The United States is ramping up its efforts to establish a domestic supply chain for rare earth elements, essential for defense and green energy industries, with the goal of reducing its dependence on China by 2027. Laura Taylor-Kale, Assistant Secretary of Defense for Industrial Base Policy, announced the ambitious plan at a mining conference in Perth, Australia.
In response to supply chain disruptions caused by COVID-19, the U.S. has been actively working to diversify the global rare earths supply chain away from China. The country has been investing in projects in allied nations like Australia, Canada, and the UK, in order to strengthen its domestic supply chain under the Defense Production Act.
This year, the U.S. extended financial support to two Australian rare earth projects, allocating up to $850 million to aid in the construction of the supply chain. Despite challenges such as falling rare earth prices due to increased Chinese exports, Western producers are pushing for a delink from Chinese pricing in order to ensure a sustainable and profitable market.
As the U.S. continues to secure rare earth supplies crucial for its economic and national security, the focus on breaking China’s dominant position in the market through a resilient global supply chain has become a key strategic priority. With the backing of government partnerships and investments, industry leaders believe that growing the non-Chinese rare earth industry is vital to address the current market imbalance.
The race to establish a sustainable rare earth supply chain highlights the importance of diversifying sources and reducing reliance on a single dominant player in the market. By collaborating with allies and investing in domestic production, the U.S. aims to strengthen its economic and national security position in the global rare earth market.
