Strategic Gaps

Rebuilding the stockpile

For all its vast natural wealth, the U.S. is dangerously dependent on foreign suppliers for a number of imports vital for defense production or high-technology equipment. President Reagan warned last month that "it is now widely recognized that our nation is vulnerable to sudden shortages in basic raw materials." Last week the Senate subcommittee on energy and mineral resources continued hearings on how to expand domestic production of strategic materials and start increasing the small American stockpile.

Reagan has given the General Services Administration $100 million to start buying as many as 15 materials for the National Defense Stockpile. In addition to high-temperature metals used in jet engines, such as cobalt, titanium and columbium, the Government will consider buying oddities like sisal fibers, a key ingredient for rope; castor-bean oil, a high-quality lubricant; and pyrethrum, an insecticide. While the amounts are not yet great, they represent a new direction in policy. Said Congressman James Santini, a Democrat from Nevada, "This is both a substantive and symbolic beginning. It's long overdue."

The National Defense Stockpile was started in 1939 and grew rapidly during the Korean War, when the U.S. committed $8 billion to expand production of some 90 strategic materials and subsequently stockpiled them in more than 100 locations around the U.S. Manganese and chromium were stored in huge outdoor dumps, and rubber was cached in refrigerated warehouses. The goal was to have enough material to sustain military production and meet industrial needs during a three-year war.

But in the early 1970s the Government started selling off its strategic hope chest in order to cut down on imports and improve the balance of payments. The result is that the stockpile is sadly depleted. Only 21 of the 62 basic materials in storage are now in sufficient supply to meet national security requirements. For instance, the U.S. imports virtually all of its platinum-group metals, which are used for oil-refining equipment and to make catalytic converters for automobiles. Yet the Government has stockpiled just 35% of the amount of platinum that it believes the country needs to hold in reserve.

Administration officials now worry that the Soviet Union, which has large strategic minerals resources, plans to reduce exports and step up purchases on the world market in competition with the West. That could endanger U.S. supplies of chromium and platinum, for example. A study by Dr. Daniel Fine of the Massachusetts Institute of Technology's Mining and Minerals Research Institute concluded last year that the Soviet Union is becoming a net purchaser of key minerals as a way of protecting its own reserves. Said Interior Secretary James Watt: "Our dependence on foreign supplies jeopardizes our defense posture. We think we are really confronted with the possibility of a resource war."

Rebuilding the stockpile, however, is likely to run into some serious foreign policy complications. The U.S. has become dependent on the countries of southern Africa for seven key materials (platinum metals, manganese, chromium, cobalt, industrial diamonds, fluorspar and antimony). The U.S. gets 53% of its platinum from white-ruled South Africa, for example, and 42% of its cobalt from black-run Zaire. A pronounced policy tilt toward either country could antagonize the other and thus endanger supplies.

Secretary Watt, who heads a new Cabinet-level council on natural resources and environment, told the Senate energy and mineral resources subcommittee that the U.S. must increase the levels of the strategic stockpile, and also urged more exploration for minerals on federal lands. Said Watt: "The best answer to long-term minerals availability is domestic production." Environmental concerns have often blocked mining in the past.

The Government hopes to help finance a bigger strategic stockpile by selling off $6 billion in excess supplies of some minerals, including silver, tin and tungsten. But with the total cost of rebuilding America's strategic storehouse put at $20 billion, the process could be long. At the current pace the job will not be completed until about 2041.

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