Trump eyes seabed minerals to rival China: FT

U.S. President Donald Trump is in the process of drafting an executive order that would enable America to stockpile the wealth of critical minerals found on the Pacific Ocean seabed, the Financial Times reported on Saturday.

The move is aimed at countering Chinese global dominance in the critical minerals sector by tapping into a largely unexploited part of the Earth. The polymetallic nodules formed on the sea floor are said to contain rich amounts of nickel, cobalt, copper and manganese used in batteries, as well as traces of rare earth minerals, a group of 17 elements required to build high-tech applications.

China is currently by far the world’s biggest supplier of rare earth minerals, accounting for nearly 70% of the global production, the US Geological Survey estimates. The Asian nation also controls about 90% of the world’s processing of rare earths, and is a world leader in the processing of battery metals.

Strategic reserves

The executive order, according to FT, would allow the U.S. government to build a “strategic reserve” of these critical minerals, like it had done with gold and oil. The plan is to “create large quantities ready and available on US territory to be used in the future” in case of a conflict with China that might constrain imports of metals and rare earths, the FT sources said.

Amid escalating trade tensions between the two countries in recent months, China has already leveraged its supply dominance by placing export restrictions on some rare earth minerals.

The critical minerals stockpile is part of a broader push to fast-track deep-sea mining applications under U.S. law, and to create onshore processing capacity, the FT added. It coincides with a Reuters report earlier this month that the Trump administration is considering an executive order to accelerate seabed mining by allowing companies to bypass authorities backed by the United Nations and seek permits directly from the National Oceanic and Atmospheric Administration.

Licensing rules 

The Metals Co. (Nasdaq: TMC), which has one of the more advanced underwater mining projects on the Pacific seabed, said last month it may bypass the UN body that hasn’t finished developing licensing rules, the International Seabed Authority. The company may instead seek approval under the U.S. Hard Mineral Resources Act of 1980 before the end of June. 

Like the U.S., China has also set sights on mining the ocean floor, and according to reports, is poised to lead the “race to the bottom”.

As for the minerals found onshore, Trump signed an executive order last month to activate the Defense Production Act with the aim of boosting domestic mining and processing of critical minerals and making the U.S. less reliant on China.