In April, the US Government Accountability Office (GAO) published a report on rare earth materials in the supply chain of the Department of Defense. The report, commissioned by Congress, documented that China now dominates the supply of rare earth materials crucial to the nation's defense, computer and renewable energy sectors.
In fact, the GAO estimates that China now supplies virtually all or more precisely, a whopping 97 percent of the world's rare earth supply, and in the report the agency clearly voices its concerns that China could someday reduce the supply.
"The GAO report is a timely warning that the US needs to ramp up its domestic production of both light and heavy rare earths immediately," US Rare Earths, Inc. Chief Executive Officer Edward Cowle said at the time.
But, perhaps even "immediately" isn't soon enough?
A new article in the Telegraph implies that China may now be poised to significantly cut export quotas for rare earths, as the US and China "swap threats" over the South China Sea. From the article:
Lack of strategic planning by the West has allowed China to acquire a world monopoly on this family of seventeen metals. Assumptions that Beijing would never risk its reputation as a global team player by abruptly strangling supply have proved naive.
It's important to note that rare earth metals are relatively abundant the problem is that they are difficult to extract. These days, the search is on for alternative sources for rare earths in places such as California, Colorado, Idaho and Montana (and in Australia and Canada, as well). However, the GAO report estimates that rebuilding a US rare earth supply chain could take up to 15 years.
Unfortunately, it seems that, at least in the short-term, the supply of rare earth metals will remain dependent on the economic and political judgment of officials and exporters in China.