Source: Bloomberg
For more than 80 years, the main task of the US Defense Reserve Center is to ensure the guarantee of important raw materials for the U.S. military to prevent the supply from being impacted.Industry insiders compare it as an "emergency call button".
When China suddenly controlled the exit of two niche industrial metals last year, the institutions in charge of the Pentagon and senior officials of the White House were uneasy: the emergency call button was used.Washington has new concerns.
A senior official of the Bayeng government acknowledged that the decision of China's regulation and exports to shock the White House, and Washington, who has always called for China to fight against China in the global metal supply chain, is even more urgent.Insufficient supply of 足 and 应 may affect the production of various equipment such as military satellites, missiles, and night vision mirrors.The official asked anonymous because of internal discussions.
China resumed exports afterwards, and this crisis was avoided.However, due to the reduction of budgets over the years, the strategic reserve of the agency has also dropped to a record low.Former officials of the US Defense Logistics Administration, who manages strategic reserve inventory, said that in order to achieve the scale of energy transformation that Biden and his team envisaged, the United States faces a serious shortage of energy resources.
"This is the most terrible moment when the emergency button does not work," said the former Ministry of Defense reserve experts who were involved in discussing the national security issues required anonymous.
Bloomberg interviewed industry executives, government officials and politicians, divided into three parts.In the first part, it focused on the efforts of Western countries to create a global metal supply chain without China.American activities are particularly active.Officials went to all over the world to negotiate with major allies. American diplomats also persuaded Western miners behind the scenes to expand their investment in the Democratic Republic of Congo with rich copper and cobalt resources.The Biden government also plans to cooperate with the European Union to strengthen the control of global supply chain, and at the same time invested billions of dollars in domestic mining and refining raw material supply chain projects.
However, China's dominant position has not yet shaken.So far, the practical results of the United States have limited results, and some global mining giants' executives are frustrated with no coherent strategy of key mineral supply.Other industry executives urge Washington to follow up with Beijing and formulate a more flexible inventory plan to prevent manufacturers from suffering shortage of supply and manufacturers' affected prices.
The U.S. government seems to have heard it.In December last year, Congress passed a new national defense authorization bill to give the National Defense Logistics Bureau a greater degree of freedom. Long -term procurement no longer requires the approval of Congress, and it also ensures that it will provide $ 1 billion in funds in the future.
Talon Metals Corp.'s chief foreign affairs officer Todd Malan said this is the next chapter about how the United States builds its own supply security discussion.With the help of the US Department of Energy and the Department of Defense, the company is developing a nickel, copper and cobalt ore in Minnesota."In these markets, if the US government becomes a strategic buyer, it will have a great impact."
Love and hate both cobalt
Cobalt prices have dropped sharply by 60%in the past two years.The Chinese government completed two transactions quickly in just a few days last year and bought a record number of cobalt.If the U.S. Defense Logistics Bureau wants to do so, it has to submit a procurement application to Congress, waiting for approval for up to one year.The reform measures of the National Defense Authorization Act should simplify this process.
The bill also allows the US Defense Logistics Administration and domestic refineries to reach a long -term supply agreement, otherwise it is difficult for the United States to process raw materials from countries such as the Congo.Several companies are preparing to build a refinery of key minerals in North America, but extreme turbulent market conditions have caused financing difficulties.
The US domestic manufacturers are still affected by the decline in cobalt prices.The only large cobalt ore in the United States has been suspended for nearly a year.The factory in Edhata is owned by Australia Mining Corporation Jervois Global Co., Ltd.Bryce Crocker, CEO of the company, said that production can be started within a few weeks, but the cobalt price needs to be almost turned up to reach $ 25 per pound, or it gets additional support of the government to complete the completion.
"If someone wants to buy cobalt from us, the government either supports prices, or customers such as car companies provide low prices, which may also work," Crocker said, saying that Washington must be more serious than in the past than in the past.Talking about the inventory problem.
Sanctions, fines, and business in the Congo
The US Department of Defense has warned that without new funds injected, the entire reserve plan will reach the critical point in 2025.In 2021, the U.S. Congress provided $ 1 billion in funds to the National Defense Logistics Bureau, avoiding a major capital crisis.
Officials from the US Defense Logistics Bureau soon began to appear at the small mining conference, and asked carefully to ask about the purchase of a large amount of cobalt. At that time, traders speculated that the Pentagon would become the main strategic buyer again.At the same time, according to industry executives, officials of the State Department visited South America, Africa and Southeast Asia to try to establish diplomatic relations with countries with rich key mineral resources.They also came into contact with commodity traders and private mining companies, asking how to return to countries such as Congo with difficulty but rich mineral resources.
People familiar with the matter said that the reason for taking these actions is because if they are worried that if they are waiting, they will make the US military industry face a periodic supply shock, and Beijing will further tighten the control of key metals.
The United States now hopes that Western companies are investing in the Congo, but Washington's sanctions on mining giants Dan Gertler have hindered progress.He charged a franchise fee for the three non -Chinese cobalt production enterprises in the Congo.
People familiar with the matter revealed that the agreement of buying and selling these projects or raw materials produced by these mines may require the United States to be flexible, so that the company will not contact the sanctioned individuals.Gertler may make a profit from his sanctioned transactions, and this possibility has been condemned by Congo and the International Anti -Corruption Organization.
"We know that the mining industry has twists and turns," said Fernandez from the US State Department."We want to improve."
