Securing Supply Chain Resiliency for Critical Rare Earth Metals

Critical minerals, including rare earths, face a rapidly increasing demand, but the global supply chain lacks key indicators of resilience including geographic diversity and the ability to withstand disruptions. This chapter outlines and compares how state intervention and industrial policy has been key to building rare earth supply in the United States, China, and Japan and analyzes key indicators of risk for countries that wish to use industrial policy to diversify the rare earth supply moving forward. After examining protection of property rights and political freedom in countries that host existing and probable rare earth mining sites, the chapter argues that countries should invest in liberal democracies with strong property rights protection and pay to internalize the risks and rewards of a resilient supply chain. If the rich democracies are not willing to bear the cost of domestic mining and processing themselves then trade with (and dependence on) China is not only key but is the only possible path forward.