By Jeffrey A. Newman Esq. MBA
The United States and China are competing heavily in searches for investments in rare earth minerals in Latin America since China when China choked off our supply of the minerals in April of this year. The U.S. has a need for the rare earth minerals used in our fighter jets, electronics, high tech goods, oil refining, and our radar and missile guidance. Their unique magnetic and catalytic properties make them essential for medical equipment. Before April most of the rare earth minerals needed by the US were purchased from China.
China presently has an 85% monopoly on the processing and refining of rare earth minerals. On April 4, China’s Ministry of Commerce imposed export restrictions on seven rare earth minerals and magnets used int he defense , energy and auto sectors in response to tariff increases on Chinese products. This requires comanies to secure a special export license to export these minerals and magnets. These restrictions have caused significant disruption with auto makers and manufacturers in defence and high tech are facing shortages in their inventories.
As a result, the search for the rare earth minerals in different parts of the world including within the U.S. has increased. Canada has substantial rare earth minerals and is advancing in its mining and processing of rare earths but so far, the U.S. and Canada haven’t mended fences. The U.S. search is now focused in Latin America but China has already agressively become the top investor and trade partner in mineral sector across Latin America.
The Litium Trangle, which includes Chile, Bolivia and argentina contrains more than half the world’s reserves of lithium, more than a third of itts copper and nearly one fifth of nickel and smaller reserves of Cobalt, Titanium, and Zinc. China is presently surpassing the U.S. as the regions top trading partner and has established free trade agreements with a number of Latin America countries including Venezuela and Chile. It has invested billions of dollars in long term trading projects in Argentina and Peru through Tianqi Litium, Zijin Mining Group. Now, U.S. companies and our government agencies are supporting rare earth mineral exploration and minimg projects in Brazil and Chile. U.S. companies such as MP Materials and Energy Fuels are establishing partnerships and processing arrangements using Latin America Resources, with plans of expansion rare earth manufacturing. In July, the Department of Defense announced a multibillion dollar public private partnership with MP Materials to build a secure supply of rare earth minerals.
While the U.S. need for the rare earth minerals continues strategic efforts to eliminate our need to buy rare earths from China are advancing swifly. In addition, the U.S.Department of Defense is now reconsidering its needs to better meet the needs of national security with a focus on autonomous systems, cyberweapons, networked technologies, and AI-driven capabilities. So too the DOD is addressing concerns about cost and operational inflexibility inherent in the legacy systems. The question is now being asked: what affordable effective defense systems should be fund based on what our needs are?
Jeffrey Newman Law is a whistleblower law firm representing whistleblowers reporting violations of export controls, tariff evasion and other kinds of WB cases. The firm website is www.JeffNewmanLaw.com . Attorney Newman can be reached at Jeff@Jeffnewmanlaw.com or at 978-880-4758
