China accounts for over 95 percent of the world’s production of rare earths minerals.
U.S. President Donald Trump on Wednesday signed an executive order declaring a national emergency in the mining industry, aimed at boosting domestic production of rare earth minerals critical for military technologies while reducing the country’s dependence on China.
Trump ordered his Cabinet secretaries to study the matter, with an eye toward government grants for production equipment, as well as tariffs, quotas or other import restrictions against China and other non-market foreign adversaries.
The order states that the county’s “undue reliance on critical minerals, in processed or unprocessed form, from foreign adversaries constitutes an unusual and extraordinary threat, which has its source in substantial part outside the United States, to the national security, foreign policy, and economy of the United States.”
Rare earth elements are a group of 17 minerals critical to the defense industry’s manufacturing of missiles and munitions, hypersonic weapons, and radiation-hardened electronics — as well as consumer electronics like cellphones. The Trump administration previously identified 35 minerals as both essential and whose supplies are vulnerable to disruption.
The U.S. imports 80 percent of these elements directly from China, with portions of the remainder indirectly sourced from China through other countries, according to the order.
Appearing before the Senate Armed Services Committee’s Readiness and Management Support Subcommittee on Thursday, Ellen Lord, the top acquisition official at the Pentagon, called for congressional aid in creating a strategy for rare earth minerals.
“A U.S. rare earth mineral strategy should, with the necessary congressional authorization and appropriations, consist of national stockpiles of certain rare earth elements, reestablishing rare earth mineral processing in the U.S. by implementing new incentives and removing disincentives, and [research and development] around new forms of clean rare earth mineral processing and substitutes,” Lord testified. “We will need your help.”
Subcommittee chairman Sen. Dan Sullivan, R-Alaska, warned that China’s domination of rare earth minerals is “outrageous,” pointing to a 2010 incident when China cut off rare earth elements to Japan as proof that the dependence on a global competitor is a national security issue.
While agreeing with the risk, Lord said the short-term solutions are to increase the mining of domestic sources while trying to increase stockpiles of critical materials, as well as looking for alternative sources.
“We are on a trajectory to increase our national defense stockpile relative to rare earth minerals. The silver lining of COVID has been that I think most Americans now understand the importance of having domestic supplies,” Lord said. “We could certainly, especially under the auspices of the [executive order] that just came out yesterday, work with the interagency because there is already a lot of work going on to look at expanding the national defense stockpile to include more rare earths.”
Lord also said she would get back to Sullivan within a month on how Congress could help.
The order comes as Trump, who has championed trade protectionism, is running for reelection on Nov. 3.
The Pentagon sent Congress a legislative proposal in May that would raise spending caps under the Defense Production Act to enable the government to spend up to $1.75 billion on rare earth elements in munitions and missiles and $350 million for microelectronics. It would also eliminate caps when it comes to hypersonic weapons.
The U.S. government in April awarded contracts for heavy rare earth mineral separation and issued solicitations for the processing of light separation and for neodymium magnets, which are used in Javelin missiles and F-35 fighter jets.
Under current law, the Defense Department cannot invest more than $50 million in funds from the Defense Production Act without additional congressional notification, but the Pentagon’s legislative proposal would raise this cap to $350 million to invest in multiple projects.