During a tempestuous moment in the ongoing trade war between the world’s two biggest economies, the Chinese government last October threatened to exercise its most potent economic leverage by\u00a0ending exports<\/a>\u00a0of rare-earth minerals.<\/p>\n

The bold move got results. The Trump administration, which had earlier threatened tariffs as high as 130 percent on Chinese goods, agreed to cut tariffs and ease tech export restrictions from the U.S. to China. In exchange, China\u00a0said<\/a>\u00a0it would hold off on limiting rare-earth exports for at least a year.<\/p>\n

The incident\u2014and the ongoing threat embedded in its resolution\u2014highlighted China’s strategic control over rare earths, the collective name for\u00a017 different heavy metals<\/a>\u00a0essential to many aspects of modern computing technology. China\u00a0mines 60 percent of the global supply<\/a>\u00a0of rare earths and processes 80 percent.<\/p>\n

In an attempt to break China’s\u00a0hold on the global market<\/a>\u00a0for this vital resource, the Trump administration is now spending millions to spur the development of new rare-earth processing facilities in Texas and California, and is also seeking partnerships with Australian mines.<\/p>\n

That response flows from the widespread belief that Chinese dominance of rare-earth minerals is the result of a market failure.<\/p>\n

“The market fundamentalists argue that government should not be picking which industries to support,” Marco Rubio, now the secretary of state, explained in\u00a0a 2019 speech<\/a>. “But what happens when an industry is critical to our national interest, yet the market determines it is more efficient for China to dominate it? The best example of this is rare-earth minerals.”<\/p>\n

That view ignores the government’s own role in sabotaging America’s production of rare-earth metals\u2014a market that\u00a0the United States dominated until the 1980s<\/a>.<\/p>\n

Permitting is a major problem. It takes seven to 10 years for a new mine to obtain the necessary permits in the United States, compared to an average of two years in Canada and Australia,\u00a0according to<\/a>\u00a0the Essential Minerals Association (EMA), an industry group. An S&P Global\u00a0study<\/a>\u00a0published in 2024 found that it took American mines an average of 29 years to go from discovery to production\u2014the\u2028second-longest period in the world behind Zambia.<\/p>\n

Those delays often stem from the fact that a single mine requires approval from multiple federal and state agencies with overlapping and duplicative regulatory requirements. The EMA estimates that permitting delays add more than $1 billion to the development of major mining projects.<\/p>\n

As a result, much of America’s abundant supply of rare earths\u2014which are actually not all that rare, despite the name\u2014remains untapped. Round Top Mountain, in West Texas, contains the largest deposit of rare earths in the U.S., but a mine there has been in development since the 1980s and is\u00a0now aiming to be open by 2028<\/a>. Other projects in California and Utah are similarly tied up in permitting delays.<\/p>\n

Breaking China’s hold on the rare-earth supply chain doesn’t require the federal government to pick winners and losers. Instead, it should just get out of the way.<\/p>\n

The post Blame U.S. Regulations for China's Dominance in Rare-Earth Minerals<\/a> appeared first on Reason.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

America once dominated the rare-earth market, but permitting requirements are holding the industry back. …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":""},"categories":[19,9,161],"tags":[],"_links":{"self":[{"href":"http:\/\/3rdcitynews.com\/news\/wp-json\/wp\/v2\/posts\/126061"}],"collection":[{"href":"http:\/\/3rdcitynews.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/3rdcitynews.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/3rdcitynews.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/3rdcitynews.com\/news\/wp-json\/wp\/v2\/comments?post=126061"}],"version-history":[{"count":0,"href":"http:\/\/3rdcitynews.com\/news\/wp-json\/wp\/v2\/posts\/126061\/revisions"}],"wp:attachment":[{"href":"http:\/\/3rdcitynews.com\/news\/wp-json\/wp\/v2\/media?parent=126061"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/3rdcitynews.com\/news\/wp-json\/wp\/v2\/categories?post=126061"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/3rdcitynews.com\/news\/wp-json\/wp\/v2\/tags?post=126061"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}