At RealClearWorld Jeffrey Wilson warns of the risks of a “rare earths trade war”:
Rare earth minerals have emerged as the latest front in the escalating US-China trade war. Nearly a decade after the Chinese government controversially suspended rare earth exports to Japan during the 2010 Senkaku dispute, similar threats are now being made if the bilateral trade dispute with the US deepens.
How prepared is the global economy for another deployment of the so-called “rare earths weapon�
Rare earths are an ideal instrument for economic coercion. They are an essential input into a wide range of high-technology products, across the electronics, petrochemical, renewable energy and defence sectors. As there are few economically-feasible substitutes for their use, any suspension to rare earth value chains would have a disastrous impact on an economy’s technological ecosystem.
China also possesses an extraordinary degree of market power. While not strictly a “monopolistâ€, in 2017 it produced an estimated 79% of the world’s rare earth oxides. By comparison, OPEC – a longstanding and sometimes-feared energy cartel – accounts for only 41% of global oil output. Outsized market power gives the Chinese government considerable scope to use rare earths as leverage in diplomatic disputes.
How long could the U. S. military continue operations if the supply of rare earths were disrupted? It’s a serious question. What in the heck do we have a military that can’t continue operations for?
This is entirely a self-inflicted wound. The U. S. used to be the world’s primary supplier of rare earths. We stopped due to environmental concerns and China’s illegal subsidies to its own industries. At the very least we should be producing enough to supply our military.
“This is entirely a self-inflicted wound…..”
Truer words have never been spoken. The Trump Admin shouldn’t wait on the idiot left. Just rectify this. If they don’t they are part of the problem.
There are innumerable environmental issues involved in this that must be addressed by judiciary over the next few decades. But progress will come.
There is bandaid in Strategic Material Reserve but agree that the main battle will be the unending court cases over opening the mines.
Rare earths aren’t rare.
“The rare earths are a relatively abundant group of 17 elements composed of scandium, yttrium, and the lanthanides.” ~ USGS
The Chinese dominate the market because of price. If the price rises because the Chinese restrict supply then other sources will come on line.
“Japan Discovered a Rare-Earth Mineral Deposit That Can Supply The World For Centuries Earlier this year, researchers found a deposit of rare-earth minerals off the coast of Japan that could supply the world for centuries, according to a study.”