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Indo-Pacific partners diversify supply chains for rare earth minerals

Joseph Hammond

The United States and its Indo-Pacific partners are taking action to circumvent the monopolistic practices of the People’s Republic of China (PRC) in supplying rare earth minerals. Vital to defense technology, rare earth minerals account for more than 400 kilograms of component material in each F-35 Lightning II aircraft, making their supply a major security concern.

The PRC supplies over 70% of rare earth minerals globally, according to the Center for Strategic and International Studies, a Washington, D.C.-based think tank.

“China became the only country to develop an integrated rare earths supply chain, from mining and processing of rare earths through to manufacture of finished products,” said Dave Woodall, managing director of Australian Strategic Materials (ASM). “This has resulted in its dominance of the global market.”

The PRC has abused its position, however, pressuring countries in the region. In 2010, it threatened to limit the supply of rare earth minerals to Japan.

“Chinese firms have been complicit in the pillaging of rare earths and other minerals from places like Burma where the mining and environmental concerns take place. But the raw ore ends up one way or another back in” the PRC, Christopher Ecclestone, a mining strategist at Hallgarten and Co., told FORUM.

Efforts are underway to diversify global supply chains, Ecclestone added. Notably, Japan, South Korea and the U.S. have sought to vary their sources of rare earth minerals used in civilian and defense applications, Woodall said. He added that next-generation mining projects will use new technologies to be more competitive with the PRC.

ASM is working with South Korea’s Zirconium Technology Corp. to produce a number of rare earth minerals and rare crucial materials from deposits in Australia. Woodall believes the project can have a global impact. (Pictured: These zirconium deposits in New South Wales, Australia, will be harvested to diversify China-centric supply chains for rare earth minerals.)

“These rare earth metals are in high demand, limited supply and cannot be substituted with any other element to obtain the required materials’ properties,” Woodall said. Unlike PRC-based suppliers, the joint venture uses an innovative clean metal process to “provide an integrated alternate, stable, secure and sustainable supplier of these critical metals into the world supply chain.”

Australia’s Lynas Rare Earths Ltd. is the world’s largest rare earth element mining and processing concern outside the PRC. In recent years, Japanese interests have invested in Lynas to revitalize its mining operations in Australia and move forward with upgrading the Lynas Advanced Materials Plant on Malaysia’s east coast.

The U.S. Department of Defense announced February 1, 2021, that it had awarded a U.S. $30.4 million contract to Lynas to expand U.S. domestic production of rare earth minerals after awarding U.S. $12.4 million in agreements in 2020 that focused on developing other domestic rare earth minerals projects.

“Upon completion of this project, if successful, Lynas will produce approximately 25% of the world’s supply of rare earth element oxides,” a Pentagon statement declared.

Joseph Hammond is a FORUM contributor who reports from the Indo-Pacific region.

 

IMAGE CREDIT: AUSTRALIAN STRATEGIC MATERIALS

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