February 16, 2018 / 8:59 PM / a month ago

UPDATE 1-U.S. seeks to boost output of 35 minerals, reduce import reliance

(Adds comments from Canadian potash producer Nutrien, Aluminum Association of Canada, Rio Tinto aluminum CEO, paragraphs 6-8, 12, 13)

By Valerie Volcovici and Susan Taylor

WASHINGTON/TORONTO, Feb 16 (Reuters) - The United States should boost domestic production of 35 critical minerals including uranium, cobalt and lithium, to reduce its reliance on foreign suppliers, the Interior Department said on Friday.

Aluminum and potash are also on the draft list of 35 critical materials used in basic manufacturing, batteries and electronics. It was the department’s first step to carry out a December presidential order to break U.S. dependence on foreign minerals.

Lithium and cobalt are vital components of the rechargeable batteries that power electric vehicles. Battery makers and auto companies such as Tesla Inc and Volkswagen AG have been hunting for long-term supplies of the minerals.

“Any shortage of these resources constitutes a strategic vulnerability for the security and prosperity of the United States,” said Tim Petty, assistant secretary of the Interior for water and science.

The administration wants to identify new domestic sources of critical minerals; increase domestic exploration, mining and recycling; give miners and producers electronic access to better mapping and geological data; and streamline leasing and permitting for new mines.

It will be challenging to boost U.S. production of potash, used to make fertilizer for farmers, said Canada’s Nutrien Ltd , North America’s largest potash producer.

“There’s just not reserves that are economic in the United States, but there are lots in Canada,” said spokesman Richard Downey.

“I think that the U.S. recognizes that it’s a critical nutrient for corn and grain farmers, in particular, and they need access to the Canadian potash.”

The department seeks public comment until March 19.

Raising U.S. output of non-fuel minerals and fossil fuel resources is part of the Trump administration’s America First policy, aimed at boosting U.S. exports while curbing imports using tariffs and other protectionist measures.

On Friday, the Commerce Department recommended tariffs on steel and aluminum, raising fears among some observers of a trade war.

Canada, the world’s largest supplier of aluminum to the United States, will keep working with U.S. officials to secure favorable treatment, said Jean Simard, president of the Aluminum Association of Canada.

“U.S. law and policy consider Canada’s resource and manufacturing capabilities to be an integral part of the U.S. defense industrial base,” said Alf Barrios, chief executive of Rio Tinto’s Canadian-based aluminum business.

The Commerce Department is also weighing a petition from two domestic U.S. uranium producers to curb imports from Russia and Central Asia to lift the domestic industry.

Full list of minerals here: here (Additional reporting by Susan Taylor in Toronto; Editing by David Gregorio)

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