In 1954, the United States was only fully reliant on foreign sources for eight mineral commodities.

Fast forward 60+ years, and the country now depends on foreign sources for 20 such materials, including ones essential for military and battery technologies.

This puts the U.S. in a precarious position, depending largely on China and other foreign nations for the crucial materials such as lithium, cobalt, and rare earth metals that can help build and secure a more sustainable future.

America’s Energy Dependence

Today’s visualization comes from Standard Lithium, and it outlines China’s dominance of the critical minerals needed for the new energy era.

Which imported minerals create the most risk for U.S. supply chains and national security?

Natural Resources and Development

Gaining access to natural resources can influence a nation’s ability to grow and defend itself. China’s growth strategy took this into account, and the country sourced massive amounts of raw materials to position the country as the number one producer and consumer of commodities.

By the end of the second Sino-Japanese War in 1945, China’s mining industry was largely in ruins. After the war, vast amounts of raw materials were required to rebuild the country.

In the late 1970s, the industry was boosted by China’s “reform and opening” policies, and since then, China’s mining outputs have increased enormously. China’s mining and material industries fueled the rapid growth of China from the 1980s onwards.

Supply Chain Dominance

A large number of Chinese mining companies also invest in overseas mining projects. China’s “going out” strategy encourages companies to move into overseas markets.

They have several reasons to mine beyond its shores: to secure mineral resources that are scarce in China, to gain access to global markets and mineral supply chains, and to minimize domestic overproduction of some mineral commodities.

This has led to China to become the leading producer of many of the world’s most important metals while also securing a commanding position in key supply chains.

As an example of this, China is the world’s largest producer and consumer of rare earth materials. The country produces approximately 94% of the rare earth oxides and around 100% of the rare earth metals consumed globally, with 50% going to domestic consumption.

U.S.-China Trade Tensions

The U.S. drafted a list of 35 critical minerals in 2018 that are vital to national security, and according to the USGS, the country sources at least 31 of the materials chiefly through imports.

China is the third largest supplier of natural resources to the U.S. behind Canada and Mexico.

This dependence on China poses a risk. In 2010, a territorial dispute between China and Japan threatened to disrupt the supply of the rare earth elements. Today, a similar threat still looms over trade tensions between the U.S. and China.

China’s scale of influence over critical minerals means that it could artificially limit supply and move prices in the global clean energy trade, in the same way that OPEC does with oil. This would leave nations that import their mineral needs in an expensive and potentially limiting spot.

Moon Shot: Building Domestic Supply and Production

Every supply chain starts with raw materials. The U.S. had the world’s largest lithium industry until the 1990s—but this is no longer the case, even though the resources are still there.

The U.S. holds 12% of the world’s identified lithium resources, but only produces 2% of global production from a single mine in Nevada.

There are a handful of companies looking to develop the U.S. lithium reserves, but there is potential for so much more. Less than 18% of the U.S. land mass is geologically mapped at a scale suited to identifying new mineral deposits.

The United States has the resources, it is just a question of motivation. Developing domestic resources can reduce its foreign dependence, and enable it to secure the new energy era.

In the clean energy economy of the future, critical minerals will be just as essential—and geopolitical—as oil is today.

—Scientific American

These Charts Put the Historic U.S. Job Losses in Perspective

When recessions hit, it’s not unusual to see millions of jobs lost.

Such episodes are a regular part of the business cycle and when they occur, most businesses do their best to tough things out. Then, as time progresses, it gradually becomes clear that spending must be curtailed, budget cuts must be made, and workers must unfortunately be sent home.

This economic process normally takes months, or even years, to unwind.

But, the COVID-19 pandemic has thrown a wrench into the economic status quo, creating a situation that is incomparable to any previous downturn. Instead of a gradual economic transition to slower growth prospects, business operations have suddenly screeched to a halt with no clear window to resume.

Beyond Comparison

The Great Lockdown of the economy has been completely unprecedented, both in terms of the speed of the shutdown and its impact on jobs.

As a result, the statistics being released are completely surreal. Perhaps the best example of this is number for initial jobless claims in the U.S., which tops 22 million over the last four weeks.

Worst U.S. Job Losses on Record (Four Week Period)

Source: FT

As you can see above, the number is 10x higher than many of the worst four-week job losses on record, so historical comparisons don’t come close.

In other words, if you were using recent recessions as a potential barometer of how bad things could get for jobless claims, the numbers coming from COVID-19 crisis just blew up your model.

The Recession Time Machine

To get further context on the numbers above, it’s worth jumping in a time machine to revisit what happened to job numbers in previous recessions:

• Stagflation and Oil Shocks (1973-75)
  This recession put an end to the Post WWII global economic expansion, and was characterized by the 1973 oil embargo, the aftermath of the Nixon Shock, and the collapse of the Bretton Woods system of international finance. Unemployment and inflation were both high (stagflation), and the unemployment rate in the U.S. reached 9.0% in May 1975.
• The Double-Dip Recession (1980, 1981-1982)
  This “W-shaped” recession saw economic contraction first in 1980, only to return again in 1981. This corresponded with the Iranian Revolution, as well as Fed chair Paul Volcker’s aggressive policy to rein in inflation with high interest rates. Unemployment peaked at 10.8% in 1982 — the highest rate seen since the Great Depression.
• The Great Recession (2009)
  The most recent recession in memory peaked with 10.0% in unemployment in October 2009. It took until 2016 for unemployment to fall back to pre-recession levels.

Finally, it’s worth noting that during the Great Depression (1929-1933), unemployment reached a historic high of 24.9%. To get to a comparable equivalent in modern times, there would need to be 41 million Americans out of work permanently.

Room for Optimism

Although the initial jobless claims are staggering and clearly without modern precedent, there is a case to be made for cautious optimism.

Many of the aforementioned recessions took months or years to culminate, with peak job losses occurring at the tail end of each recession. The current crisis, now being called “The Great Lockdown”, caused many businesses to shut doors suddenly and against their will. It also corresponded with unexpected closures of national borders and the halting of regular trade activity around the world.

When and if normal economic activity resumes, it’ll be interesting to see how much of the damage is temporary.

Editor’s note: While we show the figure for peak unemployment during the Great Depression in both the chart and article, there is no comparable number available for weekly jobless claims. According to Federal Reserve data, it appears that the weekly data series on initial jobless claims started in the 1960s.