HONOLULU—In China, the United States is facing “a strategic competitor that offers a new level of challenge,” and must move quickly to close gaps in manufacturing and secure access to critical minerals, the assistant defense secretary for industrial base policy said.
“When you look at China, they have 30 percent of global manufacturing to our 17 percent,” Mike Cadenazzi said last week at NDIA’s Pacific Operational Science and Technology conference. “China is arguably 200 times our shipbuilding capacity. And there are estimates that with full mobilization, China’s overall manufacturing capacity compared to the U.S. is many, many times our manufacturing.”
One of the key challenges, Cadenazzi said, is China’s control of many critical minerals, often called rare earths.
The minerals aren’t actually rare, he said, “they’re just incredibly dirty to process. So it’s black magic, is the way some of my team described the chemistry in terms of how you turn this stuff” from raw materials “into something that’s useful.”
After the Cold War, he said, “we took our hard-won science and our world-leading investments in technologies. And we said, ‘Here China, why don’t you do this?’ We did because we didn’t want to pollute, and that’s fair. But as a result…we lost two generations of scientists and engineering and business to learn how to go do this better.”
Instead of developing a way to make it cleaner and better, “we wound up 95 percent dependent on China for rare earths…and as a result, I now have a periodic table of elements on the wall next to my desk that I look at every day,” Cadenazzi said, adding that he was woken up that very morning by a “mean phone call from the White House” about minerals.
“We’re doing this because we have to do it,” he said. “We’re in a global competition for these minerals, for these capabilities.”
China produces about 70 percent of rare earths globally and processes about 90 percent, Fortune has reported. But the United States has made significant investments into refining and processing minerals, and in October, announced a “framework for mining and processing critical minerals and rare earths” with Australia.
Other countries are also working to increase production and refinement of minerals. Next week, Almonty Industries, a company headquartered in Canada, will mark the completion of a new processing plant at a South Korean tungsten mine that, it says, will allow it to “soon meet about 40 percent of global tungsten demand outside of China” and “break China’s near-monopoly on the global tungsten market,” a spokesman for the company said.
Cadenazzi said the investments and effort the Defense Department has made “represent the scale of [the] challenge: a billion dollars direct investment, nearly, and then commitments to buying rare earths, billions of dollars in the National Defense stockpiles, $5 billion from Congress within the industrial base fund to go ahead and invest in mineral deals,” and more, he said. “Billions of dollars of investment into solving what is a national-security problem, and it’s based on the sound set of logic that we can go ahead and work together in an organized way to actually meaningfully make a difference.”
Read the full article here