Paper: GS – II, Subject: International Relations, Topic: Global Issues, Issue: U.S.-Australia Rare Earths Deal.
Context:
The U.S.-Australia have signed a $3 billion agreement to enhance mining, processing, and investment in critical minerals and rare earths to reduce reliance on China, which currently dominates the global rare earth supply chain.
Key Takeaways:
About Rare Earth Elements (REEs):
- REE are a group of 17 chemical elements. They comprise the 15 lanthanide elements, along with scandium and yttrium.
- They are relatively abundant in Earth’s crust.
- They are rare because they are found in low concentrations and mixed with other minerals, making them difficult and expensive to extract.
- REEs are used to make magnets for electric vehicles (EVs), wind turbines, weapons, etc.
- They are used in electric vehicle (EV) motors, medical devices, weaponry, etc.
- REEs are divided into Heavy (HREEs) and Light (LREEs).
- LREEs are abundant, while HREEs are more critical due to their high demand and low availability.
- Among LREEs, neodymium is the most critical as it is extensively used in all mobile phones, medical equipment and electric vehicles.
US-Australia Rare Earths Deal: Scope, Risks, and Impact:
The U.S.–Australia rare earths deal promotes supply chain diversification, but China’s dominance endures, making the shift slow, costly, and technically challenging despite renewed investment confidence.
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