A bipartisan piece of legislation to be introduced in the US Senate would force defense contractors to stop buying rare earth metals from china by 2026 and use the Pentagon to build a permanent supply of strategic minerals.
The bill, sponsored by Senators Tom Cotton, an Arkansas Republican, and Mark Kelly, an Arizona Democrat, is expected to be introduced Friday, the Reuters news agency reported. It’s the latest in a string of US legislation trying to thwart China’s Nearly Total Control above the sector.
It essentially uses the The Pentagon’s Purchase of Billions of Dollars fighter jets, missiles and other weapons as leverage to force contractors to stop relying on China and, by extension, support the resurgence of rare earth production in the US.
Rare Earths are a group of 17 metals which, after processing, are used to make magnets found in electric vehicles, weapons and electronics. While the United States created the industry in World War II and American military scientists developed the most widely used type of rare-earth magnet, China has grown slowly over the past 30 years to dominate almost the entire industry.
The United States only has a rare earth mine and has no capacity to process rare earth metals. The US depends on China for about 80 percent of its rare earth imports.
In December, China consolidated some of its main producers to create a behemoth that will strengthen its control over the global industry it has dominated for decades.
The new entity, China Rare-Earths Group, will accelerate the development of mines in the south of the country, state media report.
“Ending US dependence on China for the mining and processing of rare earths is critical to building the US defense and technology sectors,” Cotton told Reuters.
The senator, who sits on the Senate’s armed forces and intelligence committees, described: China’s evolution in the global rare earths leader as “just a policy choice made by the United States,” adding that he hoped a new policy would ease Beijing’s hold.
In the past, the US has worked with other countries at the World Trade Organization to try to coerce China to export more rare earths amid a global shortage.
Known as the Restoring Essential Energy and Security Holdings Onshore for Rare Earths Act of 2022, the bill would codify and make permanent the Pentagon’s ongoing stockpiles of the materials. China temporarily blocked rare earth export to Japan in 2010 and has made vague threats that it could do the same to the United States.
But to build up that reserve, Pentagon buys stock in part from China, a paradox that Senate staffers hope will subside over time.
The rare earths production process can be very polluting, part of the reason it became unpopular in the United States. Ongoing research is trying to make the process cleaner.
Cotton said he has spoken to several US executive agencies about the bill, but declined to say whether he had spoken to him President Joe Biden or the White House.
“This is one area Congress will lead on as many members have been concerned about this issue regardless of party,” he said.
The bill, which sponsors expect to be included in Pentagon funding legislation later this year, does not provide direct support for the nascent U.S. rare earth sector.
Instead, the Pentagon is requiring contractors to stop using Chinese rare earths within four years, allowing exemptions only in rare situations. Defense contractors should immediately say where they get the minerals from.
Those requirements “should be more domestic [rare-earths] development in our country,” said Cotton.
Tensions between the US and China
Over the past two years, the Pentagon has given grants to companies seeking to resume U.S. rare-earth processing and magnet production, including MP Materials Corp. Lynas Rare Earth Ltd from Australia, TDA Magnetics Inc and Urban Mining Co.
Kelly, a former astronaut and member of the Senate Armed Forces and Energy Committees, said the bill should “strengthen America’s position as a world leader in technology by reducing our country’s reliance on opponents like China for rare earth elements.”
The bill only applies to weapons, not to other equipment that the US military purchases.
In addition, the US Trade Representative should investigate whether China is disrupting the rare earth market and recommend whether: trade sanctions are needed.
When asked whether such a move could be viewed as hostile by Beijing, Cotton said, “I don’t think the answer to Chinese aggression or Chinese threats is to keep subjecting ourselves to Chinese threats.”