Senate Mulls Banning Contractors From Buying Chinese Rare Earths

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A bill introduced in the Senate on Friday would ban defense contractors from buying rare earth minerals from China. It is part of a larger effort to reinvigorate rare earth extraction in the United States and create an alternative to China’s dominant supply chains.

The bill, officially known as the “Restoring Essential Energy and Security Holdings Onshore for Rare Earths Act of 2022,” was co-sponsored by Sens. Tom Cotton (R-AK) and Mark Kelly (D-AZ). If passed, it would require the Pentagon to create a stockpile of rare earth minerals for national security needs. Although it would not explicitly forbid defense contractors from using Chinese rare earths, it would block them from government contracts if they did not comply, effectively using the billions of dollars in government contracts the companies receive every year as leverage.

Rare earth metals are a series of heavy metals that are essential for technology development and production. They are primarily used to make high-grade magnets for the production of electronics, vehicles, and, critically, weaponry.

Although the United States first began the production and use of rare earths after World War II, China has come to dominate the trade over the past thirty years. As the United States currently imports roughly 80 percent of its rare earths from China, there are concerns that the United States’ dependency on China could pose a national security threat. 

China has used its dominance in the rare earths market as a geopolitical tool before. In 2010, China allegedly stopped exporting minerals to Japan in a successful effort to resolve a fishing dispute. Since then, Japan has attempted to diversify its supply chains in order to decrease its reliance on Beijing.

While China dominates the market, sources for the minerals outside of China do exist. After President Donald Trump’s unprompted attempt to buy Greenland from Denmark in 2019, his staffers justified it on the basis that the island was rich in rare earth metals that could be mined for profit.

At the same time, China has attempted to strengthen its hold on the market by consolidating several key producers within the “China Rare Earths Group,” a new minerals conglomerate. The conglomerate has indicated that it will pursue the development of additional mines in southern China, according to Chinese state media.

In remarks to Reuters, Cotton described the formation of an alternative supply chain for rare earth metals as “critical to building up the U.S. defense and technology sectors.” He suggested that the decision to allow China a monopoly was “simply a policy choice” that could be reversed with sufficient time and investment.

Trevor Filseth is a current and foreign affairs writer for the National Interest.

Image: Reuters.

National Interest source|articles

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