US initiates moves to break the Chinese monopoly in Rare Earth Minerals;

Washington/Canberra: The trade war between the United States and China has flared up further, following the announcement by the US President, to tax the entire imports of Chinese goods. Against this background, discussions have started of China using the Nuclear option against the United States, which includes the US bonds and Rare Earth Minerals. Given the Chinese domination in the Rare Earth Minerals sector, the highest possibility is that China will exercise this option. Keeping this in mind, the United States has started its moves.

Ellen Lord, a senior official in the US defence department, gave information about this. Lord said ‘The US defence department has initiated talks, on a priority basis, with Australia to build a processing facility for Rare Earth Minerals. These talks are taking into account the needs of both the United States and its allies.’ She also clarified that creating a facility for processing Rare Earth Minerals, is the most important issue.

Two months ago, the US defence department presented a report regarding this, to the US Congress. The report explored various possibilities, options and proposals regarding Rare Earth Minerals. The report suggests that there is a need to make more funds available, to prevent a shortage of Rare Earth minerals and advised the concerned companies to create extra and emergency stocks of Rare Earth Minerals. At the same time, the report instructs to find alternative countries, other than China and make expeditious movements to fulfil the requirement of the Rare Earth Minerals.

Against this background, the information revealed by the defence department official becomes significant. Indications are that talks are also being held with Canada, and Japan may also join the front. Currently, Australia has the facility for processing Rare Earth Minerals, after China.The Australian company in this sector has also indicated expansion and moves have been initiated to start a plant in the state of Texas, in the United States.

US President Donald Trump has highlighted the Rare Earth Minerals issue and has adopted a clear policy that there will be no compromise on the matters of national security. Efforts are also being made to provide additional facilities to the US company, operational in this sector. But this may take a year or longer. In the meantime, if China used this as a decisive weapon, the US defence and technology sector can be in trouble.

China is the biggest supplier of the Rare Earth Minerals used in the manufacture of Smartphones, Computers and electric cars. It is claimed that more than 30% of the world’s reserves, of 17 ores falling under the Rare Earth Minerals, arein China. China has 95% share, of the Rare Earth Minerals produced in the world. More than 80% of Rare Earth Minerals used in the United States, come from China. Only last month, it was reported that the import of Rare Earth Minerals from China to the United States had increased and in July 447 tonnes of Rare Earth Minerals were imported.

In the past, China has made the Japanese government bow, stopping the Rare Earth Minerals supply. Fears are being expressed in the US circles that China can repeat the same with the United States. Therefore, to end this Chinese monopoly, the moves being made with Australia and the other allies, are vital for the United States.