Rare Earth Elements: Geopolitical Implications and Challenges for US National Security

Earth mining picture
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Rare Earth Elements (REEs) are 17 elements, ranging from Lanthanum to Lutetium (lanthanides), as well as Yttrium and Scandium which share physical and chemical properties with the lanthanides. REEs have received increasing attention from academics and the media due to their widespread application in modern technology, and due to China’s monopoly on their production and supply. Given that one of the most important geopolitical questions of the 21st century regards the direction of the US-China relationship, it is important to address the geopolitical implications of China’s monopoly on REEs and what this means for US national security. Ultimately, the US and its allies need to take a “more serious geopolitical approach to REEs” and find alternative sources to reduce dependency on China.

Properties and Uses

The mining production of REEs has increased from around 80,000 tons in 1995 to 214,000 tons in 2019, highlighting the importance of them to modern society. REEs have many valuable properties like high electrical conductivity and strong magnetism which makes them essential for low carbon technologies. They are used to create the permanent magnets used in offshore wind turbines and are vital for creating electric vehicle batteries and motors. China and the USA have pledged to be carbon neutral by 2060 and 2050 respectively. As the world undergoes a green energy transition, the global demand for rare earths is increasing, emphasizing the need to reassess the supply chain and China’s current monopoly, especially if the US is to reach such a target.  Furthermore, REEs are critical to the production of military technologies. Colonel Charles J. Butler argues in a paper that, “essential components in US weapons systems would be difficult if not impossible to produce without them.” For example, Yttrium and Neodymium are required to make precision-guided weapons, lasers, satellites, and radar systems.

China’s Monopoly

Global reserves of REEs are estimated to be around 120 million metric tons of which China leads with reserves of roughly 44 million metric tons. Although other nations have rare earth reserves, China is the preeminent producer and exporter of REEs. As China’s previous leader Deng Xiaoping famously reported: “The Middle East has oil and China has rare earths.” The US used to be the leading global producer of rare earths until the mid-1980s when China’s monopoly developed due to economic growth which demanded a higher supply of REEs. China created a competitive advantage by capitalizing on large reserves, employing cheap labor and low environmental standards. Subsequently, the Mountain Pass Mine in California, which used to be the world’s biggest producer of REEs, closed down due to the inability to compete with such standards. The Mine is now operating again but is partly owned by Shenghe resources, a Chinese company that sends the material to China for processing, emphasizing the extent of China’s dominance.

In 2010 China possessed 97 percent of rare earth production capacity. Although this has decreased to about 58 percent due to countries beginning to diversify and China addressing sustainability issues, for certain key heavy REEs like Terbium and Dysprosium, China holds over 98 percent of global reserves. Furthermore, they have a monopoly on the separation processes of REEs and the final production stages, whilst the US has no processing facilities. An incident with Japan in 2010 demonstrates the danger of depending on China and their willingness to use REEs as geopolitical leverage. Japanese coast guard vessels tried to prevent China’s illegal fishing in Japanese waters around the Diaoyutai/Senaku islands in the East China Sea, ramming the Chinese boat and creating political tension between the two nations. This territorial crisis led to China temporarily suspending REE exports to Japan and the same week Chinese officials announced that some REE shipments had also been halted to the US and Europe. Additionally, when the Trump administration threatened to cut processing supplies to the Chinese company Huawei in 2019, Beijing threatened to cut off REE supplies to the US. These events demonstrate China’s ability and willingness to use REEs as a “political bargaining tool.” 

Implications for US National Security

As previously mentioned, REEs are required in the production of military technologies like precision-guided munitions and communication systems. A system like the Aegis Spy-1 Radar system requires its magnets replacing about every 30 years, emphasizing the importance of having continuous and reliable access to REEs. The fact that weapons systems rely on REEs puts the US at a significant disadvantage to China in any future conflict such as one between the US and its allies and China over Taiwan and the South China Sea. If a prolonged conflict was to occur “the United States may find itself squeezed to obtain sufficient supplies of rare earths to manufacture replacement parts or systems to remain engaged in the fight.” Although several recent Congressional sessions have seen the proposal of legislation addressing reliable access to REEs, little has actually made it into legislation apart from the 2017 ‘1407 Materials Essential to American Leadership and Security Act’ which calls for an increase in domestic development. However, this is not a substantial enough solution and the US must engage in a more serious approach to prevent any strategic disadvantages they currently have from affecting their ability to perform in a future conflict.

Solutions for Reducing Dependence on China

There are various ways that the US and other Western nations can reduce their dependence on China for REEs. The US should follow the example of Japan which began investing in recycling processes following the 2010 territorial crisis, developing technology that helps to extract REEs from permanent magnets, and investing in global REE projects and research, cutting their supplies from China by 32 percent since 2010. Increasing domestic production is one of the most important solutions. The US contains 1,500,000 metric tons of rare earth reserves meaning that they have the capacity to become a major supplier. However, creating rare earth mining projects outside of China must be accompanied by efforts to develop processing facilities and access to end products in the supply chain. Although government support is starting to increase, as seen with Trump’s 800-million-dollar package to fund rare earth research and the Biden administration claiming they will review the supply chain to protect US interests, more must be done to increase reliable access to rare earth reserves and the US must formally commit to such measures.

With the global population predicted to grow to nine billion by 2050 and the planet’s temperature rising, competition over natural resources is exponentially increasing, especially over REEs which are considered “the materials of the future.” Although China’s monopoly has decreased since the early 2000s, they still have a significant stranglehold over the global production of REEs and the ability to withhold exports. The US must plan strategically by starting to invest more state resources into REE developments and processing facilities to gain resource independence. This is essential for transitioning to a low carbon economy, and because a lack of access to REEs may result in “significant adverse economic, military, and political implications for the US and its allies”. Hence, a more responsible state strategy towards REEs is necessary for US national security as the security of nations increasingly depends on the securitization of natural resources.

Molly Adams is a Master’s student studying geopolitics, territory and security at King’s College London. Her academic interests range from the geopolitics of natural resource disputes to the links between global politics, technology and security. The views and opinions expressed in this article are those of the author.