US moves to boost domestic production of strategic minerals

The US House of Representatives launched a bipartisan caucus on Friday to focus on ways to increase domestic production of specialised minerals used to make missiles, cell phones and other high-tech equipment.

The Critical Materials Caucus is the latest effort by officials in Washington to blunt China’s prowess as the world’s largest producer or processor of rare earths, lithium, titanium and other niche but important minerals.

China hiked its mining quota for rare earth minerals by 6.1% in 2020 to a record annual high.

Representative Eric Swalwell, a California Democrat, and Representative Guy Reschenthaler, a Pennsylvania Republican, will chair the group, which was approved by the House Administration Committee’s leadership.

The Pentagon and a rising number of U.S. tech companies have grown concerned that China could cut off exports of the minerals to the US – which it did to Japan in 2010 – if relations between Beijing and Washington deteriorate further.

“All of us want to make sure America addresses this national security issue,” Swalwell told Reuters.

The US Department of Defense has resumed the funding for two projects to process rare earth minerals for military weapons after a review found the grants are in the best interest of the country. The Pentagon on April 22 awarded Australia’s Lynas Corp and privately held MP Materials funding for rare earths separation facilities in Texas and California, respectively.

Caucus members plan to initially focus on legislation Swalwell has introduced to permanently fund rare earths research at US Department of Energy laboratories.

China became the top global producer of many of these minerals only in recent decades. The rare earths industry began in the United States during World War Two as part of the Manhattan Project, but the technology gradually moved overseas to China.

“It is more important than ever for our nation to work towards achieving critical material independence,” said Reschenthaler.

The caucus will start in the House and could potentially expand to the US Senate, staffers said.

(With files from Reuters)