Two U.S. government initiatives announced last month could go a long way toward securing our nation’s defense and our industrial future.
On Feb. 2, the administration proposed a roughly $12 billion plan to create a strategic reserve of rare earth minerals. Rare earths are a subset of critical minerals and comprise 17 metallic elements that are used to manufacture magnets essential for defense systems, automobiles, and electronics—making them important components for our national security and economy. The reserve will help reduce the likelihood of supply chain disruptions for these critical elements.
Surprisingly, rare earth elements are not really that rare. One element, cerium, is actually more abundant than copper. Rare earths are called that because there are only a few concentrations of them that are large enough to be mined economically, and they are difficult to mine and process.
The strategic mineral reserve will be modeled after the strategic petroleum reserve that was formed in 1975 to ensure that America would not face the shortages and long gasoline lines that occurred during the OPEC oil embargo. That reserve has an authorized storage capacity of 714 million barrels of oil, according to the Department of Energy. Since the reserve was established, the U.S. has never once been held hostage over this commodity that’s so important to our economy.
The other initiative, announced on Feb. 5, calls for the creation of a trading bloc for critical minerals among partner nations. The bloc will ensure stable prices and will provide members with access to financing as well as the critical minerals themselves.
The bloc seeks to counter the market influence that China currently holds over the sourcing of many of the minerals that are critical for manufacturing and defense. China has used its dominance in the past to manipulate the supply of critical minerals and price out any challengers. A trading bloc of friendly nations will provide that needed supply and ensure competition.
In addition to these initiatives, we need government incentives to encourage domestic mining and processing of our own available resource minerals. Many critical minerals are abundant within U.S. soil but are just too costly to extract and process.
I applaud these government moves to assure that no adversary can hold sway over the future of our manufacturing industries and the supply chains that support them. I also feel that the U.S. does not need to own everything. We just need to be able to know where to get the resources we need at a fair price from reliable friends.
