June 11, 2019 / 2:34 PM / in 2 months

U.S. says it will help boost world minerals output to reduce reliance on China

WASHINGTON, June 11 (Reuters) - The United States plans to help countries around the world develop their reserves of minerals like lithium, copper and cobalt, the State Department said on Tuesday, part of a multi-pronged strategy to reduce U.S. reliance on China for materials crucial to high-tech industries.

Washington grew more concerned recently about dependence on mineral imports after Beijing suggested using them as leverage here in the trade war between the world’s largest economic powers. This would interrupt the manufacture of a wide range of consumer, industrial and military goods, from mobile phones to batteries and fighter jets.

“Over 80 percent of the global supply chain of rare earth elements… is controlled by one country,” the State Department said in a fact sheet outlining the effort, which it has dubbed the Energy Resource Governance Initiative. “Reliance on any one source increases the risk of supply disruptions.”

Under the plan, the United States will share mining expertise with other countries to help them discover and develop their resources, and advise on management and governance frameworks to help ensure their industries are attractive to international investors, according to the fact sheet, which the State Department shared with Reuters.

Doing so will help to ensure global supply for the minerals can meet world demand, which is projected to surge alongside the growing take-up in high-technology goods. “Demand for critical energy minerals could increase almost 1000 percent by 2050,” according to the fact sheet.

The plan was first reported on Tuesday morning by the Financial Times, which quoted State Department officials as saying the effort was being made in conjunction with Canada and Australia.

The plan comes a week after the U.S. Commerce Department recommended urgent steps here to boost U.S. domestic production of “critical minerals”, including by providing low-interest loans to mining companies and requiring defense companies to “buy American”.

The Commerce report also recommended that U.S. agencies review all public lands areas that are currently withdrawn or protected from development and assess whether those restrictions should be lifted or reduced to allow for critical mineral development. (Reporting by Timothy Gardner; Writing by Richard Valdmanis; Editing by David Gregorio)

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