A recent report has highlighted the heavy reliance of Five Eyes countries, including the United States, the United Kingdom, Canada, Australia, and New Zealand, on China for rare earth elements (REEs), essential in the production of military equipment. The report warns that Western military supply chains are vulnerable to Chinese export limitations of REEs. It argues that diversifying away from China for the supply of REEs is crucial for the security and independence of the Five Eyes countries, in light of China’s dominance in the industry.
The United States, once a major player in the rare earth elements market, now imports up to 80% of its REEs from China. This dependence on China poses a significant risk, as China can leverage its dominance in the industry for political purposes, such as influencing global affairs and projecting power. The report emphasizes the strategic importance of REEs in defense technologies, including fighter jets, and urges the Five Eyes countries to address their overreliance on China for this critical resource.
China currently dominates the global production and processing of rare earth elements, accounting for 60% of global production and nearly 90% of processing. The country has a history of using its market dominance to exert pressure on other nations, as seen in its past exploration of limiting exports of critical minerals essential for military technologies. The report warns of the potential consequences if alternatives are not found, with North American producers estimating that the U.S. could run out of critical minerals necessary for defense within 90 days in the event of a confrontation with China.
Amid rising tensions with China, particularly over Taiwan, the Five Eyes alliance’s dependence on an adversary like China raises concerns about security and sovereignty. The report underscores the need for the Western alliance to reduce its dependency on China, drawing parallels to Europe’s past reliance on Russian gas prior to Russia’s invasion of Ukraine. Collaboration within the Five Eyes Alliance is seen as a crucial step towards ramping up domestic production of REEs and decreasing China’s influence in the market to enhance national security and mitigate risks associated with relying on China.
Recognizing the vulnerabilities to China’s dominance in the rare earth elements market, the United States has taken steps to strengthen its domestic supply chain of REEs. Initiatives by the Department of Defense and other agencies aim to reduce reliance on Beijing, with investments announced under President Biden’s Bipartisan Infrastructure Law to lower costs and environmental impacts of extracting REEs. However, the report emphasizes the importance of broader collaboration within the Five Eyes Alliance to address the risks associated with China’s control of the industry and enhance security and autonomy for democratic nations.
In conclusion, the report underscores the critical need for the Five Eyes countries to address their overreliance on China for rare earth elements to safeguard their security and sovereignty. By diversifying their supply chains and ramping up domestic production of REEs, these nations can reduce China’s influence in the market and mitigate the risks associated with geopolitical tensions and vulnerabilities. Collaboration within the alliance is seen as essential to strengthening national security, enhancing defense capabilities, and ensuring a more secure future for the Western alliance.
