China’s 'Rare Earths': A Threat To America's Strategic Standing

Minerals have always been one foundation of American greatness. The iron and coal mines of Pennsylvania, oil wells of Texas, and copper, silver, and gold mines of the west allowed us to create the industries that made America the most powerful country in the 20th century. But America’s strategic future now hangs in the balance.

The great innovators (and job creators) of the early 1900s, such as Edison and Ford, stood on the shoulders of the great miners of the late 1800s, such as Carnegie and Rockefeller. Victories in two world wars would not have been possible without access to the elements -- iron, copper, nickel, etc. -- from which our military might was built.

After WWII, we reached beyond our shores to establish alliances with mineral-rich nations in the Middle East and elsewhere to guarantee our strength and continued growth. Twentieth century military might was due to both our innovations and our control over the raw materials essential to them

Over the last 40 years America seems to have forgotten this. As a result, today the nation winning the battle for global control of the elements that will determine which nation will be the greatest in the 21st century is China.

The inventions of Edison, Ford, and Bell were in fact discoveries in the properties of the various elements on the periodic table. The table is populated with approximately 65 metals, each with its own unique alchemistic capabilities. The great inventions of the last century were possible because of copper’s ability to conduct electricity and iron and carbon’s ability to form structural steel.

The great innovations of the 21st century are no different, but they rely on very different metals, ones most Americans are unfamiliar with. For example, Bell’s national telephone system was possible because copper can transmit information electrically. Today’s fiber optic cables are possible because another metal at the very bottom of the periodic table, erbium, can transit information optically. Similarly, future generations of Ford’s automobile may not require either iron or oil, but they will most certainly require neodymium (electric motors) and lanthanum (batteries). Erbium, neodymium, and lanthanum are 3 of 14 elements collectively called the rare earths. The rare earths are essential to everything from modern automobiles, cell phones, televisions, and jets to countless military applications. Every Prius has 15 pounds of rare earths in it.

While the U.S. was the dominant producer of raw materials in the last century, China today controls nearly 100% of global production of rare earth metals. That’s right, nearly 100%.

Besides developing its domestic sources, China has built deep financial and political ties --- as we once did -- with nations around the world holding significant strategic metal reserves. It has invested billions in mineral-rich Africa alone. It is the underpinning of their foreign policy. While the U.S. continues to treat Africa as a post-colonial charity case, China’s much more forward thinking view of the continent is as a partner and important depository of strategic metals.

Our political leaders tell us the way out of our current financial crisis is through American innovation. But what if we are unable to participate in the next great American discovery simply because this time we don’t control the necessary raw materials? The millions of jobs flowing from these inventions would blossom where the materials are available. Today that place is China.

Even more threatening in the short term, China can at any moment easily challenge our military might by simply refusing to ship rare earths to America. U.S. high tech manufacturing would grind to a halt within months. This includes production of bulletproof vests (yttrium), night vision goggles (gadolinium), and the guidance systems on rockets, drones, and tanks (erbium, neodymium).

Would China actually use the threat of discontinuing U.S. rare earth shipments as a political weapon? It already has.

China did so to Japan 13 months ago. In October 2010, Japan arrested a fishing boat captain who wandered near islands in the East China Sea that both nations claim sovereignty over. In response, China instructed its customs offices to stop shipping rare earths to Japan. Within hours Japan released the captain. Japan knew it was out of business without rare earths.