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Washington Wants America to Catch Up to China's Manufacturing — a Mining Boom in North America Might be Needed

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·2 min read
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Photo by omid roshan on Unsplash

The continued competition and economic back and forth between the United States and China has spurred American policy to move toward a renewal of old capabilities in heavy industry and manufacturing. America used to be the king of the majority of sectors, including mining, refining and processing raw materials required for advanced manufacturing activities.

However, these industries have shifted through decades of advancement on China’s part and the decomposition of pieces within the entire supply chain in America. While much of the economic activity in the U.S. has shifted toward technology and services, China has stepped in the gap with lower labor costs, integrated supply chains and minimal environmental regulations.

Chart by Felix Richter on statista

Crucially included in the required ingredients for manufacturing in the 21st century are a host of materials including precious metals and rare earth metals. Both are used in industries and sectors ranging from electric and hybrid vehicle production to battery manufacturing, green energy, defense, telecommunication, medical devices and other technology inputs.

A recent piece by Marketplace.org stated that “The U.S. was 100% net import reliant on rare-earth elements in 2018, importing an estimated 11,130 metric tons of compounds and metals valued at $160 million. Eighty percent of those imports were sourced from China, according to the U.S. Geological Survey.”

A New Mining to Manufacturing Era?

In terms of another crucial material, the United States is No. 4 for raw tonnage of global gold production, compared to China’s 1st place. If U.S. policy is to be able to move toward more domestic production, significantly more mining and processing capabilities might be needed. This scenario could bode well for existing domestic mining companies to expand operations back toward historic levels across North America.

U.S.-based giants like Newmont (NYSE: NEM), Freeport McMoRan (NYSE: FCX) and Albemarle (NYSE: ALB) are likely looking to capitalize on American policy. However, other domestic players might also reap big rewards. American Pacific Mining (CSE: USGD.CN) (OTCQB: USGDF) is an example of a mining company with existing projects focused completely in America that could look to further expand domestically.

Raw materials such as gold, silver, copper, zinc, lead and manganese are some of the precious metals that American Pacific currently mines — all inputs that are likely to play significant roles in a new paradigm of American manufacturing.

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