US lobby warns Pentagon against further dependence on Chinese rare earths

The Strategic Materials Advisory Council, a US lobby group, has called the Department of Defense’s (DoD) decision to stockpile $120.43 million of heavy rare earth elements (HREEs) a “risky mitigation strategy” and urges “the creation and nurturing of a US-based  rare earth supply chain”, reported Resource Investing News earlier today.Rare earth metals are crucial to the production of a number high-tech and energy-related goods like smart phones, flat-screen TVs, drills, wind turbines, and electric cars.

And without heavy rare earths, fighter jets, drones, and most computer-controlled equipment would have to undertake a lengthy process of redevelopment.The council points out that the US has become far too dependent on China, which currently produces 90% of global rare earth metals.

Governments around the world have become increasingly attentive to rare earths as their strategic value has become clearer. In 2010, China stopped rare earth metal shipments to Japan for two months after a diplomatic row, which caused serious damage to Japan’s high-tech manufacturing.

The scare prompted the Japanese government to provide $500 million of subsidy to support the US domestic rare earth industry.

Rare earth miners in South Africa, Canada and Malaysia are also looking to make headway. Notably, Australia’s Lynas Corp. began production last November in its $800 million rare earth facility after a drawn out legal battle with local residents.

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Sources: Adam Currie of Resource Investing News; The Diplomat;