Difficulties in Developing Rare Earth Industry Chain in United States

The United States and its allies plan to spend a lot of money to develop rare earth industry, but it seems to encounter a big problem that money can not solve: a serious shortage of companies and projects. Eager to ensure domestic rare earth supply and develop processing capacity, the Pentagon and the Department of Energy (DOE) have invested directly in several companies, but some industry insiders say they are confused about these investments because they are related to China or have no record of rare earth industry. The vulnerability of the U.S. rare earth industry chain is gradually exposed, which is obviously much more serious than the results of the 100 day critical supply chain review announced by the Biden administration June 8th, 2021. DOC would evaluate whether to initiate an investigation into rare earth neodymium magnets, which are critical inputs in electric motors and other devices, and are important to both defense and civilian industrial uses, under Section 232 of the Trade Expansion Act of 1962. Neodymium magnets have a wide grade of magnetic properties, which span a wide range of application, like precast concrete shuttering magnet, magnet fishing, etc.

Neodymium magnets with a wide grade of magnetic properties

Judging from the current predicament, the United States and its allies still have a long way to go to rebuild the rare earth industry chain completely independent of China. The United States promotes the independence of rare earth resources, and the strategic role of rare earth resources in high-tech and defense industries has been repeatedly cited as an argument for decoupling. Policy makers in Washington seem to believe that in order to compete in key emerging industries in the future, the United States must unite with its allies to develop independently in the rare earth industry. Based on this thinking, while expanding investment in domestic projects to improve production capacity, the United States also places its hope on its foreign allies.

At the Quartet summit in March, the United States, Japan, India and Australia also focused on strengthening rare earth cooperation. But so far, the US plan has encountered great difficulties at home and abroad. Research shows that it will take the United States and its allies at least 10 years to build an independent rare earth supply chain from scratch.

Post time: Jun-28-2021