US senators introduce bill to counter China’s dominance in critical minerals

Legislation requires US federal agencies to submit report to Congress on world’s critical minerals and rare earths to address ‘information gaps’
The assessment must include which resources are under the control of a ‘foreign entity of concern’ – China, Iran, North Korea or Russia

US-China relations

Bochen Han

Published: 10:00pm, 19 Jan 2024

Why you can trust SCMP

In an effort to counter China’s dominance over critical minerals, a bipartisan group of US senators introduced legislation on Thursday to address “information gaps” and establish a divestment process for American companies.

The Critical Minerals Security Act of 2024 would require federal agencies to submit to Congress a report on all critical mineral and rare earth element resources around the world. The report would be due within a year of the bill’s enactment and every two years thereafter.

The assessment must include which resources are under the control of a “foreign entity of concern” – China, Iran, North Korea or Russia – and which are under the control of the United States or its allies and partners.

The report should also include an accounting of mines that extract significant quantities of critical minerals and rare earths, their estimated annual output, and their owners.

The bill’s lead sponsor is US Senator John Cornyn of Texas, a Republican who has sponsored several pieces of legislation to reduce reliance on China’s critical minerals. Photo: AFP

Thursday’s bill represents the latest in Washington’s efforts to deal with the fact that China produces and processes the bulk of the world’s rare earths and critical minerals.

Critical minerals such as lithium, nickel and cobalt are essential inputs for military supply chains and clean energy technologies. Rare earths are a type of critical mineral that are especially hard to extract.

Concerned that Beijing might withhold the materials to undermine US national and economic security, the Biden administration has incentivised alternative suppliers to replace Chinese refiners through tax credits, trade deals and government loans.

EU unveils ‘double act’ plans to cut China dominance of minerals, clean tech

Last year, the US and European Union began negotiating a critical minerals agreement that would help European mineral processors take advantage of US subsidies and also help the US cultivate the EU’s critical minerals industry as an alternative to China’s.

The lead sponsor of Thursday’s bill, John Cornyn of Texas, is a senior Republican senator who has sponsored several pieces of legislation to reduce US reliance on China’s critical minerals. Other sponsors include Democrat Mark Warner of Virginia, Republicans Todd Young of Indiana and James Lankford of Oklahoma, and Angus King, a political independent from Maine.

“Despite the important role critical minerals play in everything from consumer electronics to military defence, we need more information to secure a reliable, long-term supply of these minerals,” Cornyn said on Thursday.

“This legislation would ensure the US and our allies understand how critical minerals are controlled around the world so we can counter foreign countries of concern.”

China-US battle for African influence shifts to green critical minerals

The report required by Cornyn’s bill must also include a compilation of ways to collaborate with countries that host mines or mineral processing operations.

It further asks for a list of all cases in which entities were forced by a country of concern to divest stock in mining or processing operations for critical minerals, and an accounting of each time one of the governments bought such an entity.

Separately, the bill establishes a process for Americans to notify the US government if they intend to divest from mining or processing operations for critical minerals in a foreign country. The same process would allow government departments to help them find a buyer not located in one of the countries of concern.

Furthermore, the bill calls on the US to strategise with allies and partners to advance mining, refining, separation and processing technologies, and to create a method for sharing the intellectual property that results from the development of these technologies.

In introducing the bill, Warner said: “I am committed to ensuring the US has a resilient supply chain for critical minerals … to combat China’s continued attempts to monopolise control of these minerals”.