Why rare earths are a Five Eyes hot topic – Newsroom

Credit: Original article can be found here

Foreign Affairs

Rare-earth elements are in hot demand for manufacturers of EVs, cellphones and solar panels – but with one country responsible a majority of the materials’ exports, there are suggestions New Zealand and others need to team up to secure their own supply

Analysis: Over 16,000 kilometres away from New Zealand as the crow flies, Greenland understandably features little in foreign policy discussions on our shores.

But it is the abundant minerals and rare earth metals on the world’s largest island that have sparked calls for New Zealand, along with the other members of the Five Eyes intelligence alliance, to pay greater attention to the autonomous territory and its geostrategic significance. 

A report released this month by the London-based Polar Research and Policy Initiative think tank has mooted the creation of a ‘Five Eyes Critical Minerals Alliance’, in large part due to concerns about Chinese dominance within the sector.

It may seem an obscure issue, but there are very tangible fears driving the argument for greater attention.

Rare-earth elements like cerium and lanthanum have become increasingly important as countries turn towards low-emissions technologies, given their use in components for electric vehicles, solar panels and wind turbines, as well as everyday items like cellphones and computers.

Despite their widespread and rapidly growing use, the minerals are overwhelmingly produced in and exported from just one country.

China was responsible for over half of the world’s production of rare-earth elements in 2020, according to the United States Geological Survey, while it was the source of about 80 percent of imports to the US between 2016 and 2019.

That reliance on a single source of rare earths has caused concern about a lack of diversification within supply chains – a worry exacerbated by the Great Power rivalry between China and the US and associated trade war.

An article by the CCP-owned Global Times last month responding to the FT report dismissed claims China’s rare-earth exports to the US had been restricted, while simultaneously warning such a move could be taken in future against “foreign companies that hurt China’s interests”.

Last month, the Financial Times (FT) reported claims that China was exploring whether it could damage US defence contractors by limiting the export of rare-earth minerals used in the production of F-35 fighter jets and other sophisticated weapons.

The article followed the Chinese government’s decision to start consultation on new, tighter regulations around the mining and export of the minerals within the country.

An article by the CCP-owned Global Times last month responding to the FT report dismissed claims China’s rare-earth exports to the US had been restricted, while simultaneously warning such a move could be taken in future against “foreign companies that hurt China’s interests”.

The country has taken similar action in the past: in 2010, it was accused of effectively banning rare-earth exports to Japan following a territorial dispute between the two nations (whether such a ban did take place is somewhat disputed, while then-Chinese Premier Wen Jiabao said at the time “China does not and will not use rare earths as a bargaining tool in international trade”).

At the time, the dispute led several countries to begin exploring alternative sources of rare earths, and similar work is taking place now.

Shortly before last year’s presidential election, then-US President Donald Trump issued an executive order intended to boost domestic mining and processing of the materials, while Australian Prime Minister Scott Morrison last week launched a 10-year plan to increase production within the country, which had the second-highest level of exports behind China in 2020.

But the Polar Research and Policy Institute report has encouraged the countries to think further afield, saying: “The relative abundance of several critical minerals, including rare earth elements, in Greenland, offers the US and its allies the opportunity to reduce their dependence on China for resources essential to their defence and security, renewable energy and high-tech sector needs and, thus, to enhance their resource security and strategic competitiveness.”

According to the report, 27 of the 41 companies with mineral exploitation, exploration and prospecting licences in Greenland are “headquartered in, listed in or substantially connected to the UK, Canada and Australia”.

‘Decoupling’ discussions

While it notes that New Zealand “do not appear to have been as active … in critical minerals projects in the wider North”, it says the country’s “outward-looking mining sector and growing technical expertise in critical minerals research” would make it an important partner in a Five Eyes minerals alliance.

The Government here has paid some attention to the issue of rare earths and other critical minerals and their value to New Zealand.

In 2018, Energy and Resources Minister Megan Woods said a GNS Science study showing the potential to mine lithium, rare earth elements (REE) and nickel-cobalt deposits within New Zealand “represent[ed] a real economic opportunity for New Zealand”.

In a 10-year strategy document released in 2019, the Government also committed to producing a list of critical minerals for the country. A government spokeswoman told Newsroom the list was “in its conceptual stages” and would provide a better understanding of domestic needs, while a range of organisations were pursuing research into how the minerals or elements could be extracted or processed into a useable form and integrated into new technology.

There appears to be little enthusiasm for the idea of any foray into Greenland, or an expansion of Five Eyes to cover minerals: a spokesman for Foreign Affairs Minister Nanaia Mahuta referred Newsroom to the Ministry of Foreign Affairs and Trade, which in a brief statement said it was “not aware of any multilateral initiative in response to the issues raised”.

Given New Zealand’s seeming reluctance to expand the scope of Five Eyes beyond an intelligence-sharing relationship to a broader geopolitical alliance, it is little surprise there is no overt enthusiasm for the concept.

The idea is not an entirely new one, however: in July, the Guardian reported centre-right politicians from the UK and Australia were interested in “pooling” key strategic reserves like critical minerals to reduce dependence on China.

Given broader concerns about supply-chain diversification and a push for “decoupling” from some critics of Beijing, it is unlikely to be the last New Zealand hears of the concept either.

Categories: Uncategorised