The US trade war with China exposed Americans' critical dependence on Chinese rare earth. Beijing can wipe out the entire Hi-Tech industry in the United States with a snap of its fingers. Washington hastily began to encourage the development of its own metals industry. How are the US attempts to get rid of Chinese dependence and protect national security progressing?
Until China decided to strike the entire US technological sector in revenge for the same Huawei and trade wars, the Trump administration decided to encourage the development of the domestic rare earth metals (REM) industry, on which the country's national security depends.
Rare earth metals are found in every phone, in every car, in every plane. Actually, all the products of Apple and Elon Musk's companies (both automotive and space) contain a huge amount of rare earth metals. Wind turbines and military equipment are impossible without them. The dependence of the American Hi-Tech industry and the defense industry on Chinese metals is colossal. China annually produces about 105 thousand tons of rare-earth metals, which is about 81% of the world's production.
The Pentagon has already allocated at least $125 million for rare earth projects this year, The New York Times learned. Another 160 million dollars this year will be spent by the Ministry of Energy of the country on research and development in the field of rare earth elements.
Last month, the Pentagon enacted defense production laws to give nearly $30 million to the 25-person Urban Mining Company in Texas. The firm said it can produce finished rare earth products by recycling electronic components found in scrap metal. In addition, a bill is being considered, according to which the Pentagon should annually allocate $50 million to finance rare earth projects until 2024, plus provide tax incentives to companies in this area.
The creation of the entire REM production chain in the United States is an extremely ambitious business. And the Americans are doing very badly to develop the industry. The fight for a new market, which the Pentagon is ready to support with the dollar, has embarked on companies that have absolutely no experience either in the extraction or processing of rare earth elements. And this process is much more complicated and dangerous than the extraction of simple coal.
First, each new mine must obtain an environmental permit due to the radioactivity of the ore waste, which requires safe disposal. Secondly, the separation and marketing of such metals require some technical knowledge.
Creating separation cascades, setting up high-quality work with waste, primarily with radioactive waste with their subsequent neutralization вЂ” this is something that has not been done in a couple of years. To start delivering to the market at least those volumes that are needed by the domestic American market, it is necessary to work without interruption for at least 5 years with modern and environmentally-friendly equipment.
So far, the United States has only one active rare earth mine in Mountain Pass, California. Its capacity is not even close to the United States, moreover, it is an old mine. Moreover, the mined ores are sent to China for processing. There are plans to extract ore at deposits in Alaska, Texas, and Wyoming. Three companies have been operating here for several years, but the only thing they have done so far is to develop websites. None of them started work in the ground, much fewer work metals.
The Australian company Lynas Corporation, which extracts ore at a mine in Australia, tried to help the Americans with an ambitious task. She hoped to establish a partnership with a processing company in Texas. However, prominent Senator Ted Cruz, a Texas Republican, complained to the Secretary of Defense. In his opinion, it is useless to help an Australian company fuel the American market: the Pentagon should financially reward only those companies that develop the entire production cycle within the United States.