We can wait no longer to publicly address the impending minor metals crisis in the North American market.

The term minor metals is an anachronism for those metals, for which prior to the Second World War, there were no significant industrial uses. The rapid advance of technology since 1939 has transformed our civilization irreversibly and made so thoroughly obsolete the original meaning of the term minor metals that I am confident that our time will one day soon be referred to as The Age of Minor Metals.

The significance of the current North American minor metals market is that it is on a path to global insignificance, and that, the cause of this is almost entirely political, not technological. Notwithstanding the facts that, since the end of the Second World War, in particular, the technologies for exploring, extracting and refining energy minerals and metal ores have improved exponentially both in production efficiency, allowing the economical recovery of lower and lower grade natural resources. And, in ever lessening environmental impact, the knee-jerk core of the American activist political community has declared all such activities evil per se and will not accept or even hear anything of the positive effect on drilling and mining of the very same scientific progress, which they claim to worship when it manifests itself as stem-cell research, lithium-ion battery systems development, carbon sequestration or global warming. All of which have now become, literally, the received doctrine of the church of environmentalism, revealed, even though not one of these technologies or theories has shown, or has been shown to have, any practical result.

The anti-mining bias of political environmental activism has now forced the North American minor metals market into a crisis of supply. The once largely, and practically, self sufficient American natural resources production industry has been decimated in the case of metals and reduced to less than half of its former production in the case of gas and oil.

Below is a graph prepared and published by the U.S. National Academies, the scientific and engineering research arm of the U.S. Congress, after it held several meetings of a group convened to study Critical Metals for US Industry in 2007. It is evidence of how close North America is to a minor metals supply crisis, because it measures the impact of either a restriction or a cutoff of supply of the identified critical metals on the ability of U.S. OEM industry to continue to function without them!

This graph was published in October, 2007. In January, 2008, the People’s Republic of China announced a reduction of up to half of its export of rare earth metals, of which the PRC now supplies 100% of the global demand.

The Minor Metals Age Impact of Restricted Supply on NA Industry

North American demand for minor metals, for use in domestic manufacturing, is slowly, but surely, declining, as the domestic supplies dwindle and vanish due to the lack of interest by mining companies in speculating on whether or not they will get operating permits in the face of activist environmental opposition in the U.S. or whether they will get financing in the face of political/environmental opposition as well as the growing credit crisis. End users of minor metals in North America have been steadily moving their actual manufacturing off shore, mainly to Asia, for more than a decade to take advantage not only of low labour costs but, increasingly importantly, of access to minor metals.

Chinese labour costs, the value of the Chinese renimbi versus the dollar and shipping rates have all been rising, and so the politicians and the economists at the very same American companies that sang the song of outsourcing are now singing of ‘insourcing’. Soon they say the low labour cost centres in American such as Michigan’s Saginaw Valley, the birthplace of both GM and the UAW, will see manufacturing operations return to take advantage of the low labour rates, the cheap dollar and the savings on shipping costs.

This is of course, salary and, believe it or not, bonus saving, stuff and nonsense. The failure of American industry and financial institutions to create and implement long term strategies to minimize the risk of both price and availability of minor metals means, in the simplest terms, that strategic manufacturing critically dependent on an ever growing list of minor metals will stay wherever there are supplies of such metals that are available.

This situation did not just now come about. Look at the chart below, courtesy of Great Western Minerals Group [TSX-V:GWG] and the United States Geological Survey.

As an example of what the above chart and the previous graph demonstrate note that in 1994 the U.S. was self sufficient in rare earth metals, and it produced 34% of the global demand for those minor metals. Today the U.S. produces no rare earth metals, but it uses either in domestic manufacturing or in outsourced manufacturing in China 16% of the world’s production of rare earth metals, 20,000 tonnes, all of which are supplied at the moment by Chinese domestic producers. So we have the situation today where, when the U.S. was totally self reliant for a critical mineral commodity, rare earth metals, in 1994, it is today 100% reliant on imports for supplies of that critical commodity and it is 100% reliant on just one exporter, the PRC, for those imports.

North America, as the graph and chart above show, is in danger of a minor metal supply crisis anytime that the domestic demands for those minor metals, in the countries of their production, rise to a level matching the supply of the minor metal.

Now look at the following chart of the fundamentals of the rare earth metals from 2000 through 2012, Courtesy of GWG and Dudley Kingsnord, neither of which is responsible for the title I have put over the chart.

If the above chart (projection) is correct then Chinese domestic demand for rare earth metals will exceed its, and the global, supply in early 2012, just four years from now.

Unless North American businessmen wake up right now and make long term provisions in the form of full finance for minor metals production in North America then those North American industries that critically depend on rare earth metals will shut down for good beginning in 2012, and make today’s recession look like a minor correction.

Perhaps we should also mention the critical minor metals on the first graph above, the restriction or elimination of the supply of which will shut down the North American OEM automotive, aerospace, and electronic industries.

The philosopher, Ludwig Wittgenstein, famously said Whereof we cannot speak thereof we must remain silent. Our political elites have made this dictum cover the domestic production of minor metals. As the philosopher/comedienne, Joan Rivers, might counter, Can we talk? To which I will finally add: Before it is too late!