# Publication of a Report on the Effect of Imports of Vanadium on the National Security: An Investigation Conducted Under Section 232 of the Trade Expansion Act of 1962, as Amended > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2021-24957 ## Record - **Collection:** Federal Register - **Document type:** Notice - **Published:** November 18, 2021 - **Citation:** 86 FR 64748 ## Text DEPARTMENT OF COMMERCE Bureau of Industry and Security RIN 0694-XC079 Publication of a Report on the Effect of Imports of Vanadium on the National Security: An Investigation Conducted Under Section 232 of the Trade Expansion Act of 1962, as Amended AGENCY: Bureau of Industry and Security, Commerce. ACTION: Publication of a report. SUMMARY: The Bureau of Industry and Security (BIS) in this notice is publishing a report that summarizes the findings of an investigation conducted by the U.S. Department of Commerce (the “Department”) pursuant to Section 232 of the Trade Expansion Act of 1962, as amended (“Section 232”), into the effect of imports of vanadium on the national security of the United States. This report was completed on February 22, 2021 and posted on the BIS website in July 2021. BIS has not published the appendices to the report in this notification of report findings, but they are available online at the BIS website, along with the rest of the report ( see the ADDRESSES section). DATES: The report was completed on February 22, 2021. The report was posted on the BIS website in July 2021. ADDRESSES: The full report, including the appendices to the report, are available online at https://www.bis.doc.gov/index.php/documents/section-232-investigations/2793-vanadium-section-232-report-public-with-appendices/file . FOR FURTHER INFORMATION CONTACT: Kevin Coyne, Industrial Studies Division, Bureau of Industry and Security, U.S. Department of Commerce, (202) 482-5481, Vanadium232@bis.doc.gov. Unless otherwise protected by law, any information received from the public during the course of this investigation may be made publicly available. For more information about the Section 232 program, including the regulations and the text of previous investigations, please see www.bis.doc.gov/232. The Effect of Imports of Vanadium on the National Security An Investigation Conducted Under Section 232 of the Trade Expansion Act of 1962, as Amended U.S. Department of Commerce Bureau of Industry and Security Office of Technology Evaluation February 22, 2021 Table of Contents I. Executive Summary A. Findings 1. Vanadium Is Essential to U.S. National Security 2. Imports of Vanadium Have Mixed Effects on the Economic Welfare of the U.S. Vanadium Industry 3. Displacement of Domestically-Produced Vanadium by Imports Affects Our Internal Economy, But Is Mitigated by Ongoing Actions 4. Increased Global Capacity and Production of Vanadium Will Further Impact the Long-Term Viability of U.S. Vanadium Production 5. Unilaterally Increasing Domestic Prices of Vanadium Would Harm Critical U.S. Industries B. Conclusion C. Recommendations II. Legal Framework A. Section 232 Requirements B. Discussion III. Investigative Process A. Initiation of Investigation B. Public Comments C. Information Gathering and Data Collection Activities D. Interagency Consultation IV. Product Scope of Investigation V. Background on U.S. Vanadium Industry A. Vanadium Production B. Vanadium Uses VI. Global Vanadium Industry Conditions A. Overview B. Prior Trade Investigations C. U.S. Duties on Vanadium Imports VII. Findings A. Vanadium Is Essential to U.S. National Security 1. Vanadium Is Considered a Critical Mineral 2. Vanadium Is Required for National Defense Systems 3. Vanadium Is Required for Critical Infrastructure 4. Vanadium Has Significant Effects on Other Critical Industries B. Imports of Vanadium Have Mixed Effects on the Economic Welfare of the U.S. Vanadium Industry 1. The U.S. Is Presently Reliant on Imports of Vanadium 2. U.S. Reliance on Imports of Vanadium Is Not Increasing 3. Prices 4. Employment 5. Financial Outlook 6. Exploration 7. Capital Expenditures 8. Environmental Factors C. Displacement of Domestically-Produced Vanadium by Imports Affects Our Internal Economy, but Is Mitigated by Ongoing Actions 1. U.S. Production of Vanadium Is Well Below Domestic Demand 2. Domestic Production Is Highly Concentrated and Limits Capacity Available for a National Emergency 3. Domestic Vanadium Production Currently Requires Significant Imports of Vanadium Feedstock, Limiting Capacity Available for a National Emergency 4. Trade Actions Have Been Successful in Mitigating Artificially Low-Priced Imports of Vanadium 5. Critical Minerals Agreements Will Help Ensure Reliable Supplies of Vanadium D. Increased Global Capacity and Production of Vanadium Will Further Impact the Long-Term Viability of U.S. Vanadium Production 1. China Possesses an Outsized Role in the Global Price of Vanadium 2. Expansion of Low-Cost Production in Several Countries Will Place Downward Pressure on Global Vanadium Prices 3. Downward Price Pressure May Be Mitigated by Increased Demand for Steel, Titanium, and Energy Storage 4. Significant Price Swings Impair the Ability of Domestic Producers To Plan and Carry Out Capital Expenditures E. Unilaterally Increasing Domestic Prices of Vanadium Would Harm Critical U.S. Industries 1. Domestic Vanadium Prices Significantly Exceeding World Prices Would Disadvantage the U.S. Steel Industry 2. Domestic Vanadium Prices Significantly Exceeding World Prices Would Harm the U.S. Titanium Industry, to the Benefit of Russian and Chinese Titanium Producers VIII. Conclusion A. Determination B. Recommendations APPENDICES Appendix A: Section 232 Investigation Notification Letter to Secretary of Defense Mark Esper, May 21, 2020 Appendix B: Federal Register Notice—Notice of Requests for Public Comments on Section 232 National Security Investigation of Imports of Vanadium, June 3, 2020 Appendix C: Federal Register Notice—Reopening of Comment Period for Section 232 National Security Investigation of Imports of Vanadium, September 25, 2020 Appendix D: Summary of Public Comments Appendix E: Survey for Data Collection Prepared by Bureau of Industry and Security http://www.bis.doc.gov I. Executive Summary This report summarizes the findings of an investigation conducted by the U.S. Department of Commerce (the “Department”) pursuant to Section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862 (“Section 232”)), into the effect of imports of vanadium 1 on the national security of the United States. 1 See Figure 1 in Section IV, “Product Scope of the Investigation,” for the vanadium products addressed by this report. Vanadium is used primarily as a strengthening agent in steel products, particularly for products in the construction industry and in tool steel. A smaller but essential use is in titanium aerospace alloys; military and commercial aircraft are dependent on vanadium-containing titanium products. Vanadium also has significant chemical uses, including as a catalyst in the production of sulfuric acid—itself an important industrial material used in a wide range of production—and in large scale energy storage. There are three general methods of vanadium production: Primary (mining), co-production (from mined ore in concert with steelmaking), and secondary production or recycling (from residues and waste materials). Production generally results in vanadium pentoxide, which can be used in titanium and non-metallurgical uses or further converted, generally to ferrovanadium for incorporation into steel. There is currently one primary producer of vanadium in the United States (uranium miner Energy Fuels Resources). There are two active secondary producers (the companies that submitted the Section 232 application, AMG Vanadium and U.S. Vanadium), plus a third secondary producer currently modernizing an idle facility (Gladieux Metals Recycling). The primary producer only produced vanadium during one of the last five years and supplied less than 4% of U.S. demand. Globally, primary and co-production of vanadium is concentrated in four countries: China, Russia, South Africa, and Brazil, with China accounting for over half of global production. Since 1995, the United States has found that imports of ferrovanadium from all major primary producers except Brazil have been sold at less than fair value, resulting in antidumping duties. These duties remain in effect for China and South Africa but have since been revoked for Russia. Although the United States is reliant on imports of vanadium pentoxide, ferrovanadium, or vanadium-bearing waste products to meet domestic demand, this import reliance will be mitigated by a major expansion being carried out by AMG Vanadium doubling their ferrovanadium production capacity, and the soon-expected completion of Gladieux's renovation, which will reintroduce significant domestic vanadium pentoxide production. In addition, two mining projects are in the exploratory or permitting phase, potentially adding domestic production capacity as soon as 2023. The biggest challenge the industry faces is low and volatile vanadium prices. Prices are currently below the levels required for cost effective primary production in the United States, and make it difficult for secondary producers to source feedstock and operate profitably. Adding to producers' woes are the major demand declines due to COVID-19, with demand for vanadium in titanium products hit especially hard as a result of decreased consumption by the aerospace industry. Given vanadium's almost-exclusive use in concert with steel and titanium, and, as steel and titanium are both considered critical to national security—with their domestic production threatened by imports, as reported in recent Section 232 reports—the Department finds that unilaterally imposing import tariffs or quotas in order to raise the domestic price of vanadium would largely impact domestic steel and titanium industries and would therefore have significant negative effects on the economic and national security of the United States. Cost increases for only domestic steel and titanium producers would put these critical industries, already threatened by low-cost imports, at a further disadvantage relative to foreign producers. In conducting this investigation, the Secretary of Commerce (the “Secretary”) noted the Department's prior investigations under Section 232. This report incorporates the statutory analysis from the Department's 2018 reports on the imports of steel and aluminum 2 with respect to applying the terms “national defense” and “national security” in a manner that is consistent with the statute and legislative intent. 3 2 U.S. Department of Commerce. Bureau of Industry and Security. The Effect of Imports of Steel on the National Security (Washington, DC: 2018) (“Steel Report”) and U.S. Department of Commerce. Bureau of Industry and Security. The Effect of Imports of Aluminum on the National Security (Washington, DC: 2018) (“Aluminum Report”). https://www.bis.doc.gov/index.php/documents/steel/2224-the-effect-of-imports-of-steel-on-the-national-security-with-redactions-20180111/file https://www.bis.doc.gov/index.php/documents/aluminum/2223-the-effect-of-imports-of-aluminum-on-the-national-security-with-redactions-20180117/file . 3 Steel Report at 13-14; Aluminum Report at 12-13. As required by the statute, the Secretary considered all factors set forth in Section 232(d). In particular, the Secretary examined the effect of imports on national security requirements, specifically: i. Domestic production needed for projected national defense requirements; ii. the capacity of domestic industries to meet such requirements; iii. existing and anticipated availabilities of the human resources, products, raw materials, and other supplies and services essential to the national defense; iv. the requirements of growth of such industries and such supplies and services including the investment, exploration, and development necessary to assure such growth; and v. the importation of goods in terms of their quantities, availabilities, character, and use as those affect such industries; and the capacity of the United States to meet national security requirements. In preparing this report, the Secretary also recognized the close relation of the economic welfare of the United States to its national security. Factors that can compromise the nation's economic welfare include, but are not limited to, the impact of “foreign competition on the economic welfare of individual domestic industries; and any substantial unemployment, decrease in revenues of government, loss of skills, or any other serious effects resulting from the displacement of any domestic products by excessive imports.” See 19 U.S.C. 1862(d). In particular, this report assesses whether vanadium is being imported “in such quantities” and “under such circumstances” as to “threaten to impair the national security.” 4 4 19 U.S.C. 1862(b)(3)(A). A. Findings In conducting the investigation, the Secretary found: 1. Vanadium Is Essential to U.S. National Security (a) Vanadium is a critical mineral. The Department of Interior included vanadium on the 2018 List of Critical Minerals required by Executive Order 13817, issued December 20, 2017. 5 Pursuant to the Executive Order, the list established vanadium as essential to the national security of the United States and found that the absence of a vanadium supply would have significant consequences for the U.S. economy and national security. 5 https://www.usgs.gov/news/interior-releases-2018-s-final-list-35-minerals-deemed-critical-us-national-security-and. (b) Vanadium is required for national defense systems because of its use in steel and titanium alloys. Vanadium is irreplaceable in key titanium aerospace applications, and many military airframes contain significant amounts of vanadium. (c) Vanadium is required for critical infrastructure. A key feature in the high-strength, low-alloy (HSLA) steel products used in the construction industry, as well as in tool steel and high-speed steels, vanadium steel alloys are used throughout U.S. critical infrastructure. In addition, nearly all vanadium-bearing titanium products are used in the critical transportation or defense sectors. (d) The vanadium industry has significant effects on other industries critical to U.S. national security. As stated above, vanadium has essential uses in steel and titanium products, and vanadium resources in the United States are often co-located with uranium resources. The Department has recently found that imports in all three of these industries threaten to impair U.S. national security. 2. Imports of Vanadium Have Mixed Effects on the Economic Welfare of the U.S. Vanadium Industry (a) The United States is presently reliant on imports of vanadium. The only primary vanadium producer in the United States has only produced during one of the last five years, due to low vanadium prices. Domestic secondary producers of vanadium import significant quantities of their feedstock, [TEXT REDACTED]. (b) U.S. reliance on imports of vanadium is not increasing. Although the country is reliant on imports of vanadium to meet civilian demand, major U.S. producers of ferrovanadium and vanadium pentoxide are in the process of expanding or restarting operations. Given the successful completion of these initiatives, U.S. capacity for ferrovanadium production from vanadium-bearing waste is projected to more than double in 2021, and U.S. capacity for vanadium pentoxide production from vanadium-bearing waste is projected to increase significantly with the re-opening of a secondary production facility. In addition, several domestic mining companies have idle production capacity or are exploring the development of vanadium mines. If domestic vanadium prices rise, or in the event of a national emergency, these companies may increase production and capacity, including through new mines. (c) Given continuing low domestic prices, the U.S. vanadium industry may face significant financial challenges. [TEXT REDACTED] However, it is difficult to accurately characterize the financial health of the industry due to recent facility turnover, significant ongoing investments, and recent lack of operational activities. (d) Significant resources exist in the United States for primary production. At least three companies have mines that have produced vanadium in the past, and two additional projects are under development. (e) Secondary production of vanadium is environmentally beneficial. The vanadium-bearing waste products used in secondary production are classified by the Environmental Protection Agency (EPA) as hazardous waste. However, secondary production reclaims critical minerals and can divert significant amounts of material from landfills, instead using them in products critical to national defense. 3. Displacement of Domestically-Produced Vanadium by Imports Affects Our Internal Economy, But Is Mitigated by Ongoing Actions (a) U.S. production of vanadium is well below domestic demand. Primary and secondary producers produced an annual average of 3.4 million kilograms of vanadium content from 2016 to 2019, while domestic imports of key vanadium products approached 8 million kilograms. (b) Domestic production is highly concentrated and limits the capacity available for a national emergency. Just three domestic companies carried out vanadium production in 2019. Additional capacity in the future is not guaranteed, based on low vanadium prices. (c) Domestic vanadium production currently requires significant imports of vanadium feedstock, limiting vanadium production capacity available for a national emergency. Only one vanadium producer in recent years has used entirely U.S. origin material, producing the equivalent of 1.4% of total domestic demand since 2016. Secondary producers all use significant levels of foreign feedstock; the United States is unable to satisfy all domestic demand with U.S. sourced material. (d) Recent trade actions have successfully mitigated artificially low-priced imports of ferrovanadium. Of the four countries with significant primary production of vanadium, three have been subject to the imposition of antidumping duties on ferrovanadium based on petitions from domestic ferrovanadium producers. In all cases, imports of ferrovanadium from the subject countries fell to close to zero following the imposition of the duties. (e) Critical minerals agreements with other countries will help ensure reliable supplies of vanadium. The United States government (USG) released in June 2019 A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals, which includes a goal of enhanced international trade and cooperation related to critical minerals. 6 The United States has subsequently entered into official critical minerals collaborations with Canada and Australia, both of which have significant vanadium resources. 6 https://www.commerce.gov/data-and-reports/reports/2019/06/federal-strategy-ensure-secure-and-reliable-supplies-critical-minerals . 4. Increased Global Capacity and Production of Vanadium Will Further Impact the Long-Term Viability of U.S. Vanadium Production (a) China, which accounts for an estimated 50 to 60% of global vanadium production and consumption, possesses an outsized role in determining the global price of vanadium. This concentration of supply and demand means that policy changes in China have significant effects on the global vanadium market, including major price changes in the near past. (b) Expansion of low-cost production in countries other than China will place downward pressure on global vanadium prices. Mines in development or exploration in Kazakhstan, Canada, and Australia have the ability to nearly double current global mine production, should they all enter production. (c) Downward price pressure may be mitigated by increased demand for steel, titanium, and energy storage. Although currently significantly affected by COVID-19, higher demand in the steel and titanium industries would put upward pressure on vanadium prices. Additionally, annual growth projections for the use of vanadium-based batteries range from 13 to 42% through 2027, which could produce significant additional demand. (d) Significant price swings impair the ability of domestic producers to plan and carry out capital expenditures. With vanadium projects taking years to complete and major price swings a common occurrence, companies may be challenged to find financing throughout the course of the development of new vanadium capabilities, or may find their projects not viable once completed. 5. Unilaterally Increasing Domestic Prices of Vanadium Would Harm Critical U.S. Industries (a) Domestic vanadium prices significantly exceeding world prices would disadvantage the U.S. steel industry. The Department's 2018 Section 232 investigation on steel imports found that the steel industry was threatened by imports and in need of assistance to remain viable. As the predominant user of vanadium, the domestic steel industry would face new threats from foreign steel producers if its input costs were significantly higher than those in other countries. (b) Domestic vanadium prices significantly exceeding world prices would also harm the U.S. titanium industry, to the benefit of Russian and Chinese producers. The titanium industry is dependent on vanadium because vanadium accounts for between 12 and 14% of the cost of a standard titanium alloy. The U.S. titanium industry is facing significant financial challenges from declines in demand (related to COVID-19), and may not be able to bear additional costs that international competitors do not. B. Conclusion Based on these findings, the Secretary concludes that the present quantities and circumstances of vanadium imports do not threaten to impair the national security as defined in Section 232. Although vanadium is critical to national security and the United States is currently dependent on imported sources of vanadium, [TEXT REDACTED] several significant factors, including the health of the U.S. industry, availability of idle domestic resources, existing USG actions, and the importance of vanadium to competitive steel and titanium industries, indicate that imports of vanadium do not currently threaten to impair national security. The United States is currently reliant on imports to satisfy demand for vanadium products and is not producing significant amounts of vanadium from U.S.-origin material, but these circumstances are not expected to deteriorate. Two domestic secondary producers are in the process of expanding and/or upgrading their facilities, which will add significantly to the U.S. ability to produce ferrovanadium and vanadium pentoxide from vanadium-bearing waste materials. Furthermore, in addition to the one existing domestic primary producer, several other companies are in the process of exploring vanadium mining ventures and will be in a position to produce within several years if vanadium prices rise sufficiently. Even if primary production is not feasible at current vanadium prices, the availability of these resources allows for production potential in the event of national emergency. An increase in the production of domestic primary vanadium, expansion of secondary production, and the addition of domestic feedstock for secondary production should mitigate the current levels of reliance on imports. However, the projected rise in capacity does not necessarily mean that the domestic vanadium industry is healthy. Vanadium prices have a long history of volatility, with prices going through cycles of surging and plunging. The main users of vanadium—the steel and titanium industries—experienced major declines in demand in 2020 related to COVID-19, with the titanium industry particularly challenged by a large decrease in aerospace demand. If vanadium prices fail to rise, some of the capacity under exploration may not turn into production, and one or more secondary producers may face financial difficulty or challenges in sourcing vanadium-bearing feedstock. Further, the lack of a finding of a threat to national security does not indicate that a healthy domestic vanadium industry is not of vital importance to the United States. While the Secretary does not believe that imports of vanadium need to be adjusted at this time, there are several steps that can and should be taken to support the domestic vanadium industry and related sectors to ensure safe and reliable sources of vanadium in the event of a national emergency, thereby enhancing and protecting U.S. national security. C. Recommendations The Department has identified several actions that would help to ensure reliable domestic sources of vanadium and lessen the potential for imports to threaten national security. These actions are not intended to be exhaustive or exclusive; the Secretary recommends pursuing all proposed actions. Recommendation 1—Expansion of the National Defense Stockpile To Include High Purity Vanadium Pentoxide The USG should support domestic vanadium production and ensure a source of vanadium in the event of national emergency by re-adding vanadium pentoxide to the National Defense Stockpile. Vanadium pentoxide was part of the stockpile until 1997; the stockpile held 6,200 tons of contained vanadium 7 in 1965 and had a goal of 7,000 tons though it held just 651 tons prior to the decision to reduce the target level to zero in 1993, following the end of the cold war. 8 Using high purity vanadium pentoxide—suitable for use in titanium alloys or chemical uses as well as conversion into ferrovanadium for use in the steel industry—would ensure vanadium held in the stockpile could be used for any necessary product in the event of national security. 7 Vanadium is generally reported in terms of “contained vanadium”, or the weight of only the vanadium portion of a vanadium compound. Vanadium represents 56% of the weight of vanadium pentoxide. 8 USGS Vanadium Mineral Commodity Summaries. https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information . National Defense Stockpile goals were initially set to ensure sufficient product to support one year's demand for the entire country but were later narrowed to focus on defense-specific needs, primarily due to funding constraints. Given the importance of vanadium and other critical minerals to the economy, the economic and national security of the United States would be better served by pursuing stockpile goals that support national security beyond defense-specific requirements. The re-addition of vanadium to the stockpile would require authorization and funding from Congress. The Department recommends that the size of the proposed vanadium addition to the stockpile should be based on three benchmarks: Defense system requirements, broader national security requirements, and total domestic demand. As discussed above, defense system requirements may conservatively amount to 273 metric tons of vanadium content per year; this inventory level would be worth approximately $10.5 million based on average vanadium pentoxide prices since 2016. 9 Critical infrastructure requirements add an estimated 4,527 tons per year, resulting in a minimum stockpile goal based on total national security requirements of 4,800 tons of contained vanadium, at a cost of $184.8 million. Finally, total domestic apparent consumption (including defense and critical infrastructure needs) averaged 8,590 tons of contained vanadium annually from 2016 to 2019. Establishing a stockpile goal at this level, sufficient to meet all domestic demand, would be valued at $330.6 million. 9 Average price per pound vanadium pentoxide from 2016-2019 of $9.80, based on data from USGS: https://pubs.usgs.gov/periodicals/mcs2020/mcs2020-vanadium.pdf . Beyond the minimum stockpile level, the Secretary further recommends that the stockpile of vanadium pentoxide be authorized to expand in size during periods of unusually low prices (with purchases made from domestic producers), while remaining unchanged or shrinking during periods of higher-than-average prices. This policy would help mitigate the large historic price swings that have caused significant financial distress and impeded capital investment in the domestic vanadium industry while helping to regulate domestic prices. Implementing this policy would require legislative changes to the Strategic and Critical Materials Stockpiling Act (50 U.S.C. 98, et seq. ) (Stockpiling Act). While the mitigation of critical mineral price swings and the purchase of critical minerals from domestic producers at a premium when prices are unusually low serves the interest of national defense, the Stockpiling Act requires that the stockpile “not be used for economic or budgetary purposes,” which may present a challenge in allowing the stockpile to exceed minimum defense needs based on prices. Allowing the stockpile to be used for economic purposes if such actions support the health and competitiveness of affected industries would help enhance U.S. national security. As an additional potential benefit, once the vanadium holdings in the National Defense Stockpile are established, they could—with the authorization of Congress and in cooperation with the Department of Energy—be used without cost to support another sector: Large scale energy storage. As noted above, a potential new use for vanadium is in vanadium redox flow batteries, which have the advantage of using vanadium in both parts of the electrolyte, eliminating the risk of cross-contamination and allowing for the vanadium to be re-claimed from the batteries at a low cost with minimal yield loss. 10 10 Vanitec estimates cost of conversion from leachate to vanadium pentoxide at $1 per pound vanadium pentoxide with a 95% yield. http://www.vanitec.org/vanadium/ESC-Meetings . With vanadium accounting for approximately 30% of the cost of a vanadium redox flow battery and initial battery cost reductions needed to enable larger scale use, the USG could reduce the costs of the stockpile and support the energy storage sector by leasing a portion of the stockpile to be managed by vanadium redox flow battery companies, on condition of the leased vanadium being immediately reclaimable in the event of a national emergency. Given restrictions on transfers to and from the stockpile, this use of material in the stockpile would require either a legislative change to the Stockpiling Act or the designation of the leased material as still being part of the stockpile despite being used for energy storage. Recommendation 2—Recycling Promotion The Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals (Federal Strategy) identifies an available, on-demand supply of critical minerals as “essential to the economic prosperity and national defense of the United States.” 11 The Federal Strategy recommends the support of recycling and reprocessing of critical minerals, including vanadium. Given that nearly all vanadium production in the United States is performed through recycling, the USG should support the vanadium industry through USG-wide actions to promote the recycling of materials containing critical minerals. 11 https://www.commerce.gov/sites/default/files/2020-01/Critical_Minerals_Strategy_Final.pdf . A 2002 EPA analysis, carried out in support of the May 8, 2002 final rule on the identification and listing of spent catalysts as hazardous waste, showed that in 1999, just 55% of spent catalyst was recycled, in large part because the cost of recycling was estimated to be three times that of landfill disposal. 12 Bringing the recycling of vanadium-bearing wastes generated in the United States to or near 100% has the potential to greatly expand the availability of vanadium products of domestic origin. Such recycling will occur naturally with higher vanadium prices, as refiners typically receive a metals credit from vanadium producers based on vanadium sale price, but can also be encouraged through the consideration of recycling tax deductions or credits as well as EPA review of their regulatory authority governing disposal of hazardous waste. 12 67 FR 30811 and https://archive.epa.gov/epawaste/hazard/web/pdf/backdoc.pdf . For example, additional information submitted by industry to the Department reported that the 2020 International Maritime Organization's (IMO) regulation requiring the reduction of allowable levels of sulfur in maritime fuels from 3.5% to 0.5% has increased refinery catalyst use, which is expected to result in increased availability of spent catalyst used to produce vanadium. 13 Similar regulations in the United States would support both the EPA mission to protect human health and the environment and domestic production of critical minerals. 13 https://ig9we1q348z124x3t10meupc-wpengine.netdna-ssl.com/wp-content/uploads/AMG-Annual-Report-Web-FINAL.pdf . Recommendation 3—Continue USG Actions To Support Critical Minerals Many of the challenges domestic vanadium producers face are not unique to vanadium; with this investigation the Department has completed Section 232 investigations on four of the 35 critical minerals. While the specific challenges of each critical mineral are distinct, many industrial trends are similar and broad solutions may be more effective than individual targeting. There are several ongoing and proposed U.S. government actions that support the domestic supply of critical minerals. Continuing to pursue these actions will provide necessary support to the domestic vanadium industry as well as to the broader critical minerals sector. Among the key actions that will enable strong domestic critical minerals industries are Executive Order 13817 and the resulting Federal Strategy, Executive Order 13953 ( Addressing the Threat to the Domestic Supply Chain From Reliance on Critical Minerals From Foreign Adversaries and Supporting the Domestic Mining and Processing Industries ), proposals from the USG Nuclear Fuel Working Group, work being carried out by the Titanium Sponge Working Group, and legislative action to support domestic production of critical minerals. Since the list of suitable substitutions for vanadium in steel and certain chemical processes includes other minerals on the critical minerals list (including manganese, niobium, titanium, tungsten, and platinum), actions to support production of critical minerals as a whole would also help to address domestic vanadium supply challenges. The Federal Strategy, developed pursuant to Executive Order 13817, was announced in June 2019, with six calls to action containing 24 goals and 61 recommended actions that federal agencies should pursue to improve the availability of critical minerals and their downstream supply chains in the United States to help reduce the country's vulnerability to supply chain disruptions. Many of the identified goals of the Federal Strategy are consistent with the findings and recommendations of this investigation, including: (a) Support for downstream materials production capacity; (b) enhancing the National Defense Stockpile's ability to meet military as well as civilian requirements; (c) securing access to critical minerals through trade and investment with allies; (d) identifying methods to encourage secondary use of critical minerals; and (e) streamlining permit processes for critical mineral projects. The President issued Executive Order 13953, “Addressing the Threat to the Domestic Supply Chain From Reliance on Critical Minerals From Foreign Adversaries and Supporting the Domestic Mining and Processing Industries,” (E.O. 13953), in September 2020. The Order identifies the need to ensure a consistent supply of critical minerals and declares a national emergency to reduce the threat posed by the country's undue reliance on critical minerals from foreign adversaries. Many of the actions taken pursuant to E.O. 13953 will support the domestic vanadium industry, particularly vanadium mining. In addition to Executive actions, there have recently been several legislative proposals that would provide support for vanadium and other critical minerals. Examples include H.R. 8143 (also known as the Reclaiming American Rare Earths (RARE) Act) and S. 3694 (the Onshoring Rare Earths (ORE) Act of 2020). Both bills as written restrict the definition of critical minerals to a subset of those identified by the Department of Interior in response to E.O. 13817, and need to be expanded to include vanadium and other critical minerals, but otherwise have features of significant value to the domestic vanadium industry. In addition to allowing a tax deduction for investments in property used for mining, reclaiming, or recycling critical materials, these bills would support the function of critical minerals in the broader economy by providing grants or allowing tax deductions for critical minerals extracted in the United States. In addition to expanding the bills to include vanadium (as noted above), in order to provide the most value to the country, the Department recommends that any legislation should ensure that extraction incentives include recycling and reclamation. Finally, the Department's Section 232 investigations into imports of Uranium and Titanium sponge resulted in the creation of USG working groups tasked with developing recommendations additional to those made in each report. Given the significant intersections between the vanadium industry and the uranium and titanium industries, the implementation of the working groups' recommendations will support the vanadium industry as well. II. Legal Framework A. Section 232 Requirements Section 232 of the Trade Expansion Act of 1962, as amended, provides the Secretary with the authority to conduct investigations to determine the effect on the national security of the United States of imports of any article. It authorizes the Secretary to conduct an investigation if requested by the head of any department or agency, upon application of an interested party, or upon his own motion. See 19 U.S.C. 1862(b)(1)(A). Section 232 directs the Secretary to submit to the President a report with recommendations for “action or inaction under this section” and requires the Secretary to advise the President if any article “is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.” See 19 U.S.C. 1862(b)(3)(A). Section 232(d) directs the Secretary and the President to, in light of the requirements of national security and without excluding other relevant factors, give consideration to the domestic production needed for projected national defense requirements and the capacity of the United States to meet national security requirements. See 19 U.S.C. 1862(d). Section 232(d) also directs the Secretary and the President to “recognize the close relation of the economic welfare of the Nation to our national security, and . . . take into consideration the impact of foreign competition on the economic welfare of individual domestic industries” by examining whether any substantial unemployment, decrease in revenues of government, loss of skills or investment, or other serious effects resulting from the displacement of any domestic products by excessive imports, or other factors, results in a “weakening of our internal economy” that may impair the national security. 14 See 19 U.S.C. 1862(d). 14 An investigation under Section 232 looks at excessive imports for their threat to the national security, rather than looking at unfair trade practices as in an antidumping investigation. Once an investigation has been initiated, Section 232 mandates that the Secretary provide notice to the Secretary of Defense that such an investigation has been initiated. Section 232 also requires the Secretary to do the following: (1) “Consult with the Secretary of Defense regarding the methodological and policy questions raised in [the] investigation;” (2) “Seek information and advice from, and consult with, appropriate officers of the United States;” and (3) “If it is appropriate and after reasonable notice, hold public hearings or otherwise afford interested parties an opportunity to present information and advice relevant to such investigation.” 15 See 19 U.S.C. 1862(b)(2)(A)(i)-(iii). 15 Department regulations (i) set forth additional authority and specific procedures for such input from interested parties, see 15 CFR 705.7 and 705.8, and (ii) provide that the Secretary may vary or dispense with those procedures “in emergency situations, or when in the judgment of the Department, national security interests require it.” Id., 705.9. As detailed in the report, all of the requirements set forth above have been satisfied. In conducting the investigation, Section 232 permits the Secretary to request that the Secretary of Defense provide an assessment of the defense requirements of the article that is the subject of the investigation. See 19 U.S.C. 1862(b)(2)(B). Upon completion of a Section 232 investigation, the Secretary is required to submit a report to the President no later than 270 days after the date on which the investigation was initiated. See 19 U.S.C. 1862(b)(3)(A). The report must: (1) Set forth “the findings of such investigation with respect to the effect of the importation of such article in such quantities or under such circumstances upon the national security;” (2) Set forth, “based on such findings, the recommendations of the Secretary for action or inaction under this section;” and (3) “If the Secretary finds that such article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security . . . so advise the President.” S ee 19 U.S.C. 1862(b)(3)(A). All unclassified and non-proprietary portions of the report submitted by the Secretary to the President must be published. Within 90 days after receiving a report in which the Secretary finds that an article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security, the President shall: (1) “Determine whether the President concurs with the finding of the Secretary”; and (2) “If the President concurs, determine the nature and duration of the action that, in the judgment of the President, must be taken to adjust the imports of the article and its derivatives so that such imports will not threaten to impair the national security” ( see 19 U.S.C. 1862(c)(1)(A)). B. Discussion While Section 232 does not specifically define “national security,” both Section 232, and the implementing regulations at 15 CFR part 705, contain non-exclusive lists of factors that the Secretary must consider in evaluating the effect of imports on the national security. Congress in Section 232 explicitly determined that “national security” includes, but is not limited to, “national defense” requirements. See 19 U.S.C. 1862(d)). In a 2001 report, the Department determined that “national defense” includes both the defense of the United States directly, and the “ability to project military capabilities globally.” 16 The Department also concluded in 2001 that, “in addition to the satisfaction of national defense requirements, the term “national security” can be interpreted more broadly to include the general security and welfare of certain industries, beyond those necessary to satisfy national defense requirements, which are critical to the minimum operations of the economy and government.” The Department called these “critical industries.” 17 While this report uses these reasonable interpretations of “national defense” and “national security,” it uses the more recent 16 critical infrastructure sectors identified in Presidential Policy Directive 21 18 instead of the 28 industry sectors identified in the 2001 Report. 19 16 Department of Commerce, Bureau of Export Administration; The Effects of Imports of Iron Ore and Semi-Finished Steel on the National Security; Oct. 2001 (“2001 Iron and Steel Report”) at 5. 17 Id. 18 Presidential Policy Directive 21; Critical Infrastructure Security and Resilience; February 12, 2013 (“PPD-21”). 19 See Op. Cit. at 16. Section 232 directs the Secretary to determine whether imports of any article are being made “in such quantities” or “under such circumstances” that those imports “threaten to impair the national security.” See 19 U.S.C. 1862(b)(3)(A). The statutory construction makes clear that either the quantities or the circumstances, standing alone, may be sufficient to support an affirmative finding. The two may also be considered together, particularly when the circumstances act to prolong or magnify the impact of the quantities being imported. The statute does not define a threshold for when “such quantities” of imports are sufficient to threaten to impair the national security, nor does it define the “circumstances” that might qualify. Similarly, the statute does not require a finding that the quantities or circumstances are impairing the national security. Instead, the threshold question under Section 232 is whether the quantities or circumstances “threaten to impair the national security.” See 19 U.S.C. 1862(b)(3)(A). This makes evident that Congress expected an affirmative finding under Section 232 before an actual impairment of the national security. 20 20 The 2001 Iron and Steel Report used the phrase “fundamentally threaten to impair” when discussing how imports may threaten to impair national security. See 2001 Iron and Steel Report at 7 and 37. Because the term “fundamentally” is not included in the statutory text and could be perceived as establishing a higher threshold, the Secretary expressly does not use the qualifier in this report. The statutory threshold in Section 232(b)(3)(A) is unambiguously “threaten to impair” and the Secretary adopts that threshold without qualification. 19 U.S.C. 1862(b)(3)(A). Section 232(d) contains a list of factors for the Secretary to consider in determining if imports “threaten to impair the national security” 21 of the United States, and this list is mirrored in the implementing regulations. See 19 U.S.C. 1862(d) and 15 CFR 705.4. Congress was careful to note twice in Section 232(d) that the list provided, while mandatory, is not exclusive. 22 Congress' illustrative list is focused on the ability of the United States to maintain the domestic capacity to provide the articles in question as needed to maintain the national security of the United States. 23 Congress broke the list of factors into two equal parts using two separate sentences. The first sentence focuses directly on “national defense” requirements, thus making clear that “national defense” is a subset of the broader term “national security.” The second sentence focuses on the broader economy and expressly directs that the Secretary and the President “shall recognize the close relation of the economic welfare of the Nation to our national security.” 24 See 19 U.S.C. 1862(d). 21 19 U.S.C. 1862(b)(3)(A). 22 See 19 U.S.C. 1862(d) (“the Secretary and the President shall, in light of the requirements of national security and without excluding other relevant factors . . .” and “serious effects resulting from the displacement of any domestic products by excessive imports shall be considered, without excluding other factors . . .”). 23 This reading is supported by Congressional findings in other statutes. See, e.g., 15 U.S.C. 271(a)(1)(“The future well-being of the United States economy depends on a strong manufacturing base . . .”) and 50 U.S.C. 4502(a)(“Congress finds that—(1) the security of the United States is dependent on the ability of the domestic industrial base to supply materials and services . . . (2)(C) to provide for the protection and restoration of domestic critical infrastructure operations under emergency conditions . . . (3) . . . the national defense preparedness effort of the United States government requires—(C) the development of domestic productive capacity to meet—(ii) unique technological requirements . . . (7) much of the industrial capacity that is relied upon by the United States Government for military production and other national defense purposes is deeply and directly influenced by—(A) the overall competitiveness of the industrial economy of the United States; and (B) the ability of industries in the United States, in general, to produce internationally competitive products and operate profitably while maintaining adequate research and development to preserve competitiveness with respect to military and civilian production; and (8) the inability of industries in the United States, especially smaller subcontractors and suppliers, to provide vital parts and components and other materials would impair the ability to sustain the Armed Forces of the United States in combat for longer than a short period.”). 24 Accord 50 U.S.C. 4502(a). In addition to “national defense” requirements, two of the factors listed in the second sentence of Section 232(d) are particularly relevant in this investigation. Both are directed at how “such quantities” of imports threaten to impair national security See 19 U.S.C. 1862(b)(3)(A). In administering Section 232, the Secretary and the President are required to “take into consideration the impact of foreign competition on the economic welfare of individual domestic industries” and any “serious effects resulting from the displacement of any domestic products by excessive imports” in “determining whether such weakening of our internal economy may impair the national security.” See 19 U.S.C. 1862(d). After careful examination of the facts in this investigation, the Secretary has determined that the present quantities and circumstance of vanadium imports do not threaten to impair the national security, as defined in Section 232. Although vanadium is critical to national security and the United States is currently dependent on imported sources of vanadium, several significant factors, including the health of the U.S. industry, availability of idle domestic resources, existing USG actions, and the importance of vanadium to competitive domestic steel and titanium industries, indicate that imports of vanadium do not threaten to impair national security. III. Investigative Process A. Initiation of Investigation On November 19, 2019, AMG Vanadium LLC and U.S. Vanadium LLC (hereafter “Applicants”) petitioned the Secretary to conduct an investigation under Section 232 of the Trade Expansion Act of 1962, as amended, to determine the effect of imports of vanadium on the national security. Upon receipt of the petition, the Department carefully reviewed the material facts outlined in the petition and held initial discussions internally as well as with the Department of Defense. Legal counsel at the Department also carefully reviewed the petition to ensure it met the requirements of the Section 232 statute and the implementing regulations. Subsequently, on May 28, 2020, the Department accepted the petition and initiated the investigation. Pursuant to Section 232(b)(1)(b), the Department notified the U.S. Department of Defense of its intent to conduct an investigation in a May 21, 2020 letter from Secretary Ross to then Secretary of Defense, Mark Esper ( see Appendix A). B. Public Comments On June 3, 2020, the Department published a Federal Register Notice ( see Appendix B— Federal Register , Vol. 85, No. 107, 34179) announcing the initiation of an investigation to determine the effect of imports of vanadium on the national security. The notice also announced the opening of the public comment period. In the notice, the Department invited interested parties to submit written comments, opinions, data, information, or advice relevant to the criteria listed in Section 705.4 of the National Security Industrial Base Regulations (15 CFR 705.4) as they affect the requirements of national security, including the following: (a) Quantity of the articles subject to the investigation and other circumstances related to the importation of such articles; (b) Domestic production capacity needed for these articles to meet projected national defense requirements; (c) The capacity of domestic industries to meet projected national defense requirements; (d) Existing and anticipated availability of human resources, products, raw materials, production equipment, facilities, and other supplies and services essential to the national defense; (e) Growth requirements of domestic industries needed to meet national defense requirements and the supplies and services including the investment, exploration and development necessary to assure such growth; (f) The impact of foreign competition on the economic welfare of any domestic industry essential to our national security; (g) The displacement of any domestic products causing substantial unemployment, decrease in the revenues of government, loss of investment or specialized skills and productive capacity, or other serious effects; (h) Relevant factors that are causing or will cause a weakening of our national economy; and (i) Any other relevant factors The initial public comment period ended on July 20, 2020, and was followed by a public comment rebuttal period, which ended on August 17, 2020. Following requests from the general public, the Department published a copy of the Applicants' petition on September 25, 2020 and opened an additional public comment period, which ended October 9, 2020. The Department received 32 responsive submissions during the initial public comment period, which were posted on Regulations.gov for public review and rebuttal filing. The Department received 47 rebuttal filings from 11 commenters, which were posted on Regulations.gov for public review. During the additional comment period, the Department received and posted seven comments on Regulations.gov . Parties who submitted comments included representatives of the domestic vanadium production industry, representatives of the domestic uranium industry, representatives of the foreign vanadium production industry, consumers of vanadium products from the steel, titanium, and energy storage industries, as well as representatives of foreign governments, and other concerned organizations. The Department carefully reviewed all of the public comments and factored them into the investigative process. The public comments of key stakeholders are summarized in Appendix C, which also includes a link to the docket number (BIS-2020-0002) under which all public comments can be viewed in full on Regulations.gov . C. Information Gathering and Data Collection Activities Due to the limited number of firms engaged in the U.S. vanadium industry, it was determined that a public hearing was not necessary to conduct a comprehensive investigation. In lieu of holding a public hearing on this investigation, the Department issued a separate mandatory survey ( see Appendix E) to participants in the vanadium production and distribution industry, collecting both qualitative and quantitative information. The survey was sent to 34 companies with the ability to develop, produce, or distribute vanadium products for use in the United States. Eight of these companies did not have locations in the United States, and were invited to participate in the survey on a voluntary basis. The surveys provided a method for respondents to disclose confidential and non-public information. These surveys, to which response was mandatory for domestic respondents, were conducted using statutory authority pursuant to Section 705 of the Defense Production Act of 1950, as amended (50 U.S.C. 4555) (DPA), and collected detailed information concerning factors such as imports/exports, production, capacity utilization, employment, operating status, global competition, and financial information. The resulting data provided the Department with detailed industry information that was otherwise not publicly available and was needed to effectively conduct analysis for this investigation. The Department deems the information furnished in the survey responses confidential and will not publish or disclose it except in accordance with Section 705 of the DPA, which prohibits the publication or disclosure of this information unless the President determines that the withholding of such information is contrary to the interest of the national defense. Therefore, the information submitted to the Department in response to the survey will not be shared with any non-government entity other than in aggregate form. D. Interagency Consultation The Department consulted with the Department of Defense's Office of Industrial Policy and the Defense Logistics Agency, regarding methodological and policy questions that arose during the investigation. The Department also consulted with other U.S. Government agencies with expertise and information regarding the vanadium industry including the Department of Energy, the Department of State, the Office of the United States Trade Representative, the Department of Homeland Security, the Environmental Protection Agency, and the Department of Interior's U.S. Geological Survey. IV. Product Scope of Investigation The scope of this investigation defined vanadium products at the Harmonized Tariff Schedule of the United States (HTS) 10-digit level. The nine product categories and related HTS codes covered by this report are shown below in Figure 1. Figure 1—Vanadium Product Scope of the Investigation Heading/subheading/product 10 Digit HTS code Vanadium Oxides 2825.30.0010 2825.30.0050 Ferrovanadium 7202.92.0000 Vanadium Carbides 2849.90.5000 Vanadates 2841.90.1000 Vanadium Ore and Concentrates 2615.90.6090 Ash and Residues Containing Vanadium 2620.40.0030 2620.99.1000 Vanadium Sulfate 2833.29.3000 Vanadium Hydrides, Nitrides, Azides, Silicides, and Borides 2850.00.2000 Vanadium, Unwrought and Wrought 8112.92.7000 8112.99.2000 Source: United States International Trade Commission and U.S. Department of Commerce, Bureau of Industry and Security. In order to ensure that the full vanadium production process was covered, these HTS codes include vanadium products as well as vanadium-containing precursors. Vanadium is most commonly traded as vanadium oxides (typically vanadium pentoxide (V 2 O 5 )) and ferrovanadium (FeV), with usage in steelmaking accounting for the vast majority of consumption. Detailed information was collected in the Department's survey responses from U.S. vanadium producers regarding vanadium-containing products. Data throughout this report is presented, to the extent possible, in kilograms or metric tons of contained vanadium. For example, vanadium pentoxide is 56% vanadium by weight, while vanadium content in ferrovanadium varies from 35% to 80% (though is typically consistent for a given producer). Prices of vanadium pentoxide, in keeping with industry conventions, are quoted in U.S. Dollars per pound of vanadium pentoxide (not vanadium content). This report also considers the state of industries that depend on vanadium, in particular the U.S. titanium and steel industries, both of which manufacture materials that the U.S. government has recognized as critical to national security. As the Department is aware that the principal customers of vanadium are steel producers, understanding potential ramifications on the U.S. steel industry was necessary to ensure a complete analysis of the effect of vanadium imports on the national security. Vanadium is also a key element in the production of titanium alloy products that are critical to national security, with titanium sponge the subject of a recent Section 232 investigation and the focus of an ongoing working group. The Secretary's recommendations consider the interdependence of the U.S. vanadium industry and these crucial U.S. industries. V. Background on U.S. Vanadium Industry A. Vanadium Production Vanadium is produced through three general methods: primary production (mining), co-production (from mined ore in concert with steelmaking), and secondary production (from residues and waste materials). Nearly all vanadium in the United States is generated through secondary production, with some vanadium mining occurring together with uranium mining in sandstone-hosted deposits. Currently there is one primary producer of vanadium in the United States: Energy Fuels Resources (USA), Inc. (Energy Fuels). Although Energy Fuels' vanadium production activities are dependent on vanadium market prices, the company also may produce vanadium as a by-product of uranium mining, depending on uranium market prices. The United States had no primary production of vanadium from 2014 to 2018; Energy Fuels restarted production in 2019 following a surge in vanadium prices. 25 The company produced approximately 1.8 million pounds of vanadium pentoxide in 2019—equivalent to approximately 460,000 kilograms of contained vanadium—prior to ceasing production “due to weak vanadium market conditions.” 26 Energy Fuels' production accounted for under 1% of estimated worldwide primary- and co-production in 2019, with the remainder produced in four countries: China, Russia, South Africa, and Brazil (see Figure 2). 25 United States Geological Survey Mineral Commodity Summaries—Vanadium, https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information . 26 Energy Fuels, Inc. 2019 SEC Form 10-K, https://www.energyfuels.com/financials. Figure 2—Estimated Worldwide Mine Production of Vanadium [metric tons] Country 2015 2016 2017 2018 2019 China 42,000 45,000 40,000 40,000 40,000 Russia 16,000 16,000 18,000 18,000 18,000 South Africa 12,000 10,000 7,960 7,700 8,000 Brazil 6,000 8,000 5,210 5,500 7,000 United States 0 0 0 0 460 Total 76,000 79,000 71,200 71,200 73,000 Source: United States Geological Survey Mineral Commodity Summaries—Vanadium, https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information , and Energy Fuels 2019 SEC 10-K filing. Energy Fuels sold approximately 50,000 of the 460,000 kilograms of contained vanadium it produced in 2019, with the remainder kept in inventory. 27 The company reports that its U.S. mines contain 6.6 million kilograms of measured vanadium content, with another 3.6 million kilograms indicated or inferred. 28 Energy Fuels also operates the only U.S. facility that can process both vanadium ore and conventional uranium, the White Mesa Mill. 27 Energy Fuels, Inc. 2019 Annual Presentation, https://www.energyfuels.com/presentation. 28 Ibid. Two Canada-based companies are in the process of exploring the development of mines located in the United States. In May 2020, First Vanadium Corporation announced the results of its Preliminary Economic Assessment (PEA) for an open pit mine near Carlin, Nevada, and forecast 16 years of vanadium production capabilities totaling 180 million pounds of vanadium pentoxide, equivalent to 46 million kilograms of vanadium content. 29 The second company, Silver Elephant Mining, owns Nevada Vanadium LLC, which is in the process of developing the Gibellini vanadium project near Eureka, Nevada. The Gibellini project is in the permitting process, with the Bureau of Land Management expected to reach a decision by August 2021. 30 The company plans to begin production in late 2023, producing 130 million pounds of vanadium pentoxide (33 million kilograms of vanadium content) over 14 years. 31 Other domestic vanadium resources exist, including Western Uranium & Vanadium's Sunday Mine Complex in Colorado and Anfield Resources' Velvet-Wood Mine in Utah, both of which have previously produced vanadium and have the potential to provide primary sources of vanadium, should market conditions support such production. In 2017, the United States Geological Survey (USGS) listed a total of 18 vanadium deposits in the United States, though data was not available on the extent of the deposits for most. 32 The identification of most of these deposits is drawn from assessments carried out in 1968 and 1975 by the American Institute of Mining, Metallurgical, and Petroleum Engineers and the U.S. Geological Survey. 33 29 “First Vanadium Announces Positive Preliminary Economic Assessment for the Carlin Vanadium Project in Nevada”, https://www.firstvanadium.com/index.php/news/2020/548-irstanadiumnnouncesositivereliminaryconomicsse20200511 . 30 Bureau of Land Management Accepting Comments for Gibellini Mine, August 17, 2020. Available at https://www.blm.gov/press-release/bureau-land-management-accepting-comments-gibellini-mine . 31 Silver Elephant Mining Corporate Presentation: Gibellini Vanadium, https://www.silverelephantmining.com/projects/gibellini-vanadium/. 32 Vanadium: Chapter U of Critical Mineral Resources of the United States—Economic and Environmental Geology Prospects for Future Supply (2017). https://pubs.usgs.gov/pp/1802/u/pp1802u.pdf . 33 Fischer, R.P., 1968, The uranium and vanadium deposits of the Colorado Plateau region, in Ridge, J.D., ed., Ore deposits of the United States, 1933-1967: New York, N.Y., American Institute of Mining, Metallurgical, and Petroleum Engineers; Fischer, R.P., 1975, Geology and resources of base-metal vanadate deposits: U.S. Geological Survey Professional Paper 926 -A, http://pubs.er.usgs.gov/publication/pp926A and Fischer, R.P., 1975, Vanadium resources in titaniferous magnetite deposits: U.S. Geological Survey Professional Paper 926-B, http://pubs.er.usgs.gov/publication/pp926B . Worldwide, most vanadium is produced via co-production with steelmaking, with vanadium-bearing iron ore used in steel furnaces that produce a vanadium slag that is further converted into vanadium pentoxide and ferrovanadium. Co-production accounted for 71% of global vanadium production in 2019. 34 The concentrations of vanadium-bearing iron ore in China, Russia, and South Africa have made co-production more economically feasible in these countries than in others. 34 Bushveld Minerals, About Vanadium, https://www.bushveldminerals.com/about-vanadium/. The main method of vanadium production in the United States is secondary production, using fossil fuel spent catalysts, residues, and ashes as feedstock. Fossil fuels can produce vanadium-bearing waste both through the use of vanadium catalysts used in the refining process and in the vanadium-rich residues generated from the burning of fuels high in vanadium content. After recovery, the spent catalysts and residues can be processed into vanadium pentoxide and ferrovanadium (see Figure 3). Secondary production of vanadium accounted for an estimated 11% of worldwide vanadium production in 2019, with the United States accounting for roughly one-third of the worldwide total (4% of total global production). 35 35 Ibid. BILLING CODE 3510-33-P EN18NO21.082 BILLING CODE 3510-33-C Both Applicants are secondary producers of vanadium, using vanadium-bearing waste feedstock to produce vanadium products: AMG Vanadium operates a facility in Cambridge, Ohio that produces ferrovanadium, and U.S. Vanadium operates a facility in Hot Springs, Arkansas that produces vanadium pentoxide. In addition to the Applicants there is one other domestic secondary vanadium producer: Gladieux Metals Recycling in Freeport, Texas and one converter: Evergreen Metallurgical (doing business as Bear Metallurgical Company) in Butler, Pennsylvania. AMG Vanadium's Ohio facility, which was originally built by the Vanadium Corporation of America, dates to 1952. Updates to the facility in 1970, following a merger with the Foote Mineral Corporation, led to the use of vanadium bearing slag as the facility's raw material input. A further overhaul after the acquisition of the facility by Advanced Metallurgical Group NV in 2007 resulted in AMG Vanadium's current use of spent catalyst as feedstock. 36 36 AMG Vanadium: Our History, at https://amg-v.com/timeline_amg_v/ . AMG Vanadium is the country's largest producer of ferrovanadium, with average annual production from 2016 to 2019 of [TEXT REDACTED]. 37 As stated above, the company uses vanadium-bearing spent catalyst as feedstock; [TEXT REDACTED]. 38 37 U.S. Department of Commerce, Bureau of Industry and Security, Section 232 Investigation into Imports of Vanadium Survey. 38 Ibid. The completion of a new facility in Zanesville, Ohio (approximately 25 miles from its existing Cambridge facility) will allow AMG Vanadium to more than double its ferrovanadium production capacity to 5.5 million kilograms per year. 39 The new facility is expected to be completed in 2021, at a cost of just over $200 million, and will support approximately 100 new jobs. 40 The company has indicated that its expansion makes sense despite low vanadium prices, based on the fees it receives from refiners to process spent catalyst, which they expect to exceed their operating costs in 2021. 41 [TEXT REDACTED] 42 39 AMG Vanadium to Duplicate Ohio Recycling Facility. https://www.spglobal.com/marketintelligence/en/news-insights/trending/2zqx3jqhyx72gfgkcowuzq2. 40 AMG Vanadium Constructing a Second Ohio Plant, Investing More Than $200 Million. https://www.jobsohio.com/news/posts/amg-vanadium-constructing-a-second-ohio-plant-investing-more-than-200-million/ . 41 AMG Annual General Meeting Minutes (May 1, 2019), as provided in public comments by Bushveld Minerals Limited, available at https://www.regulations.gov/document?D=BIS-2020-0002-0013 . 42 U.S. Department of Commerce, Bureau of Industry and Security, Section 232 Investigation into Imports of Vanadium Survey. In October 2019, U.S. Vanadium LLC (U.S. Vanadium) purchased the vanadium production facility located in Hot Springs, Arkansas, from EVRAZ Stratcor (Stratcor), which had owned the facility since 2006. Vanadium production in Hot Springs dates from mining and milling operations established in 1966 by Union Carbide Corporation, which sold the mill to Stratcor in 1986 and closed the mine in 1989. 43 43 Vanadium Mining, Encyclopedia of Arkansas. https://encyclopediaofarkansas.net/entries/vanadium-mining-5915/ . U.S. Vanadium was the only company to produce vanadium pentoxide in the United States in 2020, following Energy Fuels' cessation of production and the ongoing idling of Gladieux Metals Recycling. [TEXT REDACTED] 44 44 U.S. Department of Commerce, Bureau of Industry and Security, Section 232 Investigation into Imports of Vanadium Survey. Gladieux Metals Recycling (Gladieux) is the owner of an idle vanadium production facility in Freeport, Texas, which it purchased out of bankruptcy from Gulf Chemical and Metallurgical Corporation (Gulf) in 2017. 45 Gulf, which was majority-owned by the French company Eramet, had entered into bankruptcy and idled the vanadium processing facility as a result of low vanadium and molybdenum prices as well as the costs arising from environmental challenges. These costs included 11 felony pollution charges and a resulting $2.75 million fine in 2010, a $7.5 million fine in 2013, and over $50 million in capital expenditures related to environmental matters. 46 While the facility has been idle since 2017, Gladieux has been overhauling operations and has invested more than [TEXT REDACTED] to increase the plant's efficiency and make it more environmentally sound. 47 45 Callahan, Erinn. “Recycling company buys Gulf Chemical.” The Facts, May 16, 2017. https://thefacts.com/news/article_fe738e6b-8b64-54fb-afd0-c66cbe35f63e.html. 46 Gulf Chemical & Metallurgical Corporation Chapter 11 Bankruptcy Filing, as provided in public comments by Bushveld Minerals Limited, available at https://www.regulations.gov/document?D=BIS-2020-0002-0013 . 47 Gladieux Metals Recycling. Comment in response to Notice of Request for Public Comments on Section 232 National Security Investigation of Imports of Vanadium, July 20, 2020. https://www.regulations.gov/document?D=BIS-2020-0002-0033. Gladieux expects to restart operations [TEXT REDACTED]. 48 [TEXT REDACTED]. Gladieux will use spent catalyst as its feedstock; [TEXT REDACTED]. 49 48 U.S. Department of Commerce, Bureau of Industry and Security, Section 232 Investigation into Imports of Vanadium Survey. 49 Ibid. Bear Metallurgical (Bear) owns a facility in Butler, Pennsylvania, which [TEXT REDACTED], but converts vanadium pentoxide to ferrovanadium, primarily on a fee basis for customers. 50 Bear reported that [TEXT REDACTED] 51 Bear produced [TEXT REDACTED]. 52 50 Often referred to as a tolling arrangement, with Bear as the “toller” and their customers, who provide material to be converted, as “tollees.” 51 U.S. Department of Commerce, Bureau of Industry and Security, Section 232 Investigation into Imports of Vanadium Survey. 52 Ibid. Prior to declaring bankruptcy in 2016, Bear was a wholly-owned subsidiary of Gulf Chemical and Metallurgical (Gulf). The company reported entering into bankruptcy because low vanadium and molybdenum prices limited their toll conversion volumes, with their reliance on Gulf being a significant factor; as noted above Gulf itself also declared bankruptcy in 2016, and subsequently idled vanadium pentoxide production. 53 Bear was purchased in 2016 by Yilmaden Holding, a subsidiary of the Turkey-based Yildirim Group. 54 53 Gulf Chemical & Metallurgical Corporation Chapter 11 Bankruptcy Filing, as provided in public comments by Bushveld Minerals Limited, available at https://www.regulations.gov/document?D=BIS-2020-0002-0013 . 54 Mughal, Sarah. “Report: Yildirim Unit Wins Tender for Bear Metallurgical Assets.” September 11, 2016. S&P Global Market Intelligence. https://www.spglobal.com/marketintelligence/en/news-insights/trending/tetcr1ex6irl2ixbbkkqtw2. [TEXT REDACTED]. [TEXT REDACTED] 55 55 USGS Vanadium Mineral Commodity Summary, 2020. https://pubs.usgs.gov/periodicals/mcs2020/mcs2020-vanadium.pdf . EN18NO21.083 B. Vanadium Uses The vast majority of vanadium is used in steelmaking. Estimates for both U.S. and worldwide usage put the steel industry at 90 to 93% of total vanadium usage. 56 The inclusion of small amounts of vanadium—typically well under 1% of the total volume—into steel adds “strength, toughness, and wear resistance,” as well as oxidation prevention. 57 The resulting high-strength, low-alloy (HSLA) steel products are common in the construction industry, particularly in earthquake-resistant rebar, as well as in buildings, bridges, and cranes. HSLA steel products are also used in the automotive sector, in shipbuilding, and in various defense-related uses such as armor plating. 58 Additionally, use of vanadium is common in tool steel, with chromium-vanadium steel commonly used in hand tools with vanadium concentrations of 0.15 to 0.2%. 59 Vanadium is also used at significantly higher concentrations in high speed steel used in cutting and drilling tools, as well as aerospace applications such as gas engine turbines, at concentrations that can exceed 5% vanadium. 56 Vanadium: Chapter U of Critical Mineral Resources of the United States—Economic and Environmental Geology Prospects for Future Supply (2017). https://pubs.usgs.gov/pp/1802/u/pp1802u.pdf . 57 Ibid. 58 Ibid. 59 Which is better for hand tools? Chromium-Molybdenum or Chromium-Vanadium Steel. https://www.tekton.com/crmo-or-crv-steel . Substitution for vanadium is possible in most steel products. Molybdenum produces similar mechanical properties in tool steels and is substituted on the basis of price and the existence of pre-established supply chains. 60 In HSLA steels, niobium is a standard substitute for vanadium, though “significant technical adjustments to the steel production process” are required. 61 Many Chinese steel mills, for instance, carried out this substitution in 2018 in response to a surge in vanadium prices. 62 Nonetheless, vanadium is generally preferred in applications such as rebar, though Roskill—a major metal and chemical industry research and consultancy group—notes that “once mills are accustomed to niobium and have made the technical changes, they are unlikely to fully switch back.” 63 60 Ibid. 61 Vanadium: Chapter U of Critical Mineral Resources of the United States—Economic and Environmental Geology Prospects for Future Supply (2017). https://pubs.usgs.gov/pp/1802/u/pp1802u.pdf. 62 Press Release: Roskill: Niobium industry looking for a future beyond steel. https://www.globenewswire.com/news-release/2020/02/10/1982500/0/en/Roskill-Niobium-industry-looking-for-a-future-beyond-steel.html. 63 Vanadium Outlook to 2029, 18th Edition, Publicly available summary, https://roskill.com/market-report/vanadium/. Compared to its use in steel alloys, the aggregate use of vanadium in titanium alloys accounts for a much smaller percentage—approximately 3 to 5% of total vanadium demand—but it is “irreplaceable in aerospace applications.” 64 Most titanium products contain vanadium; the vanadium is typically incorporated into the titanium melt process as a master alloy that is 65% vanadium and 35% aluminum, producing a variety of titanium mill products. The most common is Ti-6Al-4V, a product that is 4% vanadium by weight and between 12 and 14% by cost. 65 Other titanium alloys contain up to 15% vanadium by weight. 64 Vanadium: Chapter U of Critical Mineral Resources of the United States—Economic and Environmental Geology Prospects for Future Supply (2017). https://pubs.usgs.gov/pp/1802/u/pp1802u.pdf. 65 Titanium Metals Corporation Public Comment on Section 232 National Security Investigation of Imports of Vanadium. Available at https://www.regulations.gov/document?D=BIS-2020-0002-0019. Most titanium products are used in the aerospace and military sectors, which account for approximately two-thirds of titanium mill product demand. 66 Titanium accounts for approximately 14% of the Boeing 787 airframe, for instance, and up to 39% of the weight of F-22 fighter jet. 67 Other national security titanium applications include ship components, military ground vehicles, and armor. Industrial use of titanium accounts for approximately 25% of demand; vanadium is used in the chemical industry, power plants, and desalination plants, but these sectors are more likely to use unalloyed “commercially pure” titanium. 66 Olin, Chris. Titanium Market Update: Highlighting Global Trends in 2017. Longbow Research. 67 Boeing 787: From the Ground Up. https://www.boeing.com/commercial/aeromagazine/articles/qtr_4_06/article_04_2.html and U.S. Department of Commerce. Bureau of Industry and Security. The Effect of Imports of Titanium Sponge on the National Security. The primary remaining vanadium uses, accounting for 2 to 4% of total vanadium demand, are categorized as chemical or non-metallurgical use. One key non-metallurgical use is in catalysts, with vanadium-based products being the most common catalysts used for selective catalytic reduction to reduce the production of nitrogen oxides in industrial power plants. 68 Vanadium is used as a catalyst in the production of sulfuric acid, itself an important industrial material used in the production of fertilizer, pulp and paper, titanium dioxide, cellulosic fibers and plastics, explosives, electronic chips, batteries, and pharmaceuticals. 69 Consumption of sulfuric acid is “regarded as one of the best indexes of a nation's industrial development.” 70 A significant national security use of vanadium within the chemical industry is in longwave-infrared (LWIR) imaging, used for night vision and targeting systems. Vanadium oxide is the most frequently used material in the bolometers supporting LWIR imaging. 71 68 Types of Catalysts for SCR Operations, https://sviindustrial.com/2020/04/08/types-of-catalysts-for-scr-operations/. 69 PubChem Sulfuric acid compound summary, NIH National Library of Medicine, National Center for Biotechnology Information. https://pubchem.ncbi.nlm.nih.gov/compound/Sulfuric-acid#section=Uses. 70 National Mineral Information Center, Sulfur Statistics and information. https://www.usgs.gov/centers/nmic/sulfur-statistics-and-information. 71 Andrew Voshell, Nibir Dhar, Mukti M. Rana, “Materials for microbolometers: vanadium oxide or silicon derivatives,” Proc. SPIE 10209, Image Sensing Technologies: Materials, Devices, Systems, and Applications IV, 102090M (28 April 2017); doi: 10.1117/12.2263999. An additional chemical use of vanadium is in large scale batteries. This accounts for a very small percentage of current usage—estimated well under 1% of total demand—but is an area in which some researchers have seen potential for significant expansion. Vanadium redox flow batteries (VRBs) were first patented in 1986, and VRB technology was advanced by Pacific Northwest National Laboratory in 2011, significantly shrinking the size of the batteries and increasing temperature tolerance. 72 These batteries have attributes that make them valuable for use in energy grids such as longer life cycles, lack electrolyte cross-contamination, and the ability to remain idle without losing capacity. 73 The vanadium accounts for approximately 30% of the cost of a vanadium redox flow battery, requiring between 3 and 6 kilograms of vanadium per kilowatt-hour of energy storage. 74 Estimates of the potential market growth of the vanadium redox flow battery vary wildly, from minimal amounts to estimates exceeding 40% compound annual growth. 75 To date, use of vanadium redox flow batteries has not shown sharp growth, in part due to cost. As the Department of Energy noted as part of its 2020 Energy Storage Grand Challenge Draft Roadmap, “future capital cost reductions will require replacing vanadium with lower cost raw materials to approach the $100/kWh targets required for wider-scale deployment of energy storage.” 76 72 Yang, Z Gary. It's Big and Long-Lived, and It Won't Catch Fire: The Vanadium Redox-Flow Battery. IEEE Spectrum, October 26, 2017. https://spectrum.ieee.org/green-tech/fuel-cells/its-big-and-longlived-and-it-wont-catch-fire-the-vanadium-redoxflow-battery. 73 Vanadium Redox Flow Batteries: Improving the performance and reducing the cost of vanadium redox flow batteries for large-scale energy storage. October 2013. U.S. Department of Energy Electricity Delivery & Energy Reliability, Energy Storage Program. Available at https://www.energy.gov/sites/prod/files/VRB.pdf. 74 Energy Storage & Vanadium Redox Flow Batteries 101, November 13, 2018. http://www.bushveldminerals.com/wp-content/uploads/2018/11/Energy-Storage-Vanadium-Redox-Flow-Batteries-101.pdf. 75 Ibid. 76 Department of Energy, “Energy Storage Grand Challenge Draft Roadmap”, available at https://www.energy.gov/energy-storage-grand-challenge/energy-storage-grand-challenge. VI. Global Vanadium Industry Conditions A. Overview Primary and co-production of vanadium is largely undertaken in four countries: China, Russia, South Africa, and Brazil (see Figure 5). In addition to these countries, the United States Geological Survey (USGS) lists known reserves in the United States and Australia. Worldwide resources significantly exceed known reserves, which are considered “a working inventory of mining companies' supplies of an economically extractable mineral commodity;” global reserves are estimated at 22 million metric tons, with world vanadium resources estimated to exceed 63 million metric tons. 77 77 United States Geological Survey Mineral Commodity Summaries—Vanadium, https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information. BILLING CODE 3510-33-P EN18NO21.084 BILLING CODE 3510-33-C Countries other than the United States that are in the process of developing significant reserves include Canada and Kazakhstan. Australia already maintains notable vanadium reserves, which it is seeking to expand, but does not have any recorded mine production. The Government of Australia reports nine vanadium production projects underway, with five of these at advanced stages of exploration, and some vanadium production possible in 2021. 78 One mine—the Windimurra mine—completed a feasibility study in April 2020 and expects to produce 4,250 tons of vanadium content annually. 79 The Windimurra mine has successfully produced vanadium in the past, operating from 1999 to 2003 with an annual production capacity of 3,000 tons contained vanadium. 80 Four other Australian projects are in the process of permitting, design, or pilot studies with a total potential annual production of 22,000 tons of contained vanadium. 81 78 Submission from the Australian Government to the United States Department of Commerce, Section 232 National Security Investigation into Imports of Vanadium, submitted to https://www.regulations.gov , docket BIS-2020-0002 July 20, 2020. 79 Ibid. 80 United States Geological Survey, Vanadium Minerals Yearbook reports. Available at https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information. 81 Submission from the Australian Government to the United States Department of Commerce, Section 232 National Security Investigation into Imports of Vanadium, submitted to https://www.regulations.gov , docket BIS-2020-0002 July 20, 2020. Several mining projects for vanadium-bearing iron ore in Canada are in exploratory phases. Two are in the Lac Doré area of Québec, with partial funding provided by the government of Québec. One of the two, operated by BlackRock Metals, plans to begin operations in 2021, with cast iron and ferrovanadium as the main products. 82 This project is expected to yield 5,200 tons of ferrovanadium annually with 80% vanadium content, to be processed at a nearby facility. 83 The second company, VanadiumCorp Resources, is in the exploration phase, with drill testing programs completed in 2019 and a mineral resource estimate completed in October 2020. 84 The estimate showed 8 million metric tons of measured magnetite concentrate at 1.2% vanadium pentoxide content, equal to 56,000 tons of contained vanadium, with an additional 324,000 tons indicated and 155,000 tons inferred. 85 A third Canadian company, Vanadium One Iron Corporation, released the results of its PEA in February 2020 for its Mont Sorcier property in Québec, anticipating the ability to produce five million tons of ore per year with a 0.6% vanadium pentoxide content. 86 82 “Métaux BlackRock a un client pour son titane”, Radio-Canada, May 8, 2019, https://ici.radio-canada.ca/nouvelle/1168744/ferrovanadium-usine-saguenay-client-mine-chibougamau. 83 “BlackRock Project: Iron Ore Exploitation at lac Doré”, https://iaac-aeic.gc.ca/050/documents/p62105/90319E.pdf. 84 VanadiumCorp Lac Doré Vanadium Project, http://www.vanadiumcorp.com/projects/lac-dore-vanadium-project/. 85 VanadiumCorp Reports Lac Dore Mineral Resource Estimate (MRE). October 29, 2020. https://www.vanadiumcorp.com/releases/vanadiumcorp-reports-the-lac-dore-mineral-resource-estimate-mre-2/. 86 Vanadium One Iron Corporation PEA Results, February 2020, https://www.vanadiumone.com/pea-results/. Figure 6—Estimated New Mine Production Potential of Select Vanadium Projects in Canada and Australia [In metric tons contained vanadium] Country Project Status Estimated reserves Estimated annual production Australia Atlantic Vanadium: Windimurra Mine In Development 131,936 4,256 Australia Multicom: Saint Elmo Mine Finalizing Environmental Approvals 112,000 5,600 Australia Australian Vanadium Ltd: Australian Vanadium Project Feasibility Study 97,152 5,715 Australia TNG Limited: Mount Peake Mine Engineering Design 124,320 3,360 Australia Technology Metals Australia: Gabanintha Mine Feasibility Study Completed 2019 114,688 7,168 Australia Total 580,096 26,099 Canada BlackRock Metals: Chibougamou Mine Authorized 176,439 4,152 Canada VanadiumCorp Resources: Lac Doré Project Mineral Resource Estimate Complete 379,273 10,306 Canada VanadiumOne: Mont Sorcier Project Preliminary Economic Analysis Complete 117,600 16,800 Canada Total 673,312 31,258 Sources: Submission from the Australian Government to the United States Department of Commerce, Section 232 National Security Investigation into Imports of Vanadium, submitted to https://www.regulations.gov , docket BIS-2020-0002 July 20, 2020. BlackRock Mining Project Summary. Available at https://comexqc.ca/en/fiches-de-projet/projet-dexploitation-dun-gisement-fer-vanadium-metaux-blackrock-inc/ . VanadiumCorp Reports Lac Doré Mineral Resource Estimate. October 29, 2020. Available at https://www.vanadiumcorp.com/releases/vanadiumcorp-reports-the-lac-dore-mineral-resource-estimate-mre-2/. VanadiumOne Iron Corp. Preliminary Economic Analysis Results, February 2020. Available at https://www.vanadiumone.com/pea-results/. In Kazakhstan, the Ferro-Alloy Resources Group, based in Guernsey and listed on the London and Astana International Stock Exchanges, owns Firma Balusa, LLP, which holds the rights to the Balasausqandiq vanadium deposit in the southern part of the country. The site currently has minimal vanadium production, but has rapid expansion plans, forecasting in 2019 reaching production levels of 4,000 tons contained vanadium in 2020 and 13,000 tons in 2023. 87 The projected 2023 production would make Kazakhstan the world's third leading producer of mined vanadium based on current totals. The company's production levels appear significantly behind its initial plans, attributed primarily to the COVID-19 pandemic; through August of 2020 the company indicated it had produced 168 tons of vanadium pentoxide (94 tons contained vanadium) from secondary concentrate, and indicated the development of the Balasausqandiq deposit was ongoing. 88 The company says it “plans to become the world's lowest cost primary producer.” 89 87 Ferro-Alloy Resources Ltd Corporate Presentation, March 2019. http://ferro-alloy.com/en/news/FAR%20-%20Corporate%20Presentation%20-%20%20update%20March%202019.pdf. 88 Ferro-Alloy Resources Unaudited interim financial results for the six months to 30 June 2020. http://www.ferro-alloy.com/en/investors/financials/. 89 Ferro-Alloy Resources Corporate Profile. http://www.ferro-alloy.com/en/company/corporate-profile/. Beyond the estimated 73,000 tons of mine-produced vanadium reported worldwide in 2019, secondary production added as much as 30,000 tons to worldwide totals, with most of the additional production in the U.S., Germany, Austria, Japan, and Taiwan. 90 Significant producers outside of the U.S. include Treibacher in Austria, AMG Technologies in Germany, Shinko Chemical, Taiyo Koko, and Metal Technology in Japan, and Hong Jing Environment, Plum Movax, and Full Yield Industry of Taiwan. Interest in secondary production has risen in recent years as tightened environmental controls on fuels has increased interest in processing spent catalyst and fossil fuel residues. In addition to their U.S. expansion, AMG is exploring the construction of facilities in Saudi Arabia and China to process catalysts from those regions. 91 90 Based on USGS estimates and Perles, Terry. Vanadium Market Fundamentals: China's 2019 4th International Vanadium Forum Chengdu, Sichuan, China. April 13, 2019. Submitted as public comment by Treibacher Industrie, July 20, 2020. Available at https://www.regulations.gov/document?D=BIS-2020-0002-0026. 91 AMG 2019 Annual Report. Available at https://ig9we1q348z124x3t10meupc-wpengine.netdna-ssl.com/wp-content/uploads/AMG-Annual-Report-Web-FINAL.pdf and Shell & AMG Recycling B.V. Sign Agreement with Shandong Yulong Petrochemical Co., Ltd to Assess Building a Spent Residue Upgrading Catalyst Recycling Facility. Available at https://www.globenewswire.com/news-release/2020/10/26/2114333/0/en/Shell-AMG-Recycling-B-V-Sign-Agreement-with-Shandong-Yulong-Petrochemical-Co-Ltd-to-Assess-Building-a-Spent-Residue-Upgrading-Catalyst-Recycling-Facility.html. BILLING CODE 3510-33-P EN18NO21.085 BILLING CODE 3510-33-C While China accounts for an estimated 50 to 60% of global vanadium production, exports of vanadium from China constitute only approximately 15% of worldwide vanadium exports, because most Chinese production is consumed domestically in the steel industry. Primary producers South Africa and Brazil, as well as European Union countries, which represent a much larger share of global vanadium exports than production. The European Union alone accounts for over one-quarter of global exports of contained vanadium (see Figure 8). Figure 8—Estimated 2019 Share of Production and Exports of Vanadium Content in Vanadium Pentoxide and Ferrovanadium Country Estimated 2019 share of world production (%) Estimated 2019 share of world exports (%) China 55 15 Russia 18 15 European Union Countries * 9 27 South Africa 8 13 Brazil 7 13 United States 4 4 Japan 2 1 India 1 1 South Korea <1 7 Taiwan <1 2 Thailand <1 1 Canada <1 2 Sources: U.S. Geological Survey, TTP Squared, Bureau of Industry and Security, IHS Markit Global Trade Atlas. * Includes exports within the European Union. Vanadium production generally results first in vanadium pentoxide, which may be exported or further processed into ferrovanadium for use in steel. A large portion of the difference between world production and export share for E.U. countries results from their import of vanadium oxides—principally from Russia—for conversion into ferrovanadium, which was then exported (see Figure 9). In fact, nearly all Russian exports of vanadium oxide went to the Czech Republic, home to EVRAZ Nikom, one of the E.U.'s main producers of ferrovanadium. Figure 9—Top World Trade Pairings 2016-2019: Vanadium Oxides (HTS 2825.30) [In tons vanadium oxide] Exporter Importer 2016 2017 2018 2019 Share of country's exports (%) Share of world exports (%) Russia Czech Republic 6,656 8,656 8,676 9,683 99 23 South Africa Netherlands 3,415 3,225 3,871 3,711 56 10 China South Korea 3,140 4,620 3,186 2,750 47 9 Brazil Netherlands 1,740 4,343 4,039 3,380 37 9 Brazil South Korea 3,640 1,460 660 2,320 22 5 South Korea Japan 1,181 2,357 1,840 2,051 73 5 South Africa United States 1,676 1,744 1,603 1,521 26 4 Brazil United States 660 1,377 2,442 1,993 18 4 China Netherlands 2,376 1,860 1,199 615 21 4 Netherlands Austria 2 46 3,100 1,773 75 3 Brazil Canada 980 940 1,320 1,340 13 3 China Japan 926 720 917 722 11 2 China United States 930 565 639 69 8 1 Brazil Japan 680 440 440 440 6 1 China Canada 120 420 599 510 6 1 South Africa Japan 267 244 391 560 6 1 Taiwan United States 533 510 57 126 38 1 Thailand India 60 320 520 240 55 1 Brazil India 260 660 200 0 3 1 South Africa India 0 0 486 480 4 1 All Countries All Countries 33,293 37,220 39,074 38,719 Source: IHS Markit Global Trade Atlas. Czech ferrovanadium, in turn, was exported principally to the United States, Japan, Netherlands, and Germany (see Figure 10). Other major exporters of ferrovanadium include the Netherlands (the principal importer of South African vanadium oxide), South Korea (the principal importer of Chinese vanadium oxides), and China which, despite exporting a relatively small percentage of their production still accounts for a major portion of global exports due to the sheer size of their production. Figure 10—Top World Trade Pairings 2016-2019: Ferrovanadium (HTS 7202.92) [In tons ferrovanadium] Exporter Importer 2016 2017 2018 2019 Share of country's exports (%) Share of world exports (%) Netherlands Germany 1,902 1,832 3,758 1,913 28 7 South Africa Netherlands 2,112 1,662 1,563 1,579 59 5 China Netherlands 2,380 1,540 1,549 930 28 5 South Korea Netherlands 1,364 1,714 1,543 1,333 53 4 China Japan 1,467 1,323 1,635 1,370 25 4 China South Korea 975 995 1,667 1,661 23 4 Czech Republic United States 1,016 940 1,045 1,691 18 3 Netherlands United States 1,398 186 2,091 893 13 3 Czech Republic Japan 1,025 740 1,020 806 14 3 Netherlands Italy 718 895 1,039 523 9 2 China Taiwan 1,109 595 787 644 14 2 Canada United States 142 767 869 1,266 91 2 United States Canada 474 295 1,403 843 59 2 Czech Republic Netherlands 870 457 270 1,184 11 2 Czech Republic Germany 1,162 1,009 361 247 11 2 Netherlands Spain 784 654 484 175 6 2 South Africa Japan 312 404 605 640 17 1 South Korea Japan 596 258 459 601 17 1 Russia Netherlands 404 700 360 420 32 1 United States Mexico 304 266 642 315 30 1 All Countries All Countries 33,477 30,849 39,300 32,367 Source: IHS Markit Global Trade Atlas. In recent years, the global vanadium market has been subject to severe price fluctuations. Three times since 2004 the benchmark vanadium pentoxide price has more than doubled in under a year, after which a precipitous drop to more typical price levels occurs (see Figure 11). These rapid price changes have led to a history of investment and expansion during price spikes and plant idlings and bankruptcies in market economies during and following price drops. Starting new primary production has been especially challenging, as new mining ventures can take many years to progress through exploration and permitting to production. The Windimurra mine in Australia, for instance, is in the midst of its fourth re-opening attempt since 1999, having operated from 2000 to 2003, invested in reopening from 2005 to 2009 that ultimately failed to materialize, reopening with new ownership from 2012 to 2014, and currently under development by a new owner. 92 92 McKinnon, Stuart. Vanadium Price Boom Offers Hope of WIndimurra Revival. The West Australian, April 2, 2018. Available at https://thewest.com.au/business/mining/vanadium-price-boom-offers-hope-of-windimurra-revival-ng-b88792684z. EN18NO21.086 Compared to primary production facilities, secondary production facilities can have less extended lead times, but still take years to complete. The establishment of AMG Vanadium's new facility in Ohio was announced in October 2018, broke ground in August 2019, and is expected to be completed in 2021. 93 The Gladieux facility in Freeport, Texas was purchased in 2017 and is not yet operational. 93 AMG Vanadium Muskingum County Facility website. https://amg-v.com/muskingumfacility/. B. Prior Trade Investigations The U.S. government has previously taken action against artificially low-priced vanadium product imports. Several antidumping investigations conducted by the Department of Commerce and the USITC affirm that sources of imported ferrovanadium from nearly all countries that mine vanadium ore have engaged in dumping that injures U.S. producers. Among the significant miners of vanadium ore, only Brazil has not been subject to an antidumping finding. AMG Vanadium (or its predecessor) has been a petitioner for all ferrovanadium antidumping cases, joined by Bear, Gulf, and Stratcor (or its predecessor) for the petitions on China, South Africa, and Korea. Figure 12 lists USITC investigations into vanadium imports since 1995: Figure 12—U.S. International Trade Commission Vanadium Cases Since 1995 Investigation Date Finding Ferrovanadium and Nitrided Vanadium from Russia July 30, 1995 Affirmative. Ferrovanadium and Nitrided Vanadium from Russia (First Review) May 15, 2001 Affirmative. Ferrovanadium from China and South Africa January 28, 2003 Affirmative. Ferrovanadium and Nitrided Vanadium from Russia (Second Review) September 28, 2006 Affirmative. Ferrovanadium from China and South Africa (First Review) November 24, 2008 Affirmative. Ferrovanadium from China and South Africa (Second Review) January 28, 2015 Affirmative. Ferrovanadium and Nitrided Vanadium from Russia (Third Review) August 22, 2012 Negative. Ferrovanadium from Korea March 17, 2017 Affirmative. Ferrovanadium from China and South Africa (Third Review) August 7, 2020 Affirmative. Source: United States International Trade Commission. Russia In July 1995, the Department of Commerce found that imports of ferrovanadium and nitrided vanadium from Russia were sold in the United States at less than fair value, and the USITC found that the dumped imports were materially injuring the U.S. industry. In the course of the investigation, USITC determined that ferrovanadium and nitrided vanadium, despite having somewhat disparate end uses, constituted a single like product based on the significant vanadium content and generally interchangeable use in steel alloys. 94 94 U.S. International Trade Commission. Ferrovanadium and Nitrided Vanadium from Russia. Investigation No. 731-TA-702, Final. https://www.usitc.gov/publications/701_731/pub2904.pdf. This affirmative finding was renewed following the Department of Commerce's and USITC's first five-year review of the antidumping duty order in May 2001, as well as the second five-year review in September 2006. At the third set of five-year reviews completed in August 2012, the USITC noted there had been no subject imports since 1996, and that in the case of nitrided vanadium there had been no U.S. production since 1992. 95 However, while there were no imports of ferrovanadium from Russia during the time period, there were imports of Russian vanadium pentoxide, which were then converted to ferrovanadium in the U.S., as well as imports of ferrovanadium from Russian-owned EVRAZ Nikom in the Czech Republic, made from Russian-sourced vanadium pentoxide. 96 95 U.S. International Trade Commission. Ferrovanadium and Nitrided Vanadium from Russia. Investigation No. 731-TA-702 (Third Review). https://www.usitc.gov/publications/701_731/pub4345.pdf. 96 Ibid. The USITC's third review found, contrary to the prior reviews, that imports of ferrovanadium from Russia would not be likely to significantly increase if the antidumping order was revoked. The decision noted that Russian capacity and production had declined from prior significant excesses, with less focus on exporting ferrovanadium. 97 The report also noted the increased tendency to supply the U.S. market with vanadium pentoxide, rather than the subject product ferrovanadium. On this basis, the antidumping order against Russian ferrovanadium was revoked in October 2011. 97 Ibid. China and South Africa In January 2003 the Department of Commerce determined that imports of ferrovanadium from China and South Africa were sold in the United States at less than fair value and the USITC found that the dumped imports were materially injuring the U.S. industry. In the first sunset reviews (completed November 2008), second sunset reviews (completed January 2015), and third sunset reviews (completed August 2020), the Department of Commerce and the USITC determined that revocation of the existing antidumping duty orders on ferrovanadium from China and South Africa would likely lead to continuation or recurrence of dumping and material injury to an industry in the United States within a reasonably foreseeable time. 98 98 Ferrovanadium from the People's Republic of China and the Republic of South Africa: Continuation of Antidumping Duty Orders, 73 FR 77609, December 19, 2008; Ferrovanadium From the People's Republic of China and the Republic of South Africa: Continuation of Antidumping Duty Orders, 80 FR 8607, February 18, 2015; Ferrovanadium From the Republic of South Africa and the People's Republic of China: Continuation of Antidumping Duty Orders, 85 FR 51408, August 20, 2020. Following the imposition of the antidumping order in 2002, imports of ferrovanadium from China fell from an average of 497,000 kilograms of contained vanadium per year from 1999 to 2001 to “zero or close to zero in every year since 2002.” 99 USITC cited China's status as the world's largest producer of ferrovanadium and its continued increases in capacity as reasons for an affirmative injury finding. 99 U.S. International Trade Commission. Ferrovanadium and Nitrided Vanadium from China and South Africa. Investigation Nos. 731-TA-986-987 (Third Review). https://www.usitc.gov/publications/701_731/pub5099.pdf. Imports of ferrovanadium from South Africa showed similar declines following the initial antidumping order. From an average of 758,000 kilograms of vanadium content per year from 1999 to 2001, by 2003 imports had fallen to account for no more than 0.1% of U.S. market share. 100 As was the case with Russian providers, since the imposition of antidumping duties South African vanadium has continued to enter the United States in other forms not subject to antidumping duties, such as vanadium pentoxide and nitrided vanadium. 100 Ibid. Korea In March 2017 the Department of Commerce determined that imports of ferrovanadium from Korea were sold in the United States at less than fair value and the USITC found that the dumped imports were materially injuring the U.S. industry. Unlike Russia, China, and South Africa, Korea is not a significant source of vanadium production. Rather, the USITC noted that Korean ferrovanadium was produced primarily from vanadium pentoxide originally sourced from China. 101 The USITC found that ferrovanadium from Korea was sold in the United States in “increasing and significant volume . . . at declining prices.” 102 101 U.S. International Trade Commission. Ferrovanadium and Nitrided Vanadium from Korea. Investigation Nos. 731-TA-1315. https://www.usitc.gov/publications/701_731/pub4683.pdf. 102 Ibid. C. U.S. Duties on Vanadium Imports As of November 2020, all vanadium products in the scope of this investigation, with the exception of vanadium ore and concentrates (Harmonized Tariff Schedule of the United States (HTSUS) 2615.90.6090) and ash and residues containing vanadium (HTSUS 2620.40.0030 and 2620.99.1000) are subject to duties between 2 and 5.5% (see Figure 13). Figure 13—Duties on Vanadium Products Heading/subheading/product 10 Digit HTS code Duty (percent) Vanadium Oxides 2825.30.0010 2825.30.0050 5.5 5.5 Ferrovanadium 7202.92.0000 * 4.2 Vanadium Carbides 2849.90.5000 3.7 Vanadates 2841.90.1000 5.5 Vanadium Ore and Concentrates 2615.90.6090 Free Ash and Residues Containing Vanadium 2620.40.0030 2620.99.1000 Free Free Vanadium Sulfate 2833.29.3000 5.5 Vanadium Hydrides, Nitrides, Azides, Silicides, and Borides 2850.00.2000 5.5 Vanadium, Unwrought and Wrought 8112.92.7000 8112.99.2000 2 2 Source: United States International Trade Commission and U.S. Department of Commerce, Bureau of Industry and Security, as of December 7, 2020. * Ferrovanadium products from China, South Africa, and Korea are subject to additional antidumping duties. Antidumping duties on ferrovanadium add significantly to the rates for ferrovanadium from China, South Africa, and Korea (see Figure 14). Figure 14—Antidumping Duties on Ferrovanadium Country Exporter/producer Dumping rate (percent) China Pangang Group International Economic & Trading Corporation 12.97 China-Wide 66.71 South Africa Highveld Steel and Vanadium Corporation, Ltd 116.00 Xstrata South Africa (Proprietary) Limited 116.00 All Others 116.00 Korea Korvan Ind. Co., Ltd 3.22 Fortune Metallurgical Group Co., Ltd 54.69 Woojin Ind. Co., Ltd 54.69 All Others 3.22 Source: Federal Register ; 68 FR 4168, 68 FR 4169, 82 FR 14874. In addition to the above general and antidumping duties, China has been subject to Section 301 duties on all subject vanadium products except HTSUS 2620.40.0030 (ash and residue containing mainly aluminum and vanadium-bearing materials) of 10% starting September 21, 2018 and 25% starting August 20, 2019. Prior to the imposition of Section 301 duties, vanadium oxides was the only category of vanadium product with significant imports from China. Imports of vanadium via vanadium oxides fell from a monthly average of 31,500 kilograms in the year prior to the initial announcement of Section 301 tariffs to 7,200 kilograms per month in year following the imposition of tariffs. Between the initial announcement of Section 301 duties in April 2018 and the imposition of duties on vanadium products in September 2018, imports of vanadium oxides from China rose to 96,000 kilograms of contained vanadium per month, perhaps due to companies increasing inventories in anticipation of duties (see Figure 15). BILLING CODE 3510-33-P EN18NO21.087 BILLING CODE 3510-33-C VII. Findings A. Vanadium Is Essential to U.S. National Security 1. Vanadium Is Considered a Critical Mineral Vanadium is one of the 35 minerals included by the Department of Interior (DOI) on the Critical Minerals List. This list, which President Trump directed DOI to define in E.O. 13817, includes minerals which meet the following criteria: (i) A non-fuel mineral or mineral material essential to the economic and national security of the United States, (ii) the supply chain of which is vulnerable to disruption, and (iii) that serves an essential function in the manufacturing of a product, the absence of which would have significant consequences for our economy or our national security. 103 103 White House, “Presidential Executive Order on a Federal Strategy to Ensure Secure and Reliable Supplies of Critical Materials”, (December 20, 2017), https://trumpwhitehouse.archives.gov/presidential-actions/presidential-executive-order-federal-strategy-ensure-secure-reliable-supplies-critical-minerals/. In its report, Critical mineral resources of the United States—Economic and environmental geology and prospects for future supply, USGS observed that vanadium is used in steel alloys which are in turn used in critical sectors including bridges, pipelines, ships, rail cars, truck bodies, and military vehicles, and is “irreplaceable for its role in aerospace applications” via titanium alloys. 104 For this reason among others, and based on input from other U.S. government agencies, USGS included vanadium on the critical minerals list. 104 Kelley, K.D., Scott, C.T., Polyak, D.E., and Kimball, B.E., 2017, Vanadium, chap. U of Schulz, K.J., DeYoung, J.H., Jr., Seal, R.R., II, and Bradley, DC, eds., Critical mineral resources of the United States—Economic and environmental geology and prospects for future supply: U.S. Geological Survey Professional Paper 1802, p. U1-U36, https://doi.org/10.3133/pp1802U. As discussed in Section V of this report, in addition to its use in alloys, vanadium is a vital component in the production of vanadium redox flow batteries (VRBs), chemical catalysts, ceramics, electronics, and other vanadium chemicals. VRBs are a potential area of large scale energy storage, a fast-growing sector that will help support the growth and reliability of the power grid. As noted above, sulfuric acid's wide array of manufacturing uses means its production is highly correlated with industrial development. Though a small percentage of overall vanadium demand, these catalyst uses are essential for multiple critical infrastructure and commercial sectors. USGS cited continued need for steel products as a driver of vanadium demand, specifically noting expansion of Chinese demand, increased vanadium content in steel rebar in China and Japan, growing steel production in India, and expansion of energy uses of vanadium. As a result, USGS predicts that new sources of vanadium and more efficient extraction from existing sources will be required to supplement the current limited supply. Further, as vanadium is required for the manufacture of titanium products and is a significant alloying agent in high strength steel, limited vanadium production capacity could create a supply bottleneck. Such a bottleneck is one of the “vulnerabilities” identified in E.O. 13817. 105 105 White House, “Presidential Executive Order on a Federal Strategy to Ensure Secure and Reliable Supplies of Critical Materials”. 2. Vanadium Is Required for National Defense Systems Vanadium, as a result of its use in steel and titanium alloys, is a critical input to many defense systems. The 2017 and 2019 Department of Commerce Section 232 reports on the effects of steel and of titanium sponge on national security found that those metals were required for national defense. Therefore, because vanadium is frequently used in these metals and there is no suitable substitute for vanadium in many of these products, vanadium is also required to meet national defense needs. DLA has identified [TEXT REDACTED] defense systems that require the use of vanadium, including but not limited to the [TEXT REDACTED]. The average titanium content for military airframes that entered service after 2000 is 30%, implying vanadium content of roughly 1% by weight. 106 For example, each F-22A Raptor aircraft contains at least six separate titanium alloys, some containing as much as 15% vanadium by weight, with a finished aircraft containing approximately 9,000 pounds of titanium. 107 Building each aircraft requires significantly more material: About 50 metric tons of titanium, which in turn requires approximately 2 metric tons of vanadium content based on a standard Ti-6Al-4V alloy. 108 The F-35 Lightning II requires an estimated 15 tons of titanium per plane to build. 109 Overall, defense uses account for an estimated 10% of titanium demand, equivalent to approximately 43 tons of vanadium content per year. 110 106 U.S. Department of Commerce. Bureau of Industry and Security. The Effect of Imports of Titanium Sponge on the National Security ( Washington, DC: 2019) (“Titanium Report”) and based on use of standard Ti-6Al-4V alloy. 107 Cotton, James D. et al. Titanium Alloys on the F-22 Fighter Airframe. Advanced Materials & Processes, May 2002. https://www.asminternational.org/documents/10192/1756963/amp16005p025.pdf/c0972040-8169-4998-8699-f051fab52d9b/AMP16005P025. 108 Seong, Somi et al. Titanium: Industrial Base, Price Trends, and Technology Initiatives, 2009. https://www.rand.org/content/dam/rand/pubs/monographs/2009/RAND_MG789.pdf. 109 Ibid. 110 Based on average annual 2016-2019 USGS vanadium apparent consumption of 8,590 tons, titanium uses accounting for 5% of vanadium consumption, and defense use accounting for 10% of titanium demand. The Department's 2018 Steel Report aligns with this finding. The report found that the Department of Defense has “a large and ongoing need for a range of steel products that are used in fabricating weapons and related systems for the nation's defense.” Among the defense steel uses cited were aircraft carriers, submarines, and tanks, as well as the high-strength steel alloys used on aircraft and discussed above. The Steel Report indicated that Department of Defense's steel requirements amount to 3% of annual overall U.S. steel production, equivalent to approximately 230 metric tons of vanadium content per year. 111 In addition to direct incorporation of vanadium into defense systems, the production of these systems relies on vanadium-containing infrastructure, as tool steels and high speed steels often have a significantly higher vanadium content than other steel. 111 Based on average annual 2016-2019 USGS vanadium apparent consumption of 8,590 tons, steel uses accounting for 90% of vanadium consumption, and defense use accounting for 3% of steel demand. 3. Vanadium Is Required for Critical Infrastructure As with national defense systems, vanadium is a key component of much of the steel and titanium used in U.S. critical infrastructure. Vanadium is a key feature in high-strength, low-alloy (HSLA) steel products used in the construction industry, including earthquake-resistant rebar, bridges, and construction cranes. Hand tools and high-speed steel tools for cutting and boring commonly contain vanadium as a strengthening agent. The commercial aerospace industry also relies on vanadium through its use of titanium alloys, and the chemical production industry uses vanadium directly for production of sulfuric acid. The Department's 2018 Steel Report determined that 54 million metric tons of steel per year were consumed in critical industries, accounting for half of all domestic steel consumption. 112 Steel had uses in all of the United States' 16 critical infrastructure sectors, with the transportation, energy, and water treatment sectors specifically noted as vulnerable to disruption. A conservative estimate of the use of vanadium in critical infrastructure via steel products amounts to 3,865 tons of vanadium demand annually. 113 112 Based on the 16 designated critical infrastructure sectors identified pursuant to Presidential Policy Directive 21 (PPD-21). https://www.cisa.gov/critical-infrastructure-sectors. 113 Based on average annual 2016-2019 USGS vanadium apparent consumption of 8,590 tons, steel uses accounting for 90% of vanadium consumption, and critical infrastructure use accounting for 50% of steel demand. Use is likely higher, as critical infrastructure sectors are more likely to use HSLA and full alloy steels. In the titanium industry, nearly all vanadium-bearing titanium products have end-uses in critical infrastructure and defense sectors. Beyond the 10% of titanium consumed via military uses, an estimated 55% of consumption is in commercial aerospace products—part of the transportation critical infrastructure sector—with nearly all remaining consumption in industrial or medical uses. Use of vanadium in critical infrastructure via titanium products thus amounts to between 236 tons and 365 tons per year. 114 114 Based on average annual 2016-2019 USGS vanadium apparent consumption of 8,590 tons, titanium uses accounting for 5% of vanadium consumption, and critical infrastructure use accounting for between 55% and 85% of titanium demand; commercial aerospace estimated at 55% of titanium demand, but up to 85% of vanadium-alloyed titanium demand, with industrial and medical titanium commonly unalloyed. Nearly all non-metallurgical uses of vanadium are also related to critical infrastructure. The energy sector is a primary destination; vanadium is used as a catalyst in industrial power plants and as the electrolyte in vanadium redox flow batteries. The other significant non-metallurgical use is in the chemical production sector, where vanadium is used as a catalyst in the production of sulfuric acid and maleic anhydride. With non-metallurgical use accounting for an estimated 5% of vanadium demand, direct vanadium use in critical infrastructure amounts to approximately 430 tons per year. 115 115 Based on average annual 2016-2019 USGS vanadium apparent consumption of 8,590 t. With indirect use in all 16 critical infrastructure sectors, direct use in the energy and chemical production sectors, and an “irreplaceable” status in titanium alloys used in the transportation sector, vanadium has a key role in U.S. critical infrastructure. Overall annual critical infrastructure use of vanadium amounts conservatively to 4,542 tons. 4. Vanadium Has Significant Effects on Other Critical Industries As discussed above, vanadium has essential uses in steel and titanium production, and vanadium resources in the United States are often co-located with uranium. Titanium and uranium have been identified as critical minerals by the Department of Interior, with steel, titanium sponge, and uranium all the subjects of recent Section 232 investigations. The impact of the vanadium industry on other critical industries is significant, underscoring vanadium's status as a critical commodity. Following the Section 232 investigation into the effect of imports of steel products on national security, on March 8, 2018, the President issued a proclamation concurring with the Secretary of Commerce's finding that imports of steel articles threatened to impair U.S. national security, and imposing a 25% tariff on imports. The goal of the tariff was to help ensure the economic viability of the domestic steel industry, which was threatened by low-cost imports. The basis for the President's actions, and the Secretary's findings, was the critical role of the steel industry in national security. As discussed above, the steel industry accounts for approximately 90% of the U.S. demand for vanadium. 116 Compared to the estimated $92 billion worth of raw steel produced in the Unite [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2021-24957. Public record. Not legal advice.