Global Navigation Element.

Fall 2007 Vol. 7 No. 3

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Hot Commodities in a Global Economy

The energy crisis of the 1970s prompted the U.S. government to keep a better tally of the world supply of key energy resources, especially oil. With energy prices again skyrocketing, the government's regularly updated statistics on energy supply and demand are as important as ever. However, there are several nonfuel mineral resources equally critical to the U.S. economy and national security for which such statistics are unavailable.

The former U.S. Bureau of Mines explored techniques to recover strategic and critical minerals, ©James L. Amos/Corbis

Although metallic and nonmetallic minerals are essential parts in Information Age devices such as laptops and cell phones, as well as in thousands of other everyday products, neither the federal government nor industry have an accurate grasp of how secure supplies of these minerals are, says a new report from the National Research Council. This is despite the fact that the same emerging economies that are driving up energy prices are also increasing competition for nonfuel minerals, many of which are not available domestically.

Foreign dependence and global competition are not necessarily a cause for concern, but they do require that the United States be more aware of minerals whose supply could be disrupted by political and economic risks, said the study committee, which developed a matrix for assessing current mineral criticality. Platinum group metals, indium, manganese, niobium, and certain rare earth elements were all deemed highly critical, meaning there are few or no substitutes for their essential uses and that their supplies are potentially at risk. The committee only had time to assess a limited number of minerals but said that government could use the matrix to make similar classifications which, in turn, should be used to guide a broader data-collection effort. The U.S. Geological Survey's Minerals Information Team collects such data, but the quantity and level of detail of its information has waned in recent years along with a decreasing budget. The USGS team, or another federal entity, needs to be given resources, autonomy, and authority similar to that of the Energy Information Administration if the nation is going to anticipate and attempt to mitigate restrictions in the minerals markets, the committee concluded.

Platinum mining, ©Brendan Ryan/Gallo Images/CorbisA lack of data on mineral availability also is impeding efforts by the Defense Department to anticipate what materials it needs on hand for a national emergency, says a second Research Council report by a committee that examined the necessity of the National Defense Stockpile. The stockpile, established just prior to World War II, has not kept pace with changes in the global marketplace or modern military needs, the committee found, leading it to deem the materials stockpile "ineffective." The stockpile is required by law to hold strategic and critical materials -- 28 at last count -- to preclude a dependence on foreign sources in event of war or other national emergency. But there is a disconnect between what's stored and what the military is likely to actually need, the committee said. In fact, billions of dollars worth of materials considered unnecessary given current military scenarios have been sold from the stockpile in recent years.

Still, growing world demand for minerals and fragmented global supply chains mean threats to assuring an adequate supply of materials for national defense remains. Instead of trying to improve the current stockpile, the committee recommended a whole new approach -- not a new bureaucratic organizational structure, but a total system approach that reflects current geopolitics. Stocks may still be needed, but decisions about whether to maintain them should be tied to well-defined defense needs and assessments of risks to supply.   -- Bill Kearney

Minerals, Critical Minerals, and the U.S. Economy. Committee on Critical Mineral Impacts on the U.S. Economy, Committee on Earth Resources, Board on Earth Sciences and Resources, Division on Earth and Life Studies (2007, approx. 216 pp., ISBN 0-309-11282-6). The committee was chaired by Roderick G. Eggert, professor and director, division of economics and business, Colorado School of Mines, Golden. The study was funded by the U.S. Geological Survey and the National Mining Association.

Managing Materials for a 21st Century Military. Committee on Assessing the Need for a Defense Stockpile, National Materials Advisory Board, Division on Engineering and Physical Sciences (2007, approx. 124 pp., ISBN 0-309-11257-5). The committee was chaired by Robert H. Latiff, vice president and chief engineer and technology officer, space and geospatial intelligence business unit, Science Applications International Corp., Chantilly, Va. The study was funded by the Defense National Stockpile Center of the Defense Logistics Agency, U.S. Department of Defense.

Both reports are available from the National Academies Press, tel. 1-800-624-6242.

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Copyright 2007 by the National Academy of Sciences