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U.S. Steps Up International Cooperation to Counter Chinese Resource Threat

Against the backdrop of mounting Chinese-American trade tensions, the United States is stepping up cooperative efforts with allies to reduce its reliance on Chinese supplies of Rare Earths.  

The most recent case in point – a partnership with Australia and Japan – includes the setting up of a separation facility in the U.S.

Reports the International Business Times: 

“The Australia-based corporation Lynas, which is the world’s only major rare earth producer outside China, has joined hands with Texas-based Blue Line to set up the facility in Texas. Operations are expected to begin in 2021.”

The move ties into the overall context of an unfolding tech war that has been lurking underneath the surface of the trade confrontation between the United States and China.  

As ARPN’s principal Dan McGroarty recently explained“The specter of using rare earths as an economic weapon makes clear that the current trade war between the U.S. and China is in fact one front in a larger tech war – a competition to see which country will dominate the 21st Century Technology Age.” 

With brinkmanship looming large on the REE and critical minerals front, the United States is finally taking  steps to adapt to the realities of 21st Century resource policies. 

In early June, the U.S. Department of Commerce released its Critical Minerals Strategy calling for “unprecedented action to ensure that the United States will not be cut off from these vital materials.” 

Also in June, the US state department and its Canadian and Australian counterparts announced that to ensure future supplies of materials needed for new energy technologies, including lithium, copper and cobalt, they will cooperate and “work to help countries discover and understand their mineral resources.”

And after weeks of Chinese threats that it could cut off U.S. access to the essential technology materials known as rare earths, the Trump Administration in July took a counter-action of its own invoking the 69-year old Defense Production Act to spur domestic REE development.

The latest partnership announcement between the United States, Australia and Japan ties into this overall realization that the materials science revolution requires a more comprehensive, strategic and concerted approach to resource policy than that pursued by the United States to date.

All of this is good news.  However, after decades of failing to prioritize mineral resource policy, big questions remain for the U.S., as McGroarty recently outlined:

“How will China respond to the new U.S. action?  And how quickly can the U.S. close the rare earths gap — with production today at zero, even as known U.S. rare earth resources exist — before China loses its leverage over materials the U.S. Government has deemed critical to ‘the national economy and national security?’”