China's Strategic Mineral Dominance and US Stockpile Collapse

US Strategic Stockpile Decline

• 📉 The United States has seen its national defense stockpile collapse, decreasing from $25 billion to $1 billion.
• ❄️ Following the Cold War in the 1990s, the US got rid of 97% of its stockpiles due to a sense of security and perceived global peace.
• 🏛️ The US closed its Bureau of Mines in 1996, eliminating a central agency responsible for mineral oversight for nearly 30 years.

China's Strategic Industrial Strategy

• 🗺️ China has systematically secured minerals from around the world, including Africa and Asia, to build its industrial base.
• 🏭 This global mineral acquisition was paired with an aggressive domestic industrial strategy for processing and manufacturing.
• 💡 The US initially viewed China's actions as not a problem until it became a significant issue, particularly concerning rare earth minerals.

Critical Minerals and National Security

• ⚡ Key weapon systems like the F-35, destroyers, and Virginia-class submarines rely heavily on rare earth minerals.
• 🤝 The US is collaborating with international partners, including Japan and the EU, to counter China's dominance in critical minerals.
• 🌍 A major State Department event focused on minerals highlights the recognition that critical mineral security is a global challenge.

The Role of Industrial Policy

• 📈 Industrial policy, including subsidies and tax breaks, is common for supporting early-stage industries, as seen with Japan subsidizing Honda and Finland subsidizing Nokia.
• ⏳ Industrial policy should ideally be a temporary measure to help industries compete against heavily subsidized foreign competitors, like those in China.
• ⏳ Building a new mine in the US is a lengthy process, taking approximately 29 years from identification to production.