CPT Gustavo Ferreira and MAJ Jamie Critelli – “China’s Global Monopoly on Rare-Earth Elements”

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Released 4 April 2022. This article delivers a novel economic analysis of US dependence on China for rare-earth elements and sheds light on how Western nations may exploit the limitations of limit pricing to break China’s global monopoly in rare-earth element production and refinement. This analytical framework, supported by a comprehensive literature review, the application of microeconomic and industrial organization concepts, and two case-study scenarios, provides several policy recommendations to address the most important foreign policy challenge the United States has faced since the end of the Cold War. Click here to read the article. Episode Transcript: Stephanie Crider (Host) Welcome to Decisive Point, a US Army War College Press production featuring distinguished authors and contributors who get to the heart of the matter in national security affairs. The guests in speaking order on this episode are: (Guest 1 Gustavo Ferreira) (Guest 2 Jamie Critelli) (Host) Decisive Point welcomes Captain Gustavo Ferreira and Major Jamie Critelli, authors of "China’s Global Monopoly on Rare Earth Elements,” featured in the Parameters Spring 2022 issue. Ferreira holds a PhD in agricultural economics from Louisiana State University. He’s a senior agricultural economist with the US Department of Agriculture and serves as an agricultural officer at the 353rd Civil Affairs Command, US Army Reserves. Critelli is a civil affairs officer serving in the 353rd Civil Affairs Command, US Army Reserves. He’s an independent farm business owner and has worked globally in agriculture supply-chain rules on five continents. He holds a master of business administration and supply chain management from ETH Zurich. The views and opinions expressed in this podcast are those of the authors and are not necessarily those of the Department of the Army, the US Army War College, or any other agency of the US government. Gustavo [and] Jamie, thanks for joining me. Let’s jump right in. Your article sheds light on how Western nations may exploit the limitations of limit pricing to break China’s global monopoly on rare-earth element production and refinement. What’s the working definition of “rare earth elements” here? (Ferreira) Good morning, Stephanie. Thank you for having us. So rare-earth elements are a set of 17 different metallic elements that fall into two different categories. You have the heavy and the light based on the separation process (once they get mined and get processed), which tends to be rather complex. And contrary to what the title suggests, rare-earth elements are abundant in the Earth crust. They have their rarity status coming from being typically highly scattered and mixed together with other minerals, and they're rarely found in concentrations that make it profitable to extract. Oftentimes, they are a byproduct of other mining activities. It's important to understand rare-earth element reserves tend to be geographically more concentrated than other natural resources, such as oil and gas, but they're also in line with other key mineral resources, such as copper, where they're concentrated in one or two countries at the global scale. In terms of uses, it's important to highlight they’re desired because they have unique characteristics, such as magnetic strength, and, consequently, they’re used in a wide range of ubiquitous consumer goods, such as flat-screen TVs and cell phones. Other important industrial applications include wind turbines and electrical vehicles. And one that's typically a very visible application of this resource is in the military space. These minerals are key inputs for many weapons systems, such as jet fighter engines, missile guidance systems, satellites, ammunition, and so on. It’s always good to put a number on it to emphasize the current demand for these inputs. An F135 fighter jet (engine) requires about 920 pounds of rare-earth minerals—just to put it into perspe...

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