Amid tensions between the United States and China, Beijing has announced that it will curb exports of the rare metals gallium and germanium. Beijing explained the move in response to U.S. limits on China’s access to semiconductor technologies. In fact, Beijing says the United States is “abusing export control measures” to “disrupt” the global supply chain.
As the two countries continue to trade barbs, it’s clear that Beijing is willing to use mineral supply chains as geopolitical leverage. The United States should redouble its efforts to boost domestic mineral production and processing.
Gallium and germanium have become essential building blocks for solar panels, fiber optics and semiconductors. Significantly, China produces 60 percent of the world’s germanium and 80 percent of its gallium. However, Beijing also has a stranglehold on other key minerals, accounting for 85 percent of global rare earth metal processing and 92 percent of rare earth magnet production.
Why does this matter so much? Because rare earths and other critical minerals have become the irreplaceable building blocks for not just semiconductors and advanced energy technologies but also America’s most sensitive military hardware. Submarine sonar, missile guidance systems and fighter jets rely on rare earths. For example, a Lockheed Martin F-35 stealth fighter requires 920 pounds of rare earth metals; an Aegis destroyer uses 5,200 pounds. This poses serious problems for the military since its mineral supply chains run directly through Beijing.
China is undoubtedly willing to cut off rare earth exports in the event of a conflict. In 2010, Beijing suspended rare earth shipments to Japan after a territorial dispute over the Senkaku Islands.
The United States faces a pivotal moment. Global demand for minerals and metals has increased enormously due to the growth of renewable energy systems. But it’s poised to grow even more, with estimates ranging from 500 to 1,000 percent. The projected demand for minerals such as lithium and nickel — essential to electric vehicle batteries — is even higher.
As mineral demand explodes — and China already dominates the world’s supply chains — the United States is getting left behind. America’s mineral import reliance hit an all-time high and has doubled in the last two decades. Now, the United States depends on imports for 51 minerals, and China has become the leading supplier for 26.
What’s surprising is that the United States actually possesses vast mineral resources. But self-imposed bureaucratic barriers, including a mine-permitting process that takes seven to 10 years, have contributed to an ever-greater reliance on overseas producers.
Congress is considering a wide-ranging set of additions to the annual National Defense Authorization Act, including an amendment prohibiting energy technologies for adversarial nations. Since China is a key concern, lawmakers should also incorporate new incentives for domestic mining and processing within the legislation — including efforts to streamline the mine-permitting process.
The United States has taken steps to increase U.S. supplies of neodymium-iron-boron magnets. But China’s new export limits should be a wake-up call for action across the wider mineral supply chain.
At present, Beijing is cutting off supplies of two important metals. But in a crisis, Beijing could certainly cut off many more. That’s all the more reason for the United States to move swiftly in ending its heavy reliance on an adversary. It’s time to boost America’s domestic production and processing of these important minerals for economic and national security resilience.
