By Daniel McGroarty, TES GeoPolicy Editor
The Chinese threat to ban exports of rare earths – a group of 17 elements used in everything from smart phones to smart bombs, wind turbines and F-35 jet fighters – has highlighted the dangers of the United States’ dependence on its principle economic competitor for raw materials critical to America’s national economy and national security.
The specter of using rare earths as an economic weapon makes clear that the current trade war between the U.S. and China is in fact one front in a larger tech war – a competition to see which country will dominate the 21st Century Technology Age. While many analysts focus on 5G networks or other manifestations of this competition, these advanced technologies are enabled by arcane metals and minerals including the rare earths, but ranging well beyond. China’s dominance in many of these metals and minerals – and the U.S.’s deep dependency on imports – is America’s Achilles’ Heel in the tech war.
That fact raises the importance of the first U.S. bilateral meeting to take place at this week’s G20 gathering in Osaka, Japan: The dinner session between newly-reelected Australian Prime Minister Scott Morrison and U.S. President Donald Trump. With the media focused on the meetings between the American president and his Chinese and Russian counterparts, the decision to start the summit with a U.S.-Australia session merits more attention. Both countries – joined by Canada and the U.K. — are part of a little-known forum called the NTIB, the National Technology Industrial Base, an entity created by U.S. law that treats the technological and industrial might of all four allies as a single entity for national security purposes.
With three-fourths of the NTIB — the U.S., Australia and Canada – among the world’s most resource-rich nations, the forum offers the perfect opportunity to work in concert to develop critical minerals. The table was set in early 2018, when then-Prime Minister Malcolm Turnbull and President Trump issued a joint declaration testifying to the primacy of tech metals:
“The cooperation of strategic partners can open new worlds of technological development using materials that are lighter, more versatile, or more conductive to open up new manufacturing opportunities, in defense and aerospace, information technology, telecommunications, energy and medicine. The United States and Australia agreed to work together on strategic minerals exploration, extraction, processing and research, and development of rare earths and high performance metals to sustain the jobs of today and develop the jobs of tomorrow.”
Since that declaration, both the U.S. and Australia have formulated Critical Minerals strategies, while the U.S. has issued a Defense Industrial Base supply chain report stating that “…China represents a significant and growing risk to the supply of materials deemed strategic and critical to U.S. national security.” The U.S.-Australia G20 meeting comes just days after Canadian Prime Minister Justin Trudeau – Canada has been an NTIB member for more than 20 years — met with President Trump at the White House, and the two leaders “instructed officials to develop a joint action plan on critical minerals collaboration.” We may be seeing the piece-parts of a larger U.S-Australia-Canada critical minerals strategy put in place.
And private-sector collaboration is already happening. Australian rare earth miner Lynas Corporation is exploring options to refine rare earths in the U.S., working with a Texas company. The Round Top heavy rare earth project in southwest Texas is now the focus of a U.S.-Australian joint venture. Rio Tinto, with its extensive Australian operations, is currently working with the U.S. Defense Logistics Agency – keepers of the National Defense Stockpile – to optimize the recovery of copper co-product rhenium, a key alloy in jet fighter engine turbines, at the company’s Kennecott Copper Mine in Utah. In the pipeline is the Resolution Mine in Arizona, where Rio Tinto and its fellow Australian partner BHP have already invested $2 billion in what has been a 15 year permitting process, with a total $8 billion to bring the mine into production, providing a new source of copper and critical minerals like rhenium decades into the future. With Australian-based mining companies constituting the largest share of Foreign Direct Investment in the U.S. mining sector, there is ample opportunity for additional collaboration to recover critical minerals.
Long after the Osaka G20 recedes from the headlines, cooperation centered on critical minerals could mark the beginning of a tech war counter-offensive, leveraging the resource wealth of the U.S. and its leading allies to ensure adequate supplies of the materials that power the transformative technologies of the 21st Century.
Daniel McGroarty, TES GeoPolicy editor, served in senior positions in the White House and Department of Defense, and has testified in the U.S. Senate and House on critical minerals issues. McGroarty is principal of Washington, D.C.-based Carmot Strategic Group, and president of the American Resources Policy Network, a non-partisan virtual think tank dedicated to informing the public on the importance of developing U.S. metal and mineral resources. The views expressed here are his own.