【Wen / Observers Network, Zhang Jingjuan】Against the backdrop of increasingly fierce competition in the critical mineral supply chain between the United States and China, the U.S. mining and refining industry has recently made strong demands to the government, calling for a comprehensive "industrial vision" to counter China's dominant position. This year, Washington has significantly increased its support, including investing in mining companies and setting price floors for the only domestic rare earth mine, but industry leaders say these measures still fall short of the "necessary intensity".

According to Reuters on December 4, executives from Perpetua Resources, American Rare Earths, and Westwin Elements raised multiple demands at the Reuters NEXT Summit: the U.S. government should introduce a comprehensive mineral plan, pressure Indonesia to cut nickel production, and accelerate loan approval processes at institutions such as the U.S. Export-Import Bank.

"We need a clear industrial vision," said Melissa Sanderson, director of American Rare Earths, who is advancing a rare earth project in Wyoming. "The key is to build an integrated supply chain plan covering various critical minerals, including antimony, nickel, copper, and rare earths, clearly outlining the entire system from mining to battery manufacturers, magnet producers, and end users."

Perpetua Resources is leveraging the $1.5 trillion U.S. National Security Investment Fund from JPMorgan to build an antimony gold mine project in Idaho. Company executive Mckinsey Lyon stated that the recent series of measures by Washington reflect a state of "frantic scramble", with conflicting project priorities. "Companies have indeed received some policy support, but what is currently lacking is a comprehensive strategic plan and a clear roadmap."

KaLeigh Long, CEO of Westwin Elements, hopes the Trump administration will pressure Indonesia to limit nickel production. This company, which is building the only nickel refining plant in the U.S., is facing financing difficulties. Over the past two years, Indonesia's nickel production has surged and captured 60% of the global market share, causing nickel prices to drop nearly 50%. This has not only forced major global mining giants like BHP to shut down operations but also poses challenges to Westwin's plan to build a 34,000-ton-per-year nickel refining plant in Oklahoma by 2030.

"I urgently appeal to the U.S. government to take simple and direct measures," Long said. She believes that setting quotas for Indonesia's production would almost immediately stabilize nickel prices. She further stated that given the vast size of the nickel market, it is unrealistic for the government to set price floors, and limiting Indonesia's production is a more effective solution. "Currently pushing for price floors is a waste of time; it is neither a stable solution nor a short-term feasible option."

KaLeigh Long, CEO of Westwin Elements, Reuters

Additionally, issues with financing efficiency are another major pain point. Both Perpetua Resources and Westwin Elements have applied for loans from the U.S. Export-Import Bank. Although this bank plans to invest $100 billion to achieve the Trump administration's global energy dominance plan, Long complained about the urgent need to improve the approval efficiency, saying, "The Export-Import Bank's loans can help us advance commercial expansion, but the review process must be accelerated; essentially, it requires a more efficient approval mechanism and more personnel."

The struggle for pricing power presents another layer of competition. Sanderson stated that the rare earth market is much smaller than the nickel market, and price support is crucial before the pricing mechanism becomes more transparent. Currently, the London Metal Exchange (LME) only trades nickel and other varieties and does not involve the Chinese-dominated rare earth market. "The LME has no intention of developing a rare earth trading market, partly because the market itself is a niche within a niche," Sanderson said.

Notably, China controls over 90% of the global rare earth processing capacity. For decades, China has dominated every step, while U.S. rare earth producers and policymakers have been negligent. Now, the U.S. is urgently trying to establish an independent critical mineral supply chain separate from China, aiming to weaken China's dominant position in the global supply chain. However, Gernot Wagner, a climate economist at Columbia University, pointed out in an interview with CNBC recently that China's dominant position in the global mineral industry is no accident. Beijing has long invested heavily in green industry policies, focusing on complete and integrated supply chains.

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Original: toutiao.com/article/7580199948076040731/

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