Rare earth minerals are the backbone of modern technology.
Rare earth minerals are essential components in smartphones, electric vehicles, energy systems, and advanced military equipment.
And China has banned the sale of rare earth minerals to the United States.
China’s Grip on the Market
The problem?
As of 2023, China accounted for approximately 70% of global rare earth production and controlled nearly 90% of the processing capacity.
By now it’s increased.
And not only that, they have gone to South America and Africa to buy up their existing supplies of rare earth minerals.
A Wake-Up Call for the U.S.
In response to recent U.S. tariffs, China imposed export restrictions on critical rare earth minerals, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. These minerals are vital for the production of F-35 jets, submarines, and other defense equipment.
Domestic Challenges
The U.S. currently has only one operational rare earth mine—Mountain Pass in California. However, the lack of domestic processing facilities means that much of the extracted material must rely on Chinese processing.
Strategic Initiatives Underway
Recognizing our strategic vulnerability, the U.S. government is finally taking steps to bolster domestic rare earth capabilities. This includes streamlining the permitting processes, reducing negotiations and investing in domestic processing infrastructure.
Investor Insight
The current geopolitical landscape underscores the importance of the U.S. diversifying supply chains and investing in domestic capabilities.
Companies involved in rare earth mining and processing outside of China may present significant investment opportunities as the U.S. seeks to reduce its reliance on foreign sources.
What do you think? Email me at [email protected].