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REEs, National Security and Gateway Metals

A REE World Report titled ‘Political Squeeze Play and the Rare Earth Revolution’ on Rare Metal Blog highlights the implications of U.S. dependency on foreign supplies of Rare Earths for our military. Here are some of the report’s key points:

• The current WTO case brought on against China by the U.S., European Union and Japan over its restrictive Rare Earths policies is not because China has a geological monopoly, but rather, because other countries possessing REEs, including the U.S., have allowed China to develop a near-total production monopoly.

• It’s up- and downstream REE market dominance has prompted industries relying on Rare Earths to relocate production sites to China, and leaves the other parties to the WTO case, and the U.S. in particular, vulnerable to REE supply risk.

• To underscore the economic imbalance, the author of the report prompts readers to imagine the consequences for “Western economies if Saudi Arabia had been a technological and manufacturing giant at the time of the 1973 oil embargo” – which would have been control over energy supply and the world’s technological development. Even more troubling, while Saudi Arabia has been reliant on the projection of U.S. military power in the Gulf region, China has no such constraints and its foreign policy often clashes with Western interests.

• The importance of REEs cannot be underestimated, and China’s near total monopoly affects not only the green technology sector, but the defense and security sectors.

The author’s conclusion:

“A new approach is needed. Short of devolving tax dollars to developing alternative materials to REE, diversifying supplies while easing the mining regulatory framework to facilitate more domestic REE production is essential.”

The implications of mineral supply issues for our national security is an issue to which American Resources recently devoted a study.

In Reviewing Risk – Critical Metals and National Security, we cross-referenced 46 key minerals with U.S. Geological Survey reports on mineral reserves, supply risk and import exposure, and built a national security “risk pyramid” that helps visualize our over-reliance on foreign critical minerals.

The study is part of a series of reports and policy papers, the next one of which will take a closer look at one of the less-known properties of some traditional “mainstay metals” – their function as a “gateway metal” to critical technology metals.

Stay tuned for the announcement on the report’s release in the coming weeks.