Reimagining US rare earth production: Domestic failures and the decline of US rare earth production dominance – Lessons learned and recommendations

Abstract

China has dominated the global production of rare-earth elements (REE) since the 1990s. This market dominance is often described as a Chinese victory over competitors—particularly the US—in a geopolitical contest, since REEs are critical components of numerous advanced technologies, including military systems, that great powers compete to control. However, this geopolitical explanation for recent trends in global REE market fails to account for domestic factors—technical, economic, political, and environmental—that significantly impact the exploitation of geologic resources. This paper assesses the causes of decline in US REE production, which facilitated China's domination of the global market. We show that the failure of the US REE production was primarily caused by domestic factors, including misalignment between the US government and corporate interests. At a time when the China-US competition for REE production is seen not only as an economic contest, but also as a matter of national and international security, we argue that strategic cooperation between China and the US could effectively diversify and improve the resilience of REE supply chains and mitigate economic and national security risks associated with potential future disruptions.