The United States is ramping up its efforts to secure a stable supply of rare earth elements, even as it benefits from a temporary pause in trade retaliation from China. Despite the current reprieve, the Trump administration is pushing forward with initiatives to reduce dependence on China, a nation that holds a significant monopoly over the rare earth market. The Hong Kong-based South China Morning Post (SCMP) reported on November 11th that the US is actively engaging with countries possessing rare earth deposits to diversify its supply chain and diminish China's leverage.
In a recent strategic move, President Donald Trump has forged agreements with Uzbekistan and Australia, following discussions with leaders from five Central Asian countries. The US and Uzbekistan have pledged to invest up to $400 million to bolster the supply chain of critical minerals and rare earths, enhancing American companies' access to these vital resources. Additionally, Cove Capital, a joint US-Australian mining venture, has partnered with Kazakhstan's national mining company to develop one of the world's largest undeveloped tungsten resources, marking a significant investment in Central Asian rare earth deposits.
The administration's strategy includes a comprehensive approach to resource cooperation beyond China's borders. President Trump's recent summit with Australian Prime Minister Anthony Albanese culminated in the signing of the 'US-Australia Framework for Securing Stable Supply Chains of Critical Minerals and Rare Earths.' This framework aims to counter China's weaponization of rare earths and diversify supply sources, thereby reducing the US's vulnerability to supply disruptions.
The US Geological Survey's recent expansion of its critical minerals list, which now includes copper and silver among a total of 60 minerals, underscores the government's commitment to securing a diverse and stable supply chain. This move is part of a broader effort to strengthen the management of critical mineral resources, ensuring that the US remains resilient in the face of potential Chinese export controls.
China's control over the rare earth market, producing 70% of the world's rare earth mining output and 90% of processed products, has been a significant point of leverage. The Asian giant has previously used its dominance to pressure the US, as evidenced by its imposition of export controls on several rare earth elements. Despite the current agreement between the two nations, which provides a temporary reprieve from such measures, the US is preparing for potential future challenges.
Dexter Roberts, a senior fellow at the Atlantic Council, highlights the US's proactive stance in seeking alternatives, anticipating that China may use the rare earth issue as a bargaining chip again. Victor Gao, vice president of the Beijing-based Center for China and Globalization, acknowledges the US's determination to break free from China's grip, noting that the US is exploring opportunities with any country possessing rare earth deposits.
As the US continues to strengthen its position in the global rare earth market, it remains vigilant in diversifying its sources and reducing dependency on China. This strategic shift not only aims to secure a stable supply of critical minerals but also positions the US to better withstand potential geopolitical tensions in the future.
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