As the world transitions to a future where electric vehicles and green infrastructure will be key to the global economy, most developed countries are extremely apprehensive of China’s monopoly in the worldwide rare earth metals industry. China has currently captured close to 90% of the global rare earth metal supply and plays an overwhelmingly significant role in virtually every step of the supply chain. This monopoly allows the eastern Asian nation to exert its agenda on a global scale and limit supplies of crucial minerals to countries that don’t toe the line.
With relations between China and the United States becoming more frigid by the day, American leaders have even more reason to eliminate the country’s reliance on China and build a domestic or alternative supply of rare earth elements. In early July, for instance, Beijing announced that it would restrict the export of germanium and gallium, two metals that are critical to the development of the high-speed semiconductor chips used in the military and in fiber optic cables.
To protect both the economy and national security, the U.S. will have to replace China as its primary supplier of rare earth elements as soon as possible.
First, American leaders will have to adopt an “all-of-the-above” attitude regarding rare earth element supply. As long as building up domestic production makes economic and geological sense, politics should be coupled with a sensible and prompt licensing process.
New mining operations in the U.S. can take up to a decade to go from prospecting to mining, time that the U.S. simply doesn’t have if it wishes to end its reliance on China right away. This approach could include developing local supply and partnering with organizations such as the Mineral Security Partnership to secure supplies from friendly nations — and even African nations that have massive reserves of rare earth elements.
Second, the U.S. and its allies will have to keep investing in new ventures that have the potential to bolster their supply of REE and move them away from China. America and other nations might do this by developing novel technologies to skip the processing stage monopolized by Chinese firms or investing in new sources of REE outside the Chinese ecosystem.
The 2022 Inflation Reduction Act is already providing credits for companies that invest in local REE production and similar laws and programs could accelerate the development of local supply even further.
Finally, the U.S. and like-minded allies should consider entering off-take agreements with alternative suppliers to ensure their supply chains remain stable in the long term.
China’s current monopoly gives it the ability to significantly disrupt supply chains in the U.S. by limiting the export of certain rare earth elements. Off-take agreements and incentives will give new mining operations the ability to compete with major exporting nations such as China and allow the U.S. to secure its alternative supply of rare earth elements decades into the future.
As more enterprises such as Ucore Rare Metals Inc. (TSX.V: UCU) (OTCQX: UURAF) ramp up their operations, North America could soon have reliable supply chains to gradually wean the region off the stranglehold that China has in the REE market.
NOTE TO INVESTORS: The latest news and updates relating to Ucore Rare Metals Inc. (TSX.V: UCU) (OTCQX: UURAF) are available in the company’s newsroom at http://ibn.fm/UURAF
About MiningNewsWire
MiningNewsWire (MNW) is a specialized communications platform focused on developments and opportunities in the global resources sector. The company provides (1) access to a network of wire services via NetworkWire to reach all target markets, industries and demographics in the most effective manner possible, (2) article and editorial syndication to 5,000+ news outlets (3), enhanced press release services to ensure maximum impact, (4) social media distribution via the Investor Brand Network (IBN) to millions of social media followers, and (5) a full array of corporate communications solutions. As a multifaceted organization with an extensive team of contributing journalists and writers, MNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. By cutting through the overload of information in today’s market, MNW brings its clients unparalleled visibility, recognition and brand awareness. MNW is where news, content and information converge.
To receive SMS text alerts from MiningNewsWire, text “BigHole” to 844-397-5787 (U.S. Mobile Phones Only)
For more information, please visit https://www.miningnewswire.com
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.miningnewswire.com/Disclaimer
MiningNewsWire
Los Angeles, California
www.miningnewswire.com
310.299.1717 Office
[email protected]
MiningNewsWire is part of the InvestorBrandNetwork.