US Army Will Fund Rare Earths Plant for Weapons Development

Rare earth metals are used to manufacture everything from electric or hybrid vehicles, wind turbines, consumer electronics and other clean energy technologies. The elements are also important to national governments because they are used in the defense industry. Twenty percent of rare earth demands are for use as permanent magnets. Permanent magnets can be used for a variety of applications including serving as essential components of weapons systems and high performance aircraft.

Major reserves in the world exist in China, California, India, Brazil, Australia, South Africa, and Malaysia. Currently, China accounts for over 95 percent of the world’s production of rare earths. Therefore, having control of these elements puts China at a powerful position. According to a story by Center for Strategic and International Studies, China is the leading player at all stages of rare-earth production. China holds the world’s largest rare-earth reserves, an estimated 37 percent of the global total.

As trade wars between the United States and China intensify, sourcing rare earths from China has become a national security. In an exclusive first reported by Reuters, the U.S. Army is now planning to “fund the construction of rare earths processing facilities, part of an urgent push by Washington to secure domestic supply of the minerals used to make military weapons and electronics,” according Reuters, citing  a government document. The move, as Reuters reported, “would mark the first financial investment by the U.S. military into commercial-scale rare earths production since World War Two’s Manhattan Project built the first atomic bomb.”

Earlier this year, President Donald Trump proposed tariffs on aerospace, machinery, and information and communications technology products imported from China. Beijing swiftly replied with its own tariffs on U.S. fruits, wine, steel pipe and pork, among other goods. However, everyone was on high alert in Washington in August, when Chinese President Xi Jinping toured a rare-earth processor a week after the Trump administration blacklisted Huawei in May. The Chinese President highlighted the importance of rare earths in global supply chains—a statement widely interpreted as a threat to restrict Chinese exports to the United States.