Target tariffs to leverage West’s crit-mins: Ucore CEO

Targeted rather than blanket tariffs could effectively boost the West’s critical mineral supply in the face of China’s dominance, Ucore Rare Metals (TSXV: UCU; US-OTC: UURAF) CEO Pat Ryan told a conference in Toronto.

United States President Donald Trump’s tariff policies have become a major economic concern in North America even though his executive orders exempt critical minerals such as rare earths processed in Canada.

“Blanket tariffs are bad,” Ryan told the Critical Mineral Institute’s Summit IV on Tuesday. “But targeted tariffs can be used effectively if we carefully think about each critical mineral and where the price sensitivities are, and we put targeted tariffs that can help prop up the bottom floor of a rare earth or lithium or cobalt.”

Ucore, which operates its RapidSX rare earths (RE) separation demonstration plant in Kingston, Ont. and is building a similar facility in Louisiana, is working towards cross-border integration of a critical mineral supply chain. The company is developing the Bokan Mountain heavy RE elements project in southeastern Alaska, for which it completed a preliminary economic assessment in 2013. Ucore also has a partnership with Defense Metals (TSXV: DEFN) to process RE from the pre-feasibility-stage Wicheeda project in northern British Columbia. 

The company reached an agreement for an $18.4 million (C$25.7 million) investment from the United States’ Defense Department to help build the Louisiana plant, Ucore announced Wednesday.

Collaboration is key

Though for now, Trump has opted not to tariff Canadian critical minerals heading south of the border, Ryan stressed that collaboration between economies is essential.

“You have to align. You can’t do it in isolation,” he said, gesturing at a slide showing a map of a conceptual North American supply chain. RE concentrates from Australia and Brazil flows in, which is processed in the U.S. and Canada, and then shipped off to Japan to be made into magnets, and to South Korea and the United Kingdom to be made into metals.

Tariffs aside, critical mineral supply chain integration also isn’t secure yet in Western countries because they have yet to form a viable economic model, Ryan explained.

New model needed

“In North America, every mine, every beneficiator, every processor, provider, downstream manufacturer, you’ve all got to be profitable,” he said. “In China it’s state backed, and it’s [got a] long term plan. If one part falls apart, the state steps in. It’s a bit of an unfair advantage, but it’s something we have to deal with.”

Another lesson the West can learn from China is the timeline for its mineral strategy, Ryan said.

It will cost a lot of money, it will be a multi-decade procedure, and it has to be consistent from one political administration to the next.

Long timeline

“It can’t be that the new administration comes in, [and says] ‘Well, that one’s gone. They were bad. They didn’t know what they were doing. Let’s put a new procedure in place.’”, he said, “It’s got to be like the Chinese approach, where it’s a long game.”

With the U.S. economy representing about 26% of the global economy, Ryan suggested the remaining 74% of the world’s economy will figure out how to work well together if the U.S. decides to further go it alone.

“We can’t let that happen,” he said. “China will absolutely be the beneficiary of this tariff war that continues the way it is. They were the ones that take that 74% and they make the most out of it.”