What China’s Ban on Rare Earths Processing Technology Exports Means

Overview:

This article was written by Gracelin Baskaran, focusing on the implications of China's recent ban on the export of rare earth extraction and separation technologies. 

• China's decision affects U.S. national, economic, and rare earth security, given that rare earth elements are crucial in defense and technology sectors.
• The U.S. has begun to address its vulnerability in this area through funding decisions to enhance domestic rare earth processing capabilities.

Key Quotes:

• "Rare earth elements—a group of 17 metals—are used in defense technologies, including missiles, lasers, vehicle-mounted systems such as tanks, and military communications."
• "The rollout of major export restrictions...should be a powerful signal to U.S. policymakers that...there is a significant need to both build domestic capabilities and leverage international cooperation.​

What They Discuss:

• China currently produces 60% of the world's rare earths and processes nearly 90%, giving it a near-monopoly in the market.
• The U.S. is particularly exposed to processing restrictions for heavy rare earths, with China separating 99.9% of them.
• Recent U.S. initiatives include a series of Defense Production Act (DPA) Title III awards and Department of Defense funding to build domestic rare earth separation and processing capabilities.
• Global reserves of rare earths are substantial, with significant percentages in Vietnam, Brazil, India, and Australia.
• The U.S. delay in developing processing capacity is a concern due to China's technical expertise in this area and the time required to operationalize new facilities.

What They Recommend:

• The U.S. Congress should incentivize the production of rare earth element magnets through tax incentives to promote domestic manufacturing.
• Building domestic capabilities and international cooperation is crucial for sourcing and developing processing capacity.

Key Takeaways:

• China's ban on rare earth technology exports highlights the strategic importance of these materials in various sectors.
• The U.S. is working to reduce its dependency on China by enhancing domestic processing capacity.
• International cooperation and diversification of rare earth sources are key strategies for ensuring national and economic security.
• The development of domestic processing facilities is essential but faces challenges in terms of technical expertise and operationalization timelines.

This is a brief overview of Gracelin Baskaran's work from the Center for Strategic and International Studies. For complete insights, we recommend reading the full article.