China’s monopoly on rare earth minerals is a danger to the United States. Newly proposed legislation, however, seeks to circumvent that threat.
The COVID-19 pandemic has laid bare how dependent the U.S. is on Chinese manufacturing and goods, including what are termed “rare earths,” a group of metals used to make magnets found in electronics, weaponry, and vehicles.
Indeed, REs are an essential component of the tools that the U.S. military needs to wage war. As importantly, they are an essential component in our country’s domestic infrastructure, underwriting essential technology in healthcare, food supply, telecommunications — an endless list that post-pandemic America can no longer take for granted.
China produces or controls more than 70% of the world’s mined REs and refines more than 80%. According to one analysis, “China and Chinese controlled enterprises produce more than 99% of all so-called new REs metals.” That gives Beijing control over an increasingly important sector of the world’s economy — and tremendous leverage to exert its will.
China has shown a willingness to use economic coercion to bend other nations or corporations to its whim. From Disney to Lithuania, examples abound of the Chinese state using its industrial capacity to blackmail others. Whether it would concern a conflict over Taiwan or an effort to prevent the U.S. Congress from passing legislation regarding Beijing’s treatment of minorities, China’s dominance in the RE sector gives Beijing a potential stranglehold over the U.S. and its allies.
The U.S. has been slow to appreciate the dangers posed by China’s control. In December 2017, however, the Trump administration issued an executive order, Executive Order 13953, which called on the secretary of the interior to identify critical minerals and “to reduce the Nation’s vulnerability to disruptions in the supply of critical minerals.” Subsequently, the U.S. identified 35 minerals that were “essential to the economic and national security of the United States.”
In September 2020, the Trump administration issued another executive order amounting to an “all hands on deck call,” in the words of analysts Jamil Hijazi and James Kennedy. And in February 2021, the Biden administration issued its own executive order directing federal agencies to assess supply chain risks in key sectors, including REs.
Recognition of the threat posed by China’s chokehold on REs is bipartisan, as is newly introduced legislation.
On Jan. 14, 2022, Sens. Tom Cotton, an Arkansas Republican, and Mark Kelly, an Arizona Democrat, introduced the Restoring Essential Energy and Security Holdings Onshore for Rare Earths (REEShore) Act, which seeks to “protect America from the threat of rare earth supply disruptions, encourage domestic production of these elements, and reduce our reliance on China.” The bill would mandate that the Department of Defense and Department of the Interior create a strategic reserve of RE elements and products by 2025. It also requires DOD contractors to track and disclose the REs used in systems that are delivered to the U.S. military and would prohibit Chinese REs from being used in “sensitive” DOD systems by 2026.
The U.S. must fight back against China’s dominance in REs. It can’t afford to do otherwise.
The writer is a Washington, D.C.-based foreign affairs analyst and a consultant for COMSovereign Holding Corp., a company seeking to restore U.S. telecommunications capabilities. COMSovereign Holding Corp.’s CEO has spoken against China’s RE metal influence. Durns’s views are his own.
