US takes on Chinese 'Rare Earths' hegemony – Australian company to open plant in Texas

Washington/Canberra: – The US moves to break the Chinese monopoly in the Rare Earth Minerals, necessary for the defence sector, have gained momentum. The US defence department has selected an Australian company to start a Rare Earth Minerals Facility. Only last month, the Chinese government brought a resolution to make the controls stricter for the manufacturing and export of Rare Earth Minerals. Against this background, the decision taken by the US defence department becomes significant.

The US defence department has awarded a contract worth USD 30.4 million to Lynas Rare Earths Limited. This is the second time the US defence department has chosen this company to build a facility in the United States. In April, last year, this Australian company was selected for a joint project. As per the new contract of the defence department, Lynas will be building a Light Rate Earths Processing Facility in Texas.

Lynas Rare Earths Limited is the second largest company in the Rare Earths sector and is the biggest company outside China. The Rare Earth Processing Factory, built by this company in Malaysia, is known as the largest Rare Earth processing factory outside China. Moreover, Lynas has also started the project for Rare Earth mineral exploration in Australia.

China is the largest manufacturer and exporter of the Rare Earth Minerals required in advanced fighter jets, missiles, smartphones, computers and electric vehicles. It is claimed that more than 30% of the deposits of these 17 ores, known as Rare Earth Minerals, are in China. China has a share of more than 95% in the global production of Rare Earth Minerals. 80% of the Rare Earth Minerals required in the United States come from China.

After former US President Donald Trump started a political and trade conflict with China, indications had been received that China could use Rare Earth Minerals as a counter weapon. Because of these Chinese threats, the US defence department had submitted a report to the US Congress. The report explored various possibilities, options and proposals regarding Rare Earth Minerals. The statement demanded that expeditious moves should be made and possibilities in countries other than China should be explored to ensure that there is no shortage of these sensitive materials.

After that, in 2019, the US defence department, the state department and other agencies jointly prepared a proposal for Rare Earth Initiative. The United States informed that Australia, Brazil, Botswana, Peru, Argentina, DR Congo, Namibia, the Philippines and Zambia have agreed to join the Rare Earths Initiative. The Australian company’s selection for two Rare Earth Minerals projects is considered to be a part of the same initiative.