Ensuring Rare Earth Elements for National Security

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In August of 2022, President Biden’s Inflation Reduction Act enacted some of the largest-ever subsidies and rebates to incentivize the domestic production and consumption of solar panels, electric cars, and other green technologies. [1] Yet the batteries required by these American-made electric vehicles, panels, and turbines necessitate the import of thousands of tons of minerals mined and refined in China. Rare Earth Elements (REEs), a group of minerals including samarium, neodymium, praseodymium, and dysprosium, are necessary components of REE magnets, the strongest permanent magnets in the world. China currently holds a monopoly in the rare earths supply chain, extracting 60% worldwide and processing 87%. [2] Because of the leverage that this monopoly gives a foreign competitor, and the role the REEs play in technology crucial to both defense and economic growth, building an independent REE supply chain is necessary for the United States to protect national security, compete in the international economy, and achieve climate goals.

Rare earth elements are considered “rare” despite their relative abundance because they are generally not found in viable concentrations. [3] Extracting them is extremely dirty, and most developed countries are not willing to endure the environmental hazards that accompany these mines. There are also high economic barriers to entry into the REE market, especially the capital expenditure costs of building mines and processing plants and the difficulty of competing with Chinese companies that benefit from cheap labor and land and less regulation. In the case of China, the state ownership of the industry was key to its market dominance today. The Chinese Communist Party can invest in infrastructure to prioritize economic growth and market dominance in a way that a private businesses prioritizing profit would not.

Past Political Tensions

History proves that rare earth elements and who controls them are geopolitical issues of great importance. In 2010, in response to the arrest of a Chinese fisherman who collided with the Japanese Coast Guard in the disputed waters of the Senkaku/Diaoyu islands, some believed that China de facto banned exports of REEs to Japan. While Japanese companies said that their shipments of REEs had been stuck at customs, a spokesman for the Chinese MIIT maintained that, “China will not use rare earths as an instrument for bargaining.” [4],[5] This incident exemplifies how China could use its control of REEs as leverage in international negotiations, even tacitly, and it was one of the prompting factors for the United States to look into reopening their own mines in the 2010s. Similarly, the Chinese government imposed export quotas and duties on REEs in 2012, which led to the United States and other nations with major REE reserves filing a World Trade Organization complaint. [6] China removed the export restrictions by 2015 to resolve the dispute but this episode was a further wakeup call for many import-heavy nations that it was crucial to either stockpile minerals or look to alternate sources.

China’s monopoly over these minerals also creates an opportunity to withhold essential components of defense technologies and thus stifle other militaries. Nations with the strongest military influence are often the ones with the most developed defense technologies, for example in the case of nuclear proliferation. Thus, as technology and rare earth elements become more interdependent issues, being denied access to the latter could cause the United States to lose its technological advantages. The Lockheed Martin company’s F-35 Lightning II fighter jet’s use of Chinese-originated REEs demonstrated this vulnerability when the Chinese government allegedly sought to gauge how controls on REE exports might affect the United States’ ability to produce the jets in 2021. [7],[8] It is therefore critical to national security that the United States has uninterrupted access to REEs for the most cutting-edge jets, submarines, lasers, electronic hardware, and more. 

Opportunities in the United States

While there are many reserves in the United States and elsewhere, the high costs of developing the plant, equipment, and metallurgical processes to refine the minerals can partially explain why there are no REE mines operating domestically. If the federal government subsidized development for private companies and expedited permits to help them build the necessary infrastructure, the risk and costs to private investors would be minimized. One example of this public-private cooperation is the Department of Defense’s partnership with Australian company Lynas through the Defense Production Act to fund a light rare earth mining and separation project in Hondo, Texas. Clearly there are site options and interested shareholders, but as of now, no sites have commenced production or established a timeline, demonstrating how difficult it is to get these projects off the ground without more government support.

The singular rare earth mine to operate in the United States – the Mountain Pass Mine in California – is a good case study of the volatility of REE mining. After a series of bankruptcies, toxic waste spills, closures, and resuscitations throughout the 1990s and 2000s, Mountain Pass was bought out of bankruptcy by the MP Materials rescue consortium in 2017. [9] This mine was framed as a bulwark against the Chinese monopoly; yet a main shareholder in MP Materials, the Shenghe Resources company, has mixed ownership between private Chinese investors and the Chinese government. Since the mine began production, Shenghe is “the sole buyer of MP’s rare earth concentrate, which Shenghe sends to China for processing.” [10] Although the Department of Defense has awarded a $35 million contract to build a heavy rare earth elements processing and separation facility on-site, Beijing’s strategic plan is to continue bringing as much unrefined REEs to China from their overseas investments to then process and export as a higher-value product. [11] While this mine is a crucial step towards bolstering domestic mining, especially if the processing facility is added, the United States economy is certainly missing out on a profitable step of the supply chain by exporting its raw materials.

Foreign Investment and Ally-Shoring

Another option to fill the gap in the supply chain is to partner with trusted democracies and nations that are vulnerable to the influence of China’s One Belt One Road initiative. Much of Europe, including the EU, has prioritized shifting to green energy (which will require many REEs) with a renewed urgency after Russia, its largest supplier of oil and gas, invaded Ukraine. While there are currently no mines in Europe and the nations are thus 100% import-dependent, there are deposits in Kiruna and Norra Kärr in Sweden, Storeknuten in Norway, and Kvanefjeld in Greenland. [12],[13] Shenghe Resources, the same company that partially owns the Mountain Pass Mine, is the largest shareholder in the Kvanefjeld project. Like in the United States, strict environmental standards in Europe have prevented mining and no sites have broken ground yet. [14]

Additionally, Africa, South America, and Asia have become a frontier that the United States and China both want to bring into their sphere of influence in the competition over minerals. Brazil, India, and Vietnam have some of the highest REE reserves in the world and China’s One Belt One Road Initiative has accordingly prioritized investing in these critical allies. [15]

For example, Brazil receives the most investment from China of all countries in South America, and 7% of that investment is in the mining sector. [16] India and Vietnam are members of the Asian Infrastructure Investment Bank and India is also a member of the Asia-Africa Growth Corridor. Shenghe Resources again owns shares in an Australian company that is pursuing the Ngualla Rare Earth Project in Tanzania. On the other hand, there is also a strong presence of G7 countries in the global south; the British-owned Rainbow Rare Earths company is pursuing the Phalaborwa Project in South Africa and Gakara Project in Burundi. [17] American investment should be targeted towards companies based out of friendly countries like the UK to build an “ally-shored” supply chain. [18]


As natural resource strategist David Abraham put it, “Mining is not antithetical to a green economy; it’s a necessity.” [19] With concentrated efforts, it is possible to pursue more mining without compromising environmental health by funding scientific research agencies to develop cleaner extraction, separation, and recycling methods. For example, scientists at Harvard University and the Defense Advanced Research Projects Agency are each exploring methods to separate rare earth elements using bacteria filters and microbes rather than harsh chemicals. [20],[21] If the Biden Administration is serious about creating a green American economy, it is crucial to begin with rare earth elements. This issue is very timely as the threat of China invading Taiwan and related trade disputes loom. It is therefore best to begin permitting and ramping up production as soon as possible. As we approach an inflection point in U.S.-China relations, these unassuming minerals have the simultaneous potential to transform the United States into a zero-carbon society, and risk, if left unaddressed, to throw U.S. climate, foreign affairs, military, and economic policy into radical uncertainty.


[1] Congress.gov. “Text – H.R.5376 – 117th Congress (2021-2022): Inflation Reduction Act of 2022.” August 16, 2022. https://www.congress.gov/bill/117th-congress/house-bill/5376/text.

[2] International Energy Agency, Critical Minerals Policy Tracker, (Paris: IEA, 2022), https://www.iea.org/reports/critical-minerals-policy-tracker.

[3] Baolu Zhou, Zhongxue Li, and Congcong Chen, “Global Potential of Rare Earth Resources and Rare Earth Demand from Clean Technologies,” Minerals 7, no. 11 (2017): 203, https://doi.org/10.3390/min7110203.

[4] Mari Yamaguchi, “China rare earth exports to Japan still halted,” The Associated Press, October 21, 2010, https://web.archive.org/web/20110909131412/http://www.businessweek.com/ap/financialnews/D9J02PF01.htm#

[5] CNN Wire Staff, “Official: China won’t use ‘rare earths’ as a bargaining chip,” CNN, October 29, 2010,http://edition.cnn.com/2010/BUSINESS/10/28/china.rare.earth/index.html.

[6] World Trade Organization, “DS431: China — Measures Related to the Exportation of Rare Earths, Tungsten and Molybdenum,” 2021 edition, https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds431sum_e.pdf.

[7] David S. Abraham, “War Effort: Hard and Smart Metals,” in The Elements of Power: Gadgets, Guns, and the Struggle for a Sustainable Future in the Rare Metal Age (New Haven: Yale University Press, 2015): 168, https://doi-org.proxy.library.nd.edu/10.12987/9780300216714

[8] Sun Yu and Demetri Sevastopulo, “China targets rare earth export curbs to hobble US defence industry,” Financial Times, February 16, 2021, https://www.ft.com/content/d3ed83f4-19bc-4d16-b510-415749c032c1.

[9] Marla Cone, “Desert Lands Contaminated by Toxic Spills,” LA Times, April 24, 1997, https://www.latimes.com/archives/la-xpm-1997-04-24-mn-51903-story.html.

[10] Mary Hui, “A Chinese rare earths giant is building international alliances worldwide,” Quartz, February 19, 2021, https://qz.com/1971108/chinese-rare-earths-giant-shenghe-is-building-global-alliances.

[11] U.S. Department of Defense, “DoD Awards $35 Million to MP Materials to Build U.S. Heavy Rare Earth Separation Capacity,” Feb. 22, 2022, https://www.defense.gov/News/Releases/Release/Article/2941793/dod-awards-35-million-to-mp-materials-to-build-us-heavy-rare-earth-separation-c/.

[12] Kjetil S. Grønnestad, “There may be one billion tonnes of rare minerals here,” Teknisk Ukeblad Media, June 20, 2022, https://www.tu.no/artikler/her-kan-det-ligge-en-milliard-tonn-sjeldne-mineraler/520278?key=rvYuKDBP

[13] Jackie Northam, “Greenland Is Not For Sale. But It Has Rare Earth Minerals America Wants,” NPR, November 24, 2019, https://www.npr.org/2019/11/24/781598549/greenland-is-not-for-sale-but-it-has-the-rare-earth-minerals-america-wants.

[14] Yusuf Khan, “Why Processing Sweden’s Rare-Earth Haul Won’t Be Easy,“ The Wall Street Journal, Feb. 9, 2023, https://www.wsj.com/articles/why-processing-swedens-rare-earth-haul-wont-be-easy-11675935006.

[15] U.S. Geological Survey, “Mineral Commodity Summaries: Rare Earths,” January 2023, 2, https://pubs.usgs.gov/periodicals/mcs2023/mcs2023-rare-earths.pdf

[16] Tulio Cariello, Chinese Investments in Brazil – History, Trends and Global Challenges (2007-2020), (Rio de Janeiro: Conselho Empresarial Brasil-China, 2021): 18, 23, https://www.cebc.org.br/2021/08/05/investimentos-chineses-no-brasil-historico-tendencias-e-desafios-globais-2007-2020/.

[17] Rainbow Rare Earths Limited, A Strategic Source of Rare Earth Minerals for a Growing Market, (2021): 4-5, https://www.annualreports.com/HostedData/AnnualReports/PDF/LSE_RBW_2021.pdf.

[18] Elaine Dezenski and John C. Austin, “Rebuilding America’s economy and foreign policy with ‘ally-shoring,’”Brookings Institute, June 8, 2021, https://www.brookings.edu/blog/the-avenue/2021/06/08/rebuilding-americas-economy-and-foreign-policy-with-ally-shoring/.

[19] Abraham, “Environmental Needs: Rare Metals Are Green,” in The Elements of Power, 135.

[20] Leah Burrows, “A clean way to extract rare earth metals,” Harvard John A. Paulson School of Engineering and Applied Sciences, June 17, 2016, https://seas.harvard.edu/news/2016/06/clean-way-extract-rare-earth-metals

[21] C. Todd Lopez, “DARPA Looks to Microbes to Process Rare Earth Elements,” U.S. Department of Defense News, September 8, 2021, https://www.defense.gov/News/News-Stories/Article/Article/2768268/darpa-looks-to-microbes-to-process-rare-earth-elements/.


Anne is a student at the University of Notre Dame (class of 2024) studying Political Science and History.