2024.12.06
The energy transition and digitalization have made critical minerals top of mind for policymakers and investors alike. However, little is said about the role that these minerals play in the defense sector, and the impact of supply chain disruptions on the world’s militaries.
The danger of running out of minerals needed to build weapons and defend territories is a heightened risk now, during a period of intensified global conflict. With wars raging on two fronts – Eastern Europe and the Middle East – and numerous smaller wars like the conflicts in Yemen and the DRC, nations are girding for war and re-arming their militaries, pushing up demand for critical and non-critical minerals including graphite, aluminum, steel, iron, rare earths, nickel and titanium.
Despite this re-arming trend, the US military and its NATO allies face dwindling stockpiles of minerals for military use. The problem is especially grave considering that China, now America’s strongest foe militarily, controls the market for most critical minerals and the United States is dependent on China (and Russia) for the materials required for building its military equipment and weaponry.
Last year China imposed export restrictions on gallium, germanium and graphite, disrupting supplies to the United States.
Graphite is ideal for defense purposes thanks to its unique ability to withstand high temperatures. It can be found in aircraft, helicopters, ships, submarines, tanks, infantry fighter vehicles, artillery and missiles. Graphite is also used in electric-vehicle batteries.
In the event of a mineral shortage, the U.S. could not depend on its closest allies for critical raw materials. NATO has limited mineral production. The European Union imports between 75% and 100% of most metals it consumes, and neither the EU nor its member countries have stockpiles. Nor do Canada or Great Britain have mineral stockpiles.
The United States does not produce any graphite; most of it is imported from China.
Graphite is:
A report last year from the Hague Centre for Strategic Studies found that natural graphite and aluminium are the materials most commonly used across military applications and are also subject to considerable supply security risks that stem from the lack of suppliers’ diversification and the instability associated with supplying countries.
The report says aluminum and natural graphiteare the two most used materials in the defence industry and can be found in aircrafts (fighter, transport, maritime patrol, and unmanned), helicopters (combat and multi-role), aircraft and helicopter carriers, amphibious assault ships, corvettes, offshore patrol vessels, frigates, submarines, tanks, infantry fighter vehicles, artillery, and missiles. These materials are used in components such as airframe and propulsion systems of helicopters and aircrafts as well as onboard electronics of aircraft carriers, corvettes, submarines, tanks, and infantry fighter vehicles. The impact of supply security disruption would hence be very significant, given the multiplicity of aluminum and natural graphite’s applications.
We have clearly reached a point where much more graphite needs to be discovered and mined.
Rick Mills
Ahead of the Herd
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#energytransition #digitalization #criticalminerals #graphite