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Is America’s National Security at Risk? Critical Shortage of Rare Earths

Daniel Kim Views  

Analysts predict that the US may not have enough rare earth and precious metals to maintain national security and the base of major industries.

Given China’s dominance in global rare earth production, trade disputes between the US and China could disrupt supply chains and affect manufacturing and environmental policies.

Business Insider reported on the 30th that there is a growing concern that the US’s shortage of rare earth reserves could potentially pose a significant risk.

Rare earth and precious metals are essential for various manufacturing sectors, including medical devices, transportation, petroleum, and electronic products.

These rare earths are also essential for producing military supplies such as fighter jets, submarines, missiles, and radars. Securing a supply of rare earths is considered crucial for industries and national security.

Business Insider reported that disruptions in the rare earth supply chain could negatively impact the US, and current stockpiles are already seen as insufficient.

Dei Gratia Minerals, a mineral consulting agency, recently released a report analyzing the US reserves of rare earth and precious metals, which are significantly below the benchmark.

The report suggests that the US should have ten times the current stockpile to prepare for potential conflicts. Antimony, bismuth, cobalt, niobium, and iridium are estimated to be facing the most severe shortages.

Dei Gratia Minerals recommended that the US Department of Defense and Congress transparently disclose these material stockpiles to raise awareness about securing a stable supply chain.

There are also concerns that the US is overly dependent on a few countries, including Japan and South Korea, for its supply chain. It is unclear whether it can secure stable supplies in the worst-case scenario, especially if excluding China.

The overall reserves of rare earths on earth are sufficient. The problem lies in identifying their locations and the lengthy process of building facilities to refine them.

China has long been a significant player in rare earth mining, overlooking environmental issues. China is currently responsible for a considerable portion of global supply, and some materials are exclusively produced in China.

The Biden administration is aware of this issue and is working to support domestic production of rare earths while pushing for supply chain severance policies in major industries with China.

However, it is nearly impossible to replace the volume imported from China due to profitability challenges and the need for time and labor.

The US Department of Defense aims to secure a sustainable supply chain for rare earths and precious metals by 2027, but this goal may be challenging.

Business Insider cited a report released by the US Congress last year stating that 88 types of key materials, including rare earths, are already facing supply shortages. When converted into monetary value, this amounts to approximately $14.83 billion.

Analysts suggest that the shortage of rare earths and precious metals could be a significant weakness in the Biden administration’s manufacturing and environmental policies. This is because rare earth and precious metals are used in large quantities in electric vehicles, batteries, solar and wind power products, etc.

If China implements trade retaliation measures to restrict the supply of rare earths and essential materials to the US, the supply chain could be severely disrupted.

The US government recently imposed high tariffs on Chinese products, including electric vehicles, batteries, semiconductors, and solar modules. It is also strengthening its technical regulations policy against Chinese semiconductor companies.

China is considering trade retaliation, and restricting exports of essential materials such as rare earths is consistently mentioned as a likely measure because it can effectively harm the US.

If China decides to reduce or cut off supplying rare earths and materials to the US, the impact on national security and various manufacturing industries would be substantial.

According to the Biden administration’s policy, South Korean companies building production facilities for electric vehicles, batteries, and solar modules in the US will inevitably have to consider the impact of trade disputes between the US and China.

Dei Gratia Minerals emphasized that the US political and government sectors need to respond proactively to the risk of shortage of key materials and prepare measures for conflict situations.

Daniel Kim
content@viewusglobal.com

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