At a meeting several days ago, officials from the U.S. and Mongolia discussed devising innovative approaches to ensure the smooth entry of essential minerals from the landlocked Mongolian nation into the global market, namely for materials for rare earth magnets. Following his meeting with U.S. Vice President Kamala Harris in Washington, Mongolian Prime Minister L. Oyun-Erdene told Reuters that Mongolia planned to intensify its collaborative efforts with the U.S. in the realm of mining. The country would specifically target rare earths, rare earth magnets, and other minerals integral to advanced technologies.
The two parties also delved into strategies for advancing the objectives laid out in a memorandum of understanding. The memorandum stemmed from a June collaboration between the U.S. State Department and Mongolia’s Ministry of Mining and Heavy Industry. This could potentially make way for a new source of rare earths for the U.S. to produce rare earth magnets, which could add strength to rare earth prices (see MetalMiner’s price forecasting track record).
United States Hopes to Support Mongolia Despite China
Experts feel that the visit has significant implications for the ongoing geopolitical rivalry between China and the U.S. Presently, China occupies a commanding position in the rare earth market. Indeed, the country not only boasts substantial natural reserves, but also significant expertise in the refinement and extraction of these vital elements.
According to a U.S. State Department spokesman quoted by Reuters, the discussions focused on specific areas where the U.S. could assist Mongolia in comprehending its resource potential. They also touched on methods for extraction and avenues for production. The spokesperson added that the U.S. would support Mongolia in finding inventive solutions that empowered it to exercise greater control over mining, exploration, extraction, and production of critical minerals and rare earth elements.
This led to numerous inquiries into how the U.S. might facilitate the unimpeded exportation of such resources from Mongolia. This is prudent, given the country’s challenging geopolitical position. The spokesperson acknowledged the complexity and highlighted ongoing dialogue regarding strategies to make resources like rare earth magnets accessible to the market. These sourcing strategies are also highlighted in The 5 Biggest Cost-Saving Sourcing Tactics.
China and U.S. Race for Rare Earth Magnets and Copper
Despite commencing patent applications later than the U.S. and Japan, China now commands over 80% of all patents related to rare earths. In the first half of 2023, China undertook considerable ores and metals, including from the U.S. It later exported refined rare earths, primarily in the form of materials for rare earth magnets. China’s control over the supply chain coupled with its proficiency in refining and separating rare earths continues to give it a strategic upper hand.
China’s neighbor Mongolia also possesses vast reserves of copper. The reddish-orange metal is essential for numerous advanced technological uses, including certain defense apparatus. Meanwhile, the U.S., has an urgent need for both rare earths and copper for advanced technological applications, including defense systems. For this reason, the country has been trying to diversify its sources beyond its primary global competitor, China.
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