Trump Announces $12B Rare Earth Stockpile

Peter Zeihan 4 min

A $12 billion stockpile is insufficient because true independence requires building domestic processing infrastructure which currently lacks funding. Today, we are building the equivalent of a piggy bank that we still have to fill up.

Chapters

  1. 0:00

    The $12 Billion Stockpile Initiative

    The US government plans to use an import-export bank to finance a $12 billion stockpile of processed rare earth metals to create a buffer against supply cuts from foreign nations like China.

  2. 1:03

    The Insufficiency of Buying vs. Producing

    A $12 billion stockpile is insufficient for a $25 trillion economy and only lasts one to five months; true security requires building domestic processing infrastructure rather than just buying materials. Rare earth metals exist as impurities in other minerals and require hundreds of vats of acid over six months to a year to refine, making domestic production chemically tricky.

  3. 3:00

    The Lack of Domestic Infrastructure Investment

    While the technology is not new or technically difficult, the Trump administration has not yet put any money into building the necessary domestic infrastructure. The current initiative is merely building a piggy bank that still needs to be filled up rather than establishing actual production independence.

Key points

  • 0:00

    The United States doesn't refine most of its materials these days. It relies on countries that have much lower pollution concerns, like say China or India, to do the processing.

  • 1:03

    $12 billion of critical materials for a country that is a $25 trillion economy is not going to last a long time.

  • 1:03

    Probably somewhere between one and five months based on the specific material, because there are over 30 different materials that they're talking about here.

  • 1:03

    Rare earth metals exist as small, small impurities in other mineral extraction, primarily things like silver, but also copper and zinc and a lot of other things.

  • 1:03

    Basically, with every step, you concentrate the mineral that you're after, whatever it happens to be, and after six months to a year of such processing through acid, you eventually get some refined metal.

  • 1:03

    It takes several tons of raw material to generate one ounce of the finished metal over months of steps and hundreds of vats.

  • 1:03

    Unless and until the United States builds that infrastructure, which isn't technically difficult, it's chemically very tricky. Until you do that, you are never going to have independence from international suppliers.

  • 1:03

    There is nothing about this technology that is new. It was developed back in the 1910s and 1920s.

  • 3:00

    It does require space and it does require capital and does require planning, it does require infrastructure.

  • 3:00

    At the moment, the Trump administration has not put a dime into that effort.

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