US can strengthen security by developing domestic rare earth resources

U.S. foreign policy is increasingly focused on combating China. There is constant news of China seeking geopolitical power and control — from the possible invasion of Taiwan, to strengthening their alliance with Russia, to the competition for space supremacy. That’s why the Defense Department’s recent 2022 China Military Power Report called China, “the most consequential and systemic challenge to our national security and to a free and open international system.”

But earlier this year – in a move that made few headlines – the U.S. made a necessary but concerning decision that gives China power over a critical piece of our vital military equipment. Lockheed Martin had to halt delivery of the Air Force’s new F-35 fighter jet because it used a Chinese-produced cobalt and samarium alloy in the turbomachine that helps start the engine.

The subsequent national security waiver was necessary because the U.S. lacks domestic production capacity for this critical material. The choice was either to accept the Chinese alloy or have the new planes sit in storage.

In the short-term, the decision poses no national security risk. As the waiver order made clear, the rare earth elements are not a safety risk and the F-35s have already logged over 500,000 flight hours.

In the long term, the status quo around critical materials is unacceptable since it gives China a “kill switch” for America’s defense manufacturing. Were China to invade Taiwan and risk war with the U.S., it would almost certainly cut off the alloy and therefore make it impossible to produce new F-35s during the conflict. Since rare earths are components for almost all modern manufacturing, this would also halt our ability to produce tanks, naval vessels, and virtually every other weapons system.

The root cause of this problem is China’s near-monopoly on critical materials for batteries, magnets, and other essential components in manufacturing. China processes more than 80% of the world’s cobalt. It is mined under inhumane conditions in the Congo, often by child labor, and then shipped overseas to be refined into a usable form.

More broadly, China controls over 95% of the world’s rare earth metals, which are 17 different elements crucial to magnets, batteries, and many other manufacturing processes.

China cutting off American manufacturing capacity during a war is not some far-fetched tail risk. A Chinese invasion of Taiwan is increasingly plausible as Chairman Xi tightens his grip on power and becomes ever more hostile to the Western-led international order. In wargames, American policymakers assume that a surprise attack on American bases throughout the Indo-Pacific would precede an invasion of Taiwan. Chinese media outlets have echoed that plan.

American defense manufacturing and military preparedness does not need to be at China’s mercy. We can refine critical materials with a secure and sustainable domestic supply chain.

Metal refining conjures up a frightening mental image of billowing smoke stacks, bubbling vats of toxic chemicals, and workers risking life and limb. While that is the traditional process used overseas, it isn’t how a modern American company would or should operate. Materials science, metallurgy, chemistry, and engineering have all made tremendous advances since refining went overseas.

American innovation can re-shore these critical materials without compromising our values of environmental sustainability or worker safety. New techniques are capable of refining rare earth metals, nickel, cobalt, & platinum group metals from mining waste known as tailings. There are no direct carbon emissions, no hazardous byproducts, and no risk to workers’ health.

This process is already being used to make commercially viable neodymium — a rare earth metal used in magnets — in the U.S. for the first time in decades. Both startups and established corporations are making advances in production, meaning the nation can have a secure domestic supply chain.

The federal government must take concrete steps to support environmentally sustainable domestic production of rare earths, including increasing funding for federal grants and low-interest loans to rapidly scale up metal refining. While research and development is essential, the biggest challenge faced in this industry is capital costs to expand since refining requires large amounts of expensive equipment.

We simply cannot afford to put our national security at risk and wait another decade to reshore these critical materials. The F-35 fighter jet is a technological marvel that gives America a huge advantage in war. But as we are seeing in Ukraine, being able to rapidly produce new equipment is equally essential. That will never happen so long as China controls our ability to access critical materials. We cannot delay bringing them back to the U.S.

Nick Myers is the CEO of Phoenix Tailings, a Massachusetts-based refiner of rare earth metals and other critical materials from mining waste.

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