Over the past few decades, the US-China relationship has evolved into more of a rivalry than anything else. This has left the United States eager to decouple from China on several critical issues. One such issue is the supply of rare earths. After all, China refines almost 90% of the world’s rare earths. Moreover, the country is responsible for more than 50% of RE mining, as per figures given by International Energy Agency.
A New Initiative to Shore up RE Supply Chains With Rare Earths
The US currently relies on two nations for its rare earth needs: China and Russia. We all know where the country stands vis-à-vis Russia. Fortunately, China remains on the US’ “friendlies” list – for now. Still, the Pentagon, the State Energy Department, and other organizations are expressing concerns about what would happen to the RE supply chain if China and the US ever went to war.
The US’ national defense stockpile includes minerals like titanium, tungsten, and lithium, to name a few. However, it still relies heavily on trade with China to keep the supply of these vital minerals rolling. It’s far from an ideal situation, but a new initiative might provide some much-needed security.
Just a few days ago, the State Department announced that the US and some key partner countries had established the Minerals Security Partnership (MSP). Put simply: the MSP is an “ambitious” initiative to bolster critical mineral supply chains.
Incidentally, the announcement was made in Toronto, Canada, during the Prospectors and Developers Association of Canada convention. Many might recognize this as the largest such mining event in the world. This implies that the State Department planned the news release to maximize impact.
Emission Reduction is Also Part of the Plan
The other MSP partners include Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, the UK, and the European Commission. According to the State Department release, the new partnership will aim to help “catalyze investment from governments and the private sector for strategic opportunities…that adhere to the highest environmental, social, and governance standards.”
In a report by Reuters, Jose Fernandez, the Under Secretary for economic growth, energy, and the environment at the State Department, was quoted as saying huge amounts of these minerals are needed to meet the US’ emissions reduction goals.
While neighboring Canada sits on large nickel and cobalt deposits, the US does not. Fortunately, the newly struck MSP should help resolve the issue.
So this renewed commitment to building a “robust, responsible critical mineral supply chain” seems strategically planned. Indeed, the statement came just a few days before NATO announced plans to adopt a new “Strategic Concept” for the coming decade at its summit in Madrid later this month.
Some Cheer for the United States
Fortunately, there was some good news on the US rare earths front this week. American Rare Earths Limited announced that its recent exploration drilling at its La Paz property in Arizona had shown some encouraging results. The organization said it had dug nine exploratory holes in April this year, and a preliminary study of the samples showed rare earth mineralization in most of the excavations.
The US Department of Defense also signed a US $120 million deal with Australia’s Lynas Rare Earths. This was to build one of its first domestic heavy rare earths separation facilities. A report in the Financial Times stated that Perth-based Lynas would export heavy rare earth carbonate. The resources would be mined and refined in Australia. Then, these commodities will ship to the US. where the individual elements would be separated for commercial use.
It also just so happens that Lynas remains the world’s largest rare earths producer outside of China.
By AG Metal Miner
More Top Reads From Oilprice.com:
- Europe Faces “Red Alert” For Gas Supply As Russia Reduces Flows
- Russia’s War Is Elevating Cybersecurity Concerns For Emerging Markets
- Kazakhstan Speaks Out Against Russia Over Ukraine War