Commentary
As the Biden administration commits the nation to transitioning from gas-powered cars to electric vehicles (EVs), the United States needs 10 times the amount of rare earth metals than it currently has or can produce to meet that commitment—and that’s just for EVs.
While the additional demands for rare earth metals are necessary for manufacturing strategic military, communications, and guidance assets, the shortfall in the national supply of rare earth metals is untenable.
China Dominates the Rare Earth Metals Market
Today, China still holds a near monopoly on the supply and processing of rare earth metals worldwide. The United States is fully dependent on China—that is, the Chinese Communist Party (CCP)—for the rare earth metals needed to maintain and build strategic weapons to defend itself and its allies against adversaries. It’s no wonder that the Pentagon says the rare earth metal shortage in the United States is a matter of national security.This national security matter isn’t new or sudden, either. It’s been known for years. In fact, former President Donald Trump issued an executive order in October 2020 directing his cabinet to explore ways to eliminate the country’s rare earths dependency on China.
How did this absurd dependency on China for strategic rare earth metals come about?
It’s almost too embarrassing to discuss, but the facts are what they are.
The US Gave Its Monopoly to China
But it wasn’t always this way. In 1980, the United States produced virtually all of the world’s rare earth metals. Even up until the 1990s, according to some reports, the United States had the global monopoly on rare earth metals mining and processing, all through the Mountain Pass mining operation in California’s Mojave Desert. The rare earths were simply the natural byproduct of other mining operations for substances such as titanium, phosphate, and zircon. In fact, that one mine alone was the main supplier of rare earth metals in the world.
The Americans then gave it to the Chinese. This was accomplished by a couple of key events. For one, Molycorp, the largest rare earth mining and processing company in the United States, gradually transferred its industrial technology and assets to China because its CEO had Chinese business interests. When Molycorp declared bankruptcy, Chinese-related firm Neo Materials bought it out of bankruptcy.
Another factor was new environmental-driven laws that were unnecessarily linked to the nuclear fuel industry, which forced the cessation of mining operations. This prompted the United States to outsource the mining and processing to China, which had no such environmental restrictions.
The result is that the United States handed over the mining technology, intellectual property, and expertise to produce the strategically valuable metals to China. In other words, the United States voluntarily surrendered its global monopoly on rare earths production to a foreign country that is an ideological adversary and enabled it to become a strategic one. The consequences of this extend well beyond EVs and military weapons into the medical industry, emerging technologies, and, of course, jobs and critical supply chain vulnerabilities.
A History of Bad Decisions or ‘Intentional Mistakes’
Other mistakes—or losses—were also made. In 1995, for example, the U.S. Congress approved the sale of Magnequench, the sole U.S.-based producer of magnets critical for the nation’s most advanced guided missile systems. GA Powders, another U.S. producer of rare earth magnetic powders, was also sold.Magnequench was bought by none other than the family of former CCP leader Deng Xiaoping, now deceased. Seven years later, its U.S.-based manufacturing unit was shuttered and moved to China. That makes the United States fully dependent on China for the key magnets necessary for the functioning of U.S. missiles and other weapons, as well as wind turbines and other technology.
Then, in 1998, defense authorities decided that the United States didn’t need any of its strategic reserve of rare earths—including all rare earths previously held by the Energy Department—and sold them. In the same year, Rhodia Inc., the last U.S. producer of rare earth metals and alloys, closed its rare earth processing facility in Texas so it could build a new one in China.
The pattern regarding rare earth metals couldn’t be clearer. U.S. policymakers have been making decisions that not only damaged U.S. strategic readiness, technological medical advancements, and supply chains but also overtly helped China.
Today, China’s dominance in the global supply of rare earth metals makes up more than its approximately 80 percent share of raw materials. It also has a near monopoly on processing plants that turn the raw elements into critical alloys, magnets, and so forth.
As one would expect, China is leveraging its advantage over the United States. It has reduced the supply of rare earth metals to meet only its domestic needs, thereby ceasing all exports. Prices for some are expected to double within a few years. The bottom line is that Beijing’s new restrictions are intended to hobble U.S. defenses.
Good News, Bad News
What’s being done about this totally avoidable but strategic rare earth metals gap?The United States is moving in the right direction, at least in one instance. In 2022, the Defense Department gave MP Materials a $35 million contract to build a large-scale rare earth metals processing plant for use in high-performance magnets in the same Mountain Pass location as before. This contract complements MP Materials’ $700 million investment into various related projects in California and Texas.
On the negative side, the Biden administration has denied the Ambler Access Road project, which was approved by the Trump administration, on environmental grounds. The road would have helped expand mining operations, giving the United States a reliable domestic source of copper, zinc, lead, gold, silver, and cobalt. Interior Secretary Deb Haaland said the Trump-era environmental studies were “inadequate.”
Once again, U.S. rare earth metals policy damages the United States and helps communist China.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
