CRITICAL MINERALSThe U.S. Needs to Ditch Its America-First Approach to Critical Minerals
More and more countries with advanced economies have begun to prioritize the supply and value chains for critical minerals and rare-earth elements because of their links with advanced and low-emissions technologies. In some countries, governments have responded to the critical minerals challenge by adopting a new version of economic nationalism. But unilateral responses will not produce secure or reliable supply chains. Indeed, economic nationalism may actually aggravate the problem.
Over the past few years, Covid-19, climate change and Chinese economic coercion have catalyzed rapid global economic, foreign relations and national security policy changes. In Australia, the public discourse on sovereignty, national capacity and secure supply chains is one area where this change is particularly evident. These discussions have more recently prioritized the supply and value chains for critical minerals and rare-earth elements because of their links with advanced and low-emissions technologies.
In some countries, these policy challenges have given rise to responses based on a new version of economic nationalism. Sovereign critical mineral and rare-earth resilience is beyond the reach of any one country. Unilateral responses will not produce secure or reliable supply chains. Indeed, economic nationalism may actually aggravate the problem.
A critical mineral is a metallic or non-metallic element that is essential for modern technologies, economies or national security and has a supply chain at risk of disruption. Geoscience Australia lists 26 critical minerals ranging from graphite to magnesium.
The rare earths are a subset of critical minerals and comprise 17 metals—15 elements from the lanthanide series and two chemically similar elements, scandium and yttrium. All have unique properties that make them vital for various commercial and defense technologies, including batteries, high-powered magnets and electronic equipment.
Chinese economic coercion and ham-fisted domestic policy have highlighted the risk of disruption to global rare-earth and critical mineral supply chains.
Chinese foreign ministry spokesperson Zhao Lijian was right when he said: ‘No one should use the economy as a political tool or weapon, destabilize the global industrial and supply chains or punch the existing world economic system.’ Yet that is precisely what the Chinese Communist Party has been doing for the past decade with rare earths.
In 2010, the CCP effectively restricted rare-earth exports to Japan after a Chinese fishing trawler collided with a Japanese coastguard vessel near the disputed Senkaku Islands.
More recently, it threatened to limit rare-earth supplies to US defense contractors, including Lockheed Martin, over US arms sales to Taiwan.
But the problem isn’t just about economic coercion; the CCP’s domestic policy has had other serious consequences. In 2021, the central government began actively monitoring energy consumption across China. Later that year, Shaanxi province fell victim to the country’s ‘double control’ when it failed to meet energy consumption targets. The CCP swiftly shut down high-energy-intensity industries, including aluminum production. An international supply crisis ensued, and prices have soared.