Recently, rare earth elements became prized commodities. This change has been fueled by a growing economic and national security imperative in the United States. Rare earths are actually made up of 17 distinct metallic elements. They are the backbone of multiple sectors of our economy, from our defense sector to commercial technology industries. The U.S. Geological Survey has identified these elements as “critical minerals.” This designation underscores their critical importance in defending and enhancing our nation’s infrastructure and security. In the wake of these changes, experts are turning their attention to Venezuela. This is a country rich in natural resources—even for example, an estimated 16 million metric tons of rare earth elements, whose total domestic deposits remain to be calculated.
The growing demand for rare earths has become a flash-point in the U.S.-China trade relations. In 2024, China accounted for over 90% of global rare earths refining, maintaining a near-monopoly on processing and refining these vital materials. This concentration has increasingly furthered alarmed the U.S. Government. Consequently, lawmakers are more concerned than ever about America’s dangerous dependence on imports for critical rare earth elements. China’s use of export controls as a retaliatory measure in trade spats has further strained the relationship. This action is a reminder of the fragility within U.S. supply chains.
The Importance of Rare Earths
Rare earth elements are cerium, dysprosium, neodymium, and samarium, just to name a few. These elements have become critical for high-tech applications, including electric vehicles, renewable energy systems, and other advanced military applications. Their special characteristics allow for the development of high-performance magnets, catalysts, and phosphors. This further demonstrates their critical role in pushing innovative technologies across all sectors.
The U.S. administration has repeatedly emphasized the importance of securing a reliable supply of rare earths to bolster national security. As tensions with China continue to escalate, the need for a stable and independent source of rare earth elements has never been more crucial. Chinese refining capabilities are the lifeblood of many key industries. This growing reliance raises questions, not just about the resilience of American supply chains but their impacts to critical sectors.
Venezuela’s Rare Earth Potential
Venezuela’s geologic setting is thought to have untapped deposits of rare earth elements. Yet, the precise availability and financial feasibility of these resources is unclear. For decades, the country has been synonymous with its enormous oil-stained wealth. Now, the recently identified potential for rare earth mining could greatly increase its resource portfolio.
Though the outlook looks bright, mining rare earths from the ground is just one step in the multi-step process. After extraction, these materials usually go through a refining process that, as of today, is largely dependent on Chinese facilities. This dependency underscores the urgency for the United States to develop its domestic capabilities for mining and refining rare earths. One thing we’re excited about is ongoing efforts to make these operations permanent. Yet, as industry experts have been cautioning, it might take years and even decades for these projects to be successful.
Navigating Trade Tensions and Supply Chain Challenges
The increasing trade tensions between the U.S. and China are coming to a head. Consequently, cries about rare earths and their effect on industrial policy are growing louder. War or not, China currently holds over 80 percent of the global market. Consequently, there is growing concern among U.S. policymakers regarding the country’s strategic dependence on foreign suppliers for these critical minerals. The concern there is that if anything were to disrupt that supply, we would risk threatening our national security and technological leadership.
As part of a broader strategy to counteract this reliance, American stakeholders are exploring various avenues to secure domestic sources of rare earth elements. Legislative measures aimed at fostering investment in mining and refining operations signal a commitment to reducing dependence on foreign suppliers. Although advocates and experts are excited about the potential in these initiatives, the timeline is still up in the air. They say there’s a long road ahead before the United States can achieve rare earth self-sufficiency.