Elected politicians in Washington, D.C. have historically and traditionally given very little thought to Canada, except when they were forced to give Canadians a voice in a decision, either because of American politics or a foreign war or the threat of war. One of the very few times for example, that Canada was mentioned in the American 2008 presidential campaign, was early on when a clueless primary candidate said that she would reopen NAFTA if chosen by her party and elected. The candidate even frightened her own supporters with her ignorance of modern North American trade dynamics, and she was saved from this gaffe only when her handlers managed to spin the story to be about a Canadian diplomat who had apparently commented after hearing the remark that Canada could easily find other buyers for its resources if the US wished to terminate the NAFTA agreement. The story incredibly became “those Canadians are threatening us with a trade war.”
American environmentalists who have disproportionate power to their numbers, due to selective investments in elected politicians, regularly whine about the evils of extracting oil from shale (USA) or from tar sands (Canada), but this never prevents them from driving their Canadian-fueled and often -manufactured vehicles to rallies against such production.
My uncle Yale died on the beach at Anzio while disarming a German mine, so that Canadian and US forces could land. He and his brother were transported to the Anzio beach along with their fellow Canadian Rangers in a landing vessel made in the USA and under cover of US Naval aviators and US battleship artillery. But that was then. I have heard since that day that Canadians can always be counted upon to do the right thing – i.e., to do whatever is best for the USA.
Today however, with regard to the rare metals that form the brain and nerves of our technological civilization, Canada is perhaps ready to negotiate with Washington as a more than equal trading partner. America’s version of a permanent civil service, the hired employees of the various cabinet offices, which are, in particular, Defense, Interior, and Commerce, tell me that they are aware of the critical importance of Canada’s natural resources to the American way of life, and that they have always been aware. Unfortunately, as I am told over and over again, the politicians are in charge but on natural resource supply issues, other than oil, they are clueless.
Last year, there began to be a sea change in Washington with regard to at least one category of non-oil resources, the rare earth metals. Bureaucrats first at the US Department of Defense, and then at the Departments of Commerce and Interior, began to study the market fundamentals and both the military an industrial uses of the rare earth metals. I was asked to participate in roundtable discussions about rare earth metals at the Pentagon, and I was able to invite and get acceptances from Washington officials to speak at conferences, of which I was an organizer.
In late 2009, I was asked to comment on legislative additions to the US National Defense Appropriations Act for Fiscal Year 2010 (FY210 NDAA), which required the Secretary of Defense to initiate a study of the rare earths market to be made and delivered to Congress by April 1, 2010. Warp speed for such a study in Washington time. The mandate for the study became law when President Obama signed the FY2010 NDAA. It is underway at the Government Accountability Office (GAO) with data collection being supervised by the Department of the Interior, which is in charge of both actual mining and resource data collection in the USA. I have also participated in the drafting of an Act known as RESTART that would fund the restarting of the rare earth supply chain into the USA. This is the most rare earth metals activity I have ever seen by the US Federal Government, but it still has a long way to go before it is enacted or funded. But it is actually underway.
The rare earth supply “crisis” that came to public attention last year when China hinted it might further restrict the export of rare earths and even stop completely the export of the higher atomic numbered, “heavy,” rare earths, brought Canada onto the radar screen in Washington. Canada has two rare earth mining ventures well on the way to production, Great Western Minerals Group (GWMG) and Avalon Rare Metals, as well as a myriad of others in process, all financed in Toronto or Vancouver. Canada also now has the first funded ETF venture for rare metals, including the rare earths, which will create in part an essentially private strategic stockpiling venture. I told a conference that I chaired in Washington, D.C., last October, that America’s future is dominated by the two “Cs,” China and Canada. I said that unless the US immediately recognizes that its resource base must be North American not just American, then Canada and China would become larger and larger natural trading partners in natural resources.
I believe more than ever, that unless Washington and Wall Street recognize the critical importance of developing natural resource production in Canada, there will sooner or later be a reckoning. The reckoning will be that the American standard of living declines from one generation to the next for the first time, even as that of Canada and China grows.
http://www.jackliftonreport.com/2010/03/the-supplying-of-canadian-rare-metal-resources-to-the-usa-washingtons-perspective/
