Department of the Interior, noted in a hearing before Congress in 2013: “Though REEs are currently of most concern to many, including the Department of Defense, it should be noted that in 2010 the United States was 100 % dependent on foreign suppliers for 18 mineral commodities and more than 50 % dependent on foreign sources for 43 mineral commodities,” most of which are REEs. At that time, the Pentagon had warned of increasing US demands for imports of critical rare commodities from China, which since the beginning of the last decade has developed into one of the most important suppliers of REEs and titanium precursors for the American defence industry. Although the consumption of REEs in the US and EU had fallen significantly since mid-2013, members of Congress in Washington had expressed their concern that the US could become “totally dependent” on China due to a lack of own production capacities. There are worrying reports that provide evidence that the PRC is using its strategic endowments to constrain global supply of selected REEs and other critical commodities. Beijing could use these resources to “monopolize” the manufacturing of advanced and efficient clean energy technologies. Since a couple of years, the PRC is consolidating its rare earth production industry to such an extent that a single state-owned company (Baotou Iron and Steel Group will have a monopoly on REE production in China’s main rare earth producing region – the Inner Mongolia Autonomous Region. Another factor is Russia. According to its 2008 Arctic strategy, Russia seeks to “maintain the role of a leading Arctic power.” One of the reasons is the vast number of mineral resources in addition to “nearly inexhaustible” oil and gas resources. However, Russian Prime Minister Dmitry Medvedev has ample reason to conclude that the Arctic and Subarctic offers more potential risks than anticipated. These regions are emerging as the world’s hot spots for oil and gas developments. To Moscow’s leaders, it seemed clear that Russia – holding a third or even a quarter of the world’s gas reserves – could dictate conditions on accessing this indispensable resource to the West (and to China) for the decades to come, guaranteeing Shortfalls in strategic and critical raw materials are about to become normal in the 2020s. Evolving Crises The availability of strategic elements is at risk. One figure tells the situation before the beginning of the Coronavirus pandemic: the People’s Republic of China (PRC) supplied 94 % of the global Rare Earth Elements (REEs) and produced over 70 % of the world’s REE components and products in 2019. The European Commission warns that a “nearly total” European dependence upon China for REEs, including oxides, phosphors, metals, alloys and magnets, could result in shortages in the 2020s. Statements by the European Commission, which has published the “2020 EU Critical Raw Materials List,” come to the conclusion that the PRC is the largest supplier of many of the most critical raw materials, including REEs but also titanium, vanadium and scandium. The principal finding was that the demand for nearly every mineral commodity is rising, with three grouped materials – ten individual heavy rare earth elements REEs, five light REEs and five platinum-group metals (PGMs) – achieving extra growth in recent years. The defence industry in the European Union (EU) is almost 100 % reliant on imports for most of them. This will be the situation in 2023 and in the years to come. Deciphering the Forgotten Dilemma Again, the PRC is the world’s largest supplier of REEs. Until at least the early 2030s, the Chinese could likely challenge the United States and the EU to demonstrate their inability to motivate industry to invest in new mining projects, thus creating additional production capacities through the respective national raw materials strategies. This situation is not new. Marcilynn Burke, Deputy Director, Bureau of Land Management, Stefan Nitschke Dependence of Strategic and Critical Raw Materials May Soon Replace Today’s Dependence on Oil, Says the European Commission What Lessons are to be Learned? 16 · MT 2/2023 Hot Spots
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