Biden-Harris staying with Trump Onshoring

The Biden Administration released its 100-day Supply Chain Review for critical components and materials. The Review builds on the previous work conducted at the behest of the Trump Administration in connection with its policy on the onshoring of industry. 

The current Administration has been particularly worried about semiconductors and the disruption to the supply chain that has seen everything from second-hand cars to smartphone prices rise. As a result, Samsung, which consumes over half of the chips it manufactures, has been forced to delay the launch of at least one new significant product.

The response to the semiconductor shortage has included a new Supply Chain Disruptions Task Force led by the Secretaries of Commerce, Transportation, and Agriculture. The Department of Commerce will also have a new data hub monitor to smooth Government response to bottlenecks and vulnerabilities. 

One of the leading proponents of onshoring has been Apple’s Tim Cook. Cook came from the logistics stream at Apple and has been acutely aware that his company was vulnerable to disruptions for several years. Supply chain vulnerability has seen Apple initiate moves to push suppliers, such as TSMC and Foxconn, to locate new facilities within the United States.

Interestingly, the same imperatives that have driven Apple also benefit a diverse range of materials producers, including miners in Canada. Canada is classified as part of the strategic supply area for the US, and thus a miner producing rare earth metals in the Northwest Territory comes under the umbrella of the current plans. 

Locally listed Australian rare earth metals specialist, Vital Metals Limited (VML.AX) is an example of a company that has planned a project to fall within the scope of US Strategic requirements. The Nechalacho North T mine is scheduled to make its first deliveries to the separation plant in November 2021. VML will then become Canada’s first — and North America’s second — rare earth producer with ore sourcing. 

Geoff Atkins, Vital Metals Managing Director, commented, “Under these US Critical Supply Chain protocols, we are a technology commodity company, focused on delivering critical rare earth metals to advanced technology manufacturers.” 

Companies from across the globe would be wise, just as VML, to address the role of Critical Supplier to the US early in the planning phase.

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