The Pentagon wants the United States to end its reliance on China for rare earth minerals, recently proposing legislation to Congress that would allow the government to mine more of those resources itself.
Rare earth minerals are a key part in the production of the U.S. military’s munitions. The proposed legislation, offered to Congress earlier this month, would raise the spending limits by the U.S. government under the Defense Production Act (DPA).
It would allow the U.S. government to spend up to $1.75 billion on rare earth elements for munitions and missiles $350 million for microelectronics, and eliminate spending caps for hypersonic weapons, Defense News reports. The Pentagon can only invest $50 million in DPA funds without congressional notification under current law. The bill is being offered to be included in the annual defense policy bill Congress has been drafting.
“To me, this is the biggest thing that has happened to rare earths in a decade,” said defense industry consultant and advocate for government intervention on rare earth materials, Jeffrey Green, on Monday. “The policy shift is the government is realizing they have to put serious bucks into this.”
The U.S. government awarded the Lynas Corporation, Australian rare-earths mining company, and Blue Line, a U.S.-based rare earths processor, a contract for heavy rare earth separation. The process for separating rare earth oxides can cost hundreds of millions of dollars, according to Green.
“We are delighted to be selected for phase on by the DoD,” said Lynas chief executive and managing director Amanda Lacaze. “We have confidence in the strength of our proposal and in our ability to meet the conditions set by the DoD for the development of a successful heavy rare earths separation facility.”
“The recent awards are like a drop in the bucket, for very small scale pilot programs. It’s nowhere near what they’d need to get a commercial facility, even to support DoD’s very small volume,” Green said. “They have to put big dollars in if they want to separate the oxide at a state-of-the-art facility that’s going to be anywhere close to Chinese pricing.”
Tensions between the United States and China have risen dramatically recently, especially in the wake of the coronavirus pandemic, which originated in Wuhan, China. COVID-19, the disease caused by the coronavirus, has infected almost 5 million people globally, according to the latest tracking data from Johns Hopkins.
“China is currently the sole source or primary supplier for many chemicals required to make ingredients in missiles and munitions end items. In many cases, there is no other source for these foreign sourced materials and no drop-in alternatives are available,” the Pentagon’s proposal reads. “A sudden and catastrophic loss of supply due to restrictions from foreign suppliers, industrial accidents, natural disasters, or wartime damages would impact critical DoD programs for many years and severely disrupt DoD munitions, satellites, space launches, and other defense manufacturing programs.”
Undersecretary of Defense for Acquisition and Sustainment Ellen Lord said in August that the United States plans on Australia, a U.S. ally, processing a significant portion of rare earth materials for the U.S. military.
Lacaze said that the contract Lynas and Blue Line were awarded “creates the foundation for a facility in the United States that will assist the U.S. to avoid the supply chain vulnerability that has been exposed over the past year.”
Texas Republican Senator Ted Cruz has also proposed his own piece of legislation that aims to end the United States’ dependence on China for rare earth minerals.
“Our ability as a nation to manufacture defense technologies and support our military is dangerously dependent on our ability to access rare earth elements and critical minerals mined, refined, and manufactured almost exclusively in China,” Cruz said in a statement. “Much like the Chinese Communist Party has threatened to cut off the U.S. from life-saving medicines made in China, the Chinese Communist Party could also cut off our access to these materials, significantly threatening U.S. national security.”