A recent report highlights a pressing issue for the Five Eyes intelligence alliance—the United States, the United Kingdom, Canada, Australia, and New Zealand. This critical alliance, known for its intelligence-sharing and security collaboration, is heavily reliant on China for rare earth elements (REEs). This dependence exposes the Five Eyes countries to significant risks, especially in the context of military and technological supply chains.
The Critical Role of Rare Earth Elements
Rare Earth Elements (REEs) are essential for a wide range of applications, including military technology and consumer electronics. They are used in:
- Military Equipment: Fighter jets, missile systems, and advanced surveillance.
- Consumer Electronics: Smartphones, digital cameras, and flat-screen TVs.
China’s Dominance:
- Global Production: China controls approximately 60% of global REE production.
- Processing Power: Nearly 90% of REE processing occurs in China.
Key Issue: The Five Eyes alliance’s reliance on China for REEs puts their military and technological capabilities at risk. The situation is especially concerning given China’s ability to leverage its market dominance for political and strategic advantages.
Report Findings: Over-Reliance on China
The report, titled “Decreasing Rare Earths Dependency: How the Five Eyes Alliance can Minimize Rare Earths Trading Risk with China,” outlines the dangers of this dependence. It argues that the Five Eyes countries must diversify their REE supply chains to mitigate risks.
Key Findings:
- U.S. Dependence: The United States imports up to 80% of its REEs from China.
- Vulnerability: Western military supply chains are susceptible to Chinese export restrictions.
- Strategic Leverage: China could use its control over REEs to influence or pressure Western countries, particularly in times of conflict.
Quote from the Report: “The Five Eyes countries are dangerously exposed to China when it comes to rare earth minerals, as they are all over reliant on China for this critical resource.”
China’s Strategic Moves and Implications
China’s market dominance isn’t just about economic power; it also has geopolitical implications. The country has previously demonstrated a willingness to use its control over REEs to exert political pressure.
Recent Developments:
- Export Restrictions: In 2023, China considered limiting REE exports crucial for F-35 fighter jets and other military technologies.
- Military Readiness: Admiral John Aquilino, leader of the Indo-Pacific Command, testified that China is working towards its goal of being ready to invade Taiwan by 2027, highlighting the urgency for Western countries to reassess their dependencies.
Potential Risks:
- Supply Shortages: In a conflict scenario, China could cut off REE supplies, severely impacting military and technological capabilities.
- Strategic Manipulation: China’s ability to influence global markets could undermine Western strategic interests.
U.S. and Allied Responses
Recognising these vulnerabilities, the U.S. and its allies are taking steps to reduce their dependence on China. These initiatives aim to bolster domestic production and develop alternative supply chains.
U.S. Initiatives:
- Department of Energy Investment: In April, the Department of Energy announced a $17.5 million investment to support projects that will lower REE extraction costs and reduce environmental impacts.
- Bipartisan Infrastructure Law: This funding is part of President Biden’s plan to enhance national security and revitalise domestic manufacturing.
International Collaboration:
- Five Eyes Alliance: The report underscores the need for enhanced cooperation among Five Eyes countries to build alternative REE sources and reduce China’s influence.
Quote from Secretary of Energy Jennifer Granholm: “The investments announced will increase our national security while helping rebuild America’s manufacturing sector and revitalize energy and mining communities across the country.”
Lessons from Europe’s Energy Dependence
The situation mirrors Europe’s past reliance on Russian gas before the Ukraine invasion. The report suggests that without significant changes, Western countries could face a similar strategic vulnerability.
Key Takeaway:
- Diversification: The only viable solution is for the Five Eyes Alliance to diversify their REE sources, similar to how Europe sought alternatives to Russian energy.
Recommendations:
- Domestic Production: Increase REE mining and processing within allied countries.
- Alternative Suppliers: Explore partnerships with other nations to source REEs and reduce reliance on China.
Conclusion: A Call for Action
The report on the Five Eyes alliance’s reliance on China for rare earth elements presents a clear and urgent call for action. The heavy dependence on China not only threatens military readiness but also exposes Western countries to significant geopolitical risks.
Key Points:
- Dependency Risks: Over-reliance on China for REEs creates vulnerabilities in military and technological supply chains.
- Strategic Actions: The Five Eyes countries must invest in domestic REE production and seek alternative suppliers to mitigate these risks.
By addressing these vulnerabilities through increased collaboration and strategic diversification, the Five Eyes Alliance can better protect its interests and maintain global security.
