A two-piece piece of legislation to be introduced in the US Senate will force defense contractors to stop buying rare earths from China by 2026 and use the Pentagon to create a permanent supply of the strategic minerals.
The bill, sponsored by Senators Tom Cotton, a Republican from Arkansas, and Mark Kelly, an Arizona Democrat, is expected to be introduced Friday, the Reuters news agency reported. This is the latest in a series of US legislation that seeks to stem China’s almost total control across the sector.
It essentially uses the Pentagon’s billion-dollar purchase fighter jets, missiles and other weapons as leverage to require contractors to stop relying on China and, by extension, support the revival of U.S. rare-earth production.
Rare earths are a group of 17 metals which, after processing, is used to make magnets found in electric vehicles, weapons and electronics. While the United States created the industry in World War II and US military scientists developed the most widely used type of rare-earth magnet, China has grown slowly to control almost the entire sector over the past 30 years.
The United States has only a rare earth mine and has no capacity to process rare-earth minerals. The US relies on China for about 80 percent of its scarce-earth imports.
In December, China consolidated several of its key producers to create a sphere that will strengthen his control over the global industry he has dominated for decades.
The new entity, China Rare-Earths Group, will accelerates the development of mines in the country’s south, state media reported.
“The end of US dependence on China for the exploitation and processing of rare earths is critical to the build-up of the US defense and technology sectors,” Cotton told Reuters.
The senator, who sits on the Senate’s Armed Forces and Intelligence Committees, describes China’s evolution in the global rare earth leader as “simply a policy choice made by the United States,” adding that he hopes new policies would loosen Beijing’s grip.
In the past, the US has worked with other nations at the World Trade Organization to try to force China to export more rare earths amid a global shortage.
Known as the 2022 Essential Energy and Security Holdings Onshore for Rare Earths Act, the bill will codify and make permanent the Pentagon’s ongoing inventory of materials. China temporarily blocked rare earth exports to Japan in 2010 and issued vague threats that it could do the same to the United States.
To build that reserve, however, the Pentagon buys stock partly from China, a paradox that Senate staff hope will diminish over time.
The rare earths production process can be highly polluting, part of the reason why it became unpopular in the United States. Ongoing research seeks to make the process cleaner.
Cotton said he had spoken to several U.S. executive agencies about the bill, but declined to say whether he President Joe Biden or the White House.
“This is an area in which Congress will lead, because many members were concerned about this very topic, regardless of the party,” he said.
The bill, which sponsors expect to be incorporated into Pentagon funding legislation later this year, offers no direct support for the burgeoning U.S. rare-earth sector.
Instead, it requires Pentagon contractors to stop using Chinese rare earths within four years, allowing exemptions only in rare situations. Defense contractors would be required to say immediately where they obtained the minerals.
Those requirements “should encourage more domestic [rare-earths] development in our country, ”Cotton said.
For the past two years, the Pentagon has given grants to companies trying to resume US rare-earth processing and magnet production, including MP Materials Corp. Australia’s Lynas Rare Earth Ltd, TDA Magnetics Inc and Urban Mining Co.
Kelly, a former astronaut and a member of the Senate Armed Services and Energy Committees, said the bill should “strengthen America’s position as a world leader in technology by our country’s dependence on adversaries like China for rare earth. reduce elements “.
The bill only applies to weapons, not other equipment the US Army buy.
In addition, the US Trade Representative will be required to investigate whether China distorts and recommends the rare earth market. trade sanctions required.
Asked if such a move by Beijing could be seen as antagonistic, Cotton said: “I do not think the answer to Chinese aggression or Chinese threats is to subject us to Chinese threats.”