The recent trade war between the United States and China has brought to light a long-standing issue that has been brewing for years – the rare earths crisis. While many may be surprised by the sudden urgency of the situation, the truth is that this crisis was always going to arrive eventually. What is truly shocking is how little we have done to prepare for it.
Rare earths are a group of 17 elements that are essential for the production of high-tech products such as smartphones, electric cars, and military equipment. Despite their name, these elements are not actually rare in terms of abundance in the earth’s crust. However, they are difficult and expensive to extract and refine, making them a valuable commodity in the global market.
For decades, China has dominated the rare earths market, producing over 80% of the world’s supply. This has given them a significant advantage in trade negotiations and has allowed them to control the supply and prices of these essential elements. However, the recent trade tensions between the US and China have highlighted the vulnerability of the US and other countries that rely heavily on Chinese rare earths.
In May 2019, China threatened to restrict its rare earths exports to the US as a retaliatory measure in the trade war. This sent shockwaves through the global market, causing prices to soar and raising concerns about the future availability of these critical elements. The US, in particular, was caught off guard, as it relies heavily on Chinese rare earths for its defense and technology industries.
But this crisis did not happen overnight. It has been building for years, and the signs were there for all to see. China’s dominance in the rare earths market was a cause for concern, yet little was done to address it. The US and other countries failed to invest in developing their own rare earths production capabilities, instead relying on China’s cheap supply.
Furthermore, China has been tightening its grip on the rare earths market for years, implementing export quotas and restrictions to drive up prices and control supply. This has left the US and other countries vulnerable to any disruptions in the supply chain, as we are now seeing with the trade war.
The lack of action and preparation by the US and other countries is a wake-up call. It is a reminder that we cannot continue to rely on China for our essential resources. We must take steps to diversify our supply chain and reduce our dependence on one country. This is not only crucial for our economic stability but also for our national security.
Fortunately, steps are being taken to address this crisis. The US has recently announced plans to develop its own rare earths production capabilities, with companies like MP Materials and Lynas Corp investing in new mines and processing facilities. Other countries, such as Australia and Canada, are also ramping up their rare earths production to reduce their reliance on China.
But this is just the beginning. More needs to be done to ensure a stable and sustainable supply of rare earths. Governments and companies must work together to develop new technologies for extracting and refining these elements, as well as investing in recycling and reusing them to reduce our demand for new production.
The rare earths crisis has been a long time coming, and it is a wake-up call for all of us. We cannot afford to be caught off guard again. We must take action now to secure our access to these critical elements and reduce our dependence on one country. The future of our economy and national security depends on it.
In conclusion, the rare earths crisis was not a surprise, but rather a result of our failure to prepare. It is time for us to learn from our mistakes and take the necessary steps to secure our access to these essential elements. Let us use this crisis as an opportunity to invest in our own rare earths production capabilities and reduce our reliance on China. Only then can we truly be prepared for any future challenges that may arise.
