The rare earths crisis requires more than free markets
By: Jeffery A. Green
09 March 2021
A recent opinion piece from the Wall Street Journal’s editorial board wrongly argues the rare earth minerals crisis isn’t as bad as many claim and that markets alone will solve issues associated with China’s dominance. Unfortunately, the editorial glosses over China’s ability to cut off supplies; provides misleading information on China’s current and future involvement in rare earth production; inappropriately argues the U.S. can meet its defense needs in the event of an embargo; offers a knee-jerk assessment of rare earth mining and processing as environmentally destructive; and ignores the national security implications of an entirely market-driven approach.
This sort of counternarrative has stifled the development of a complete rare earth supply chain over the last decade, and will only scare and confuse the government and markets moving forward.
First, to say that China’s global share of rare earth production is “on the wane” is both misleading and ill-informed. There has only been a small decline in their dominance of rare earth oxide production, which ignores the critical downstream capabilities required to bring products to market, such as rare earth metals, alloys and magnets — products where China dominates and, in some cases, maintains nearly a total monopoly on production. Such a gap in supply chains exposes the U.S. to various national security risks, which makes oxide production gains far from a panacea.