The United States has been working for years to reduce its dependence on China for rare earths, a group of seventeen elements essential for the electronics, energy, and defense sectors: rare earths are found inside computers and smartphones, wind turbines and electric cars, but also military drones, Tomahawk missiles, and F-35 fighter jets.
The two most widely used rare earth elements are neodymium and praseodymium: they are used to make so-called “permanent” magnets – much more powerful than traditional ones – for wind turbines and electric vehicles. The magnets needed for the defense sector, on the other hand, are made of samarium.
HOW THE AMERICAN PATH TOWARD INDEPENDENCE FROM CHINA IS PROGRESSING
In 2017, when Donald Trump’s first presidency began, the United States accounted for 3 percent of global rare earth production; today their share is significantly higher, at 13 percent, but autonomy from China remains a distant goal.
In July of last year, Ramaco Resources opened the Brook rare earth mine in Wyoming: it is the first on American soil in over seventy years and the second overall after the Mountain Pass mine in California, managed by Mp Materials. The Brook mine, however, has not yet started production; other sites are also under development in the states of Wyoming, Montana, and Nebraska.
In recent months, the American government has become a shareholder in Mp Materials and another rare earth specialized company, Usa Rare Earth. Moreover, in April, Usa Rare Earth announced the acquisition of the Serra Verde group, which is developing a heavy rare earth mine (a particularly critical subgroup) in Brazil.
RARE EARTH MINES ARE NOT ENOUGH
However, mines alone will not be enough to free the United States from Chinese dependence and from the influence that Beijing exerts on the global rare earth market through price manipulation and export restrictions. The most critical phase of the supply chain is not the extraction one, but the separation and refining phase because it is directly connected to industrial applications: factories do not use the raw mineral extracted from the ground, but neodymium or samarium already “processed”.
China controls this link of the supply chain with an 80-90 percent share of the global total. The United States does not have refining capacity capable of meeting its needs, but it is making progress. For example, Mp Materials has announced that it will soon start rare earth separation processes at the Mountain Pass site. In January, Energy Fuels acquired the Australian company Asm and said it intends to build a separation plant on American soil. Usa Rare Earth has invested in the French company Carester and is collaborating with it on separation activities.
Then there are companies that manufacture permanent magnets from rare earths, thus positioning themselves at the end of the supply chain: Vulcan Elements and eVac Magnetics started magnet production last year and Mp Materials is expected to do the same shortly. However, to truly challenge China’s market power, these companies would need to achieve large economies of scale.
THE IMPACT OF THE WAR ON IRAN
The Payne Institute for Public Policy estimates that since the start of the war on Iran on February 28, the United States has launched thousands of missiles at Iranian targets. Considering that every Tomahawk and Patriot missile contains hundreds of grams of rare earths, developing a national supply chain for these elements is also crucial from the perspective of replenishing the military arsenal.
“The conflict in the Middle East is highlighting in real time which minerals are truly critical and exactly where supply chains could break under pressure,” Mahnaz Khan of the Silverado Policy Accelerator think tank explained to the Afp agency.
