustbetakenintoconsideration.tries,puttingitselfatadisadvantageandallowingfurtheropportunitiesforChinaandothercompetitorstoexerttheirdominance.Chineseriskreductioneffortshavehelpedthecountrytodominateandmaintaincontroloverthecriticalmineralsindustry.China’sdriveforself-suffi-ciencyanditsdominanceofemergingtechnologies,suchaselectricvehiclebatteryproduction,hasbeenTrendlinesshowthattheUnitedStateshasfallenfarbehindChinaintheareaofcriticalmineralsproduc-tionandprocessing.China’sdominancehereisal13madepossiblebycollaborationsbetweenthepublicandprivatesectors,withsubstantialR&Dfundingfromthegovernment.InbothRussiaandChina,governmentsubsidiesputcompetingU.S.firmsatahugedisadvantage,whichreducestheviabilityofsupportiveofESG.Ofcourse,therearemyriadissuesaroundESG,includingpolit-icalwill,processing,...theUnitedStateshasfallenfarbehindChinaintheareaofcriticalmineralsproductionandthedomesticindustrialbaseandultimatelycreatesaandabove-grounddangerousforeignreliancethatcanundermineU.S.commercialandnationalsecurityinterests.Oneofthemostessentialrolesofgovernmentistoprovideforthecommondefense,andassuch,theU.S.gov-ernmenthasaresponsibilitytosecuresupplychainsconditions.ThecurrentopacityoftheCMSChascreatedasignificantneedfornewinternationalprocessing.criticaltonationalsecurity.Enactingpolicies,suchasagreementsontracking,transparency,anddisclosure,productiontaxcredits,thatwouldleveltheplayingfieldbetweensuppliersintheglobalREEsupplychainwouldpromoteavibrantdomesticindustrialbasecapableofminingandprocessingREEma-terialsnecessaryforU.S.defenseandcommercialin-terests.ForAmericatosuccessfullyembraceviableREEminingandprocessing,theU.S.governmentmustplayanactiveroleinensuringthatitsdomesticcompaniesremaininbusiness.especiallygiventhedominanceofcountrieswheretransparencyisfarfromapriority.Permittingpoliciesplayasignificantr