Report affirms U.S. reliance on China for rare earth metals could lead to supply chain disruptions

In September, China initiated an unofficial embargo of rare earth metals to Japan after a naval dispute in international waters. Now, a newly released report from the U.S. Energy Department affirms that the U.S. must find alternative sources of rare earth metals to ensure its supply chain continues to run smoothly.

Critical to the production of green products, electronics and cars, rare earth metals are an integral piece of the supply chain for myriad businesses in the U.S. The report predicts that it could take the U.S. upwards of 15 years to wean itself off of its dependence on rare earth metals from the Chinese, who account for more than 90 percent of the global supply.

Lately, China has favored its own companies over that of foreign competitors and is supplying them with the valuable minerals. The report avers that the U.S. reliance on China's supply is vulnerable to "supply disruptions and lack of suitable substitutes." Rare earth metals are critical to the production of green technologies like energy-efficienct lightbulbs and electric motors, and if China withholds them, the supply chain breakdown could result in a virtual stoppage of domestic production of those goods.

Aside from stopping production of current products, a halt in rare earth shipments from China could derail the adoption of new rare earth technologies by the clean energy industry, according to Dudley Kingsnorth, a rare earth mining consultant. Ultimately, the U.S. must find alternative sources of the precious materials to ensure that the supply chains of its businesses are not disrupted.