Some see it as a strategic masterstroke by China, others, a shocking oversight by the United States. And while the truth lies somewhere in the middle, the fact remains that the US is now wholly dependent on China for some of the most critical components of its modern military hardware.
The lasers and magnets that drive the weapons systems in the most advanced military in the world are produced using rare earths sourced from China, a trade in which China owns a monopoly.
Neodymium is used to manufacture tiny magnets that are components in the tail fin systems of missiles and smart bombs, satellite systems, as well as for magnets in hybrid electric motors that are being outfitted on navy vessels. Samarium is combined with cobalt to produce magnets that are used in the navigation systems of tanks and Aegis-class navy vessels. Ytterbium, meanwhile, is required for the laser guidance systems of tanks and missiles.
Outsourcing rare earths
That the United States finds itself in a position where a rival power now has a stranglehold on the rare earths it needs for its military is hard to fathom given how proactive the US has traditionally been in ensuring the security of their access to oil.
Even more surprising is that the US has plenty of its own rare earths to mine. Although China owns the largest share of the worldwide reserves of rare earths (36 percent), the US has the second largest known reserves, at 13 percent.
Until the last 10-20 years the US was capable of supplying itself with both the raw materials and finished products for its advanced military systems. Since then, however, the main issue for US producers has been that domestic deposits in concentrations that are commercially viable to exploit have been difficult to come by. This, along with the rising cost of manufacturing rare earth elements into metals and from there into high-tech components, has driven the industry out of the US and into China, who have in turn quietly steered the growth of their own rare earths extraction and refining sectors since 1986 towards the dominating position they find themselves in today.
Source: Resource Investing News
By Robert Sullivan