China Dominates Rare Earths Element
China dominates the global market for rare earth elements, producing 61% of total output in 2021. This is of concern to countries like the United States, which is trying to reduce its dependence on China as a strategic rival.
“There are choke points that we can’t control. If we don’t prioritize on-shoring this, then we are going to have weak points that don’t enable us to really defend ourselves.”
“There’s a high risk there because you are basically dependent on China for elements that you use in the manufacturing of your equipment, or even weapons and missiles.”
China has a significant advantage in terms of reserves, with an estimated 44 million tonnes compared to other countries like Vietnam, Brazil and India, which have half that amount, and the United States, which has only 1.8 million tonnes. Rare earth elements are critical for producing magnets and are used in a variety of industries, including the military, wind turbines and electric vehicles. The dependence on China for these elements has led to efforts to diversify production and increase domestic production in countries like the United States.
Moreno explained: “So the solution then is for the West generally to be more independent from China. It’s not so straightforward. It’s not like, oh, we’re going to mine more, [because] your whole supply chain is still dependent on China.”She expressed the hope that Biden will put more investment downstream, but “it has to be an effort of many, many countries … It’s not one country, one solution. It’s going to be several countries to build that supply chain for rare earths and other critical materials.”
