Experts say that the United States is waiting for growing competition with China

Washington, December 23 – The United States will find itself in a difficult situation in the near future due to attempts to reduce dependence on China for the supply of rare earth elements, which the US administration considers a threat to national security, according to experts interviewed by RIA. Novosti.

According to their estimates, the main reason for the upcoming difficulties is the lack of the necessary capabilities and technologies in the United States, which the PRC has been working on for more than three decades.

As Marina Chang, associate professor at the Institute of Australia-China Relations at the University of Technology Sydney, explains, Beijing’s leadership in this area will not be easy to beat.

“China has clear structural advantages over its competitors over the next 10 to 15 years. These advantages include lower costs for obtaining mining and production permits and licenses, as well as relatively lower labor and environmental costs,” she said. .

The USGS has listed 16 rare earth elements as one of the 50 substances important to the economy and national security. In September, the Commerce Department, in turn, said that the US’s dependence on China for the supply of neodymium magnets, which consist of an alloy of the rare earth neodymium metal with boron and iron, also threatens national security, but it did not review the import. definitions. Neodymium magnets are used in guidance, including in missile projectiles and electric vehicles.

China will continue to dominate the US market

Today, China maintains a dominant position in all 17 currently existing rare earth elements that are used in the technology, defense, energy, and automotive sectors.

According to Zhang, China’s advantages in accumulated talents and patents allow it to control 90% of the entire production of rare earth metals. Moreover, according to US estimates, the demand for a number of them will grow by more than 400% in the next two decades, including through the development of green technologies.

There is currently only one rare earth mining operation in the United States, owned by the US company MP Materials. However, the mined rare earth oxides are sent to China entirely for further processing.

In early December, the State Department announced Washington’s intention to finance dozens more foreign projects in the field of rare earth mining, recognizing the “growing” growing need for the mineral. The money is expected to go towards partnership programs with Australia, the European Union, Canada and Japan.

At the same time, in the United States itself, the authorities have invested at least $ 200 million in expanding domestic production, MP Materials has raised $ 35 million to set up a full cycle of production of neodymium magnets at a plant in Texas by the end of 2023.

However, Zhang estimates that even if MP Materials succeeds, the US will still rely on two key rare-earth elements, terbium and dysprosium, to make the magnets resistant to high temperatures.

“Standard neodymium magnets without terbium and dysprosium cannot be used at high temperatures, such as electric vehicle motors, wind turbines, elevators, industrial robots and advanced weapon systems,” she said, noting that China is still the world’s only source of continuous supply. Heat resistant neodymium magnet.

At the same time, the expert noted that obtaining permits for the development of new deposits in the United States may exceed 10 years, which limits opportunities for production growth at the same time as the divergence in the reserves of the active MP material mine in California. 2.1 million tons of rare earths against reserves of 44 million tons in China.

“China will not stand by while competitors catch up. It continues to use its industrial policy to support both public and private companies to strengthen the entire rare earth supply chain,” Zhang stresses.

On the verge of a trade war

In addition to the metals themselves, the United States seeks to reduce its dependence on China for microchips while limiting exports to China of semiconductor technologies previously provided by the US Department of Commerce. This decision may lead to a trade war between countries and an increase in the shortage of modern semiconductors for the US industry, including the defense sector.

According to Sunita Raju, a professor at the Institute of International Trade in New Delhi (India), China could use its dominance in the global market for rare earth metals, also used in chips, as a weapon in a trade war with the United States. .

“If China weaponizes rare earth materials that are used in the production of chips, the conflict will take a terrible turn,” she said.

“Advocating self-sufficiency and ‘bolstering’ key players will not only slow down technological development, but also drive up costs,” adds the professor.

In addition to the economic fallout, the worsening economic animosity between Beijing and Washington poses a threat to US defense. Earlier, the Pentagon temporarily suspended the supply of fifth-generation F-35 fighters after it became known that a Chinese-made rare earth magnet was used in one of the engine parts.

In October, the US Department of Defense authorized F-35 manufacturer Lockheed Martin to continue delivering the fighter jets by looking for alternative suppliers. US congressmen also intend to support the agency and in December introduced a bill to invest $1 billion to ensure the Pentagon’s independence from China regarding rare earth materials by 2027.

At the same time, according to Michael O’Hanlon, a member of the US Department of Defense Policy Council, Washington is not at all interested in complete independence from China.

“For us, it’s not so important to separate from China in commodities. I just don’t want to have exclusive supplies from China,” he told the News Agency, citing the need to reduce dependence on components from China.