Marco Rubio Introduces Bill to Combat China's Rare Earth Monopoly

by Megan Henney (Fox Business) Sen. Marco Rubio introduced legislation on Thursday intended to boost American competitiveness in processing critical rare-earth minerals after China signaled it could weaponize its dominance in the sector in the midst of the year-long trade war.

The Florida Republican’s plan, named the RE-Coop 21st Century Manufacturing Act, would establish a privately funded operated and managed cooperative tasked with the creation of a fully integrated domestic rare earth value chain, according to a news release from Rubio’s office.

The cooperative would be exempt from antitrust laws in an attempt to protect it from mass government-backed production in China, according to the Wall Street Journal. Although it would be privately funded, Secretary of Commerce Wilbur Ross would need to secure a charter for the business, the Journal reported.

In a statement, Rubio blamed “mercantilist tactics” by the Chinese for the “market failure” of rare-earth development in the U.S.

“Continued U.S. dependence on China for the mining and processing of rare earths and the manufacture of those metals into useful products is untenable,” he said. “It threatens our national security, limits our economic productivity, and robs working-class Americans of future opportunities for dignified work.”

Rare earths, a group of 17 metals considered critical for multiple sectors in the U.S., including national defense, are used to produce a number of products ranging from smart phones, cameras and nuclear rods. While not actually rare, China accounts for more than 95 percent of global output, according to the U.S. Geological Survey.

At the end of May, amid inflamed trade tensions with the U.S., Beijing issued a thinly veiled threat that it was preparing to target exports of rare earth minerals, less than two weeks after President Trump blacklisted Chinese telecom firm Huawei.

State-run Chinese media, at the time, strongly implied that there could be a crackdown on rare earth sales to the U.S.

The U.S. has one rare-earth mine that’s currently in operation and it’s based in California. READ MORE

Excerpts from Bloomberg: Rare earths -- a group of 17 vital elements used in missile systems, electric vehicles, computer screens and other tech devices -- have been thrown into the spotlight after China signaled earlier this year that it may restrict shipments to the U.S. Mining companies in the U.S. have been hesitant to wade back into rare earths after a 2011 price collapse, compounding the challenge of cutting the nation’s reliance on China.

“It is in our interests to ensure that we have reliable supplies of these important minerals for technology, and it’s a conversation that our government is leading on,” (Canada Prime Minister Justin) Trudeau told journalists at the press conference. “Canada has many of the rare earth minerals that are so necessary for modern technologies.”

On May 2, U.S. officials and mining executives discussed the issue at a closed-doors meeting in Washington D.C. Among the speakers was Tesla global supply manager of battery metals Sarah Maryssael, who said booming demand for electric vehicles and insufficient investment in mines could result in a global shortage of minerals needed to manufacture rechargeable batteries in a few years’ time.

About half of the world’s electric vehicles are sold in China, and most components of the rechargeable batteries are manufactured there. The Asian nation controls about two-thirds of that industry, with Bloomberg NEF forecasting it could grow to about 73% by 2021. The U.S. controls only about 13% of the global lithium cell production capacity, with no growth expected, according to BNEF.

Marco Rubio Introduces Bill to Combat China's Rare Earth Monopoly

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