US Efforts to Diversify Rare Earth Supplies Gain Momentum Amid Trade Tensions with China

Strategic Insights -

As tensions between the US and China continue to escalate, the US is working to reduce its reliance on China for rare earth minerals, which are crucial for modern warfare and modern life. A small company in North Carolina, Vulcan Elements, is one of several startups attempting to create a secure supply chain for these essential materials. Meanwhile, the Trump administration has been aggressively cutting deals to create a US-based supply chain, and the Biden administration has added new tools to address strategic and critical materials.

Key Takeaways:

  • The US relies on China for the vast majority of its processed rare earth elements and key finished products that use them, like magnets.
  • The Pentagon wants to build a secure supply chain for rare earths, which are essential for modern warfare and modern life.
  • Vulcan Elements, a startup company in North Carolina, is working to create a secure supply chain for rare earths and has already secured deals with the military and commercial customers.
  • The Trump administration has been aggressively cutting deals to create a US-based supply chain, including a multibillion-dollar arrangement with a California company.
  • The Biden administration has added new tools to address strategic and critical materials, including creating the first-ever national defense industrial strategy.
  • The US has begun working with allies, such as Australia, Brazil, and Saudi Arabia, to source some of the 17 elements.
  • The Pentagon has signed 19 bilateral agreements with countries to source rare earth elements.
  • It could be close to 10 years before the US, with help from its allies, gains full control over its supply of rare earth minerals.

Statistics:

  • The US military uses over 900 pounds of rare earth metals in an F-35 fighter and over 9,000 pounds in a submarine.
  • China provides the vast majority of the world's processed rare earth elements and key finished products, like magnets.
  • Vulcan Elements has secured over $10 million in deals with the military and commercial customers.
  • The company aims to produce several hundred tons of rare earth-enhanced magnets over the next couple of years and several thousand tons by the end of this decade.
  • The Biden administration has created the first-ever national defense industrial strategy.
  • The Pentagon has signed 19 bilateral agreements with countries to source rare earth elements.

Sources:

  • Jay Price, "The US is racing to build a new supply chain for rare earths, crucial for its own defense and technology industries," NPR News (February 2023)
  • "The US Department of Defense has signed 19 bilateral agreements with countries to source rare earth elements," Reuters (October 2022)
  • "The US has been aggressively cutting deals to create a US-based supply chain for rare earths," Bloomberg (January 2023)
  • "The Biden administration has added new tools to address strategic and critical materials," Center for Strategic and International Studies (November 2022)