Mongolia set to become key player in US rare earth strategy

Oilprice.com carries a report to focus on a recent discussion between US Vice President Kamala Harris and Mongolian Prime Minister L. Oyun-Erdene on partnerships in mining, especially for rare earth magnets. It adds that the ongoing dialogue aims to help Mongolia leverage its mining potential and ensure a steady flow of minerals to the global market. Caliber.Az reprints the report.

At a meeting several days ago, officials from the US and Mongolia discussed devising innovative approaches to ensure the smooth entry of essential minerals from the landlocked Mongolian nation into the global market, namely for materials for rare earth magnets.

Following his meeting with US Vice President Kamala Harris in Washington, Mongolian Prime Minister L. Oyun-Erdene told Reuters that Mongolia planned to intensify its collaborative efforts with the US in the realm of mining. The country would specifically target rare earths, rare earth magnets, and other minerals integral to advanced technologies.

The two parties also delved into strategies for advancing the objectives laid out in a memorandum of understanding. The memorandum stemmed from a June collaboration between the US State Department and Mongolia’s Ministry of Mining and Heavy Industry. This could potentially make way for a new source of rare earths for the US to produce rare earth magnets, which could add strength to rare earth prices (see MetalMiner’s price forecasting track record).

United States Hopes to Support Mongolia Despite China

Experts feel that the visit has significant implications for the ongoing geopolitical rivalry between China and the US Presently, China occupies a commanding position in the rare earth market. Indeed, the country not only boasts substantial natural reserves, but also significant expertise in the refinement and extraction of these vital elements.

According to a US State Department spokesman quoted by Reuters, the discussions focused on specific areas where the US could assist Mongolia in comprehending its resource potential. They also touched on methods for extraction and avenues for production. The spokesperson added that the US would support Mongolia in finding inventive solutions that empowered it to exercise greater control over mining, exploration, extraction, and production of critical minerals and rare earth elements.

This led to numerous inquiries into how the US might facilitate the unimpeded exportation of such resources from Mongolia. This is prudent, given the country’s challenging geopolitical position. The spokesperson acknowledged the complexity and highlighted ongoing dialogue regarding strategies to make resources like rare earth magnets accessible to the market.

China and US Race for Rare Earth Magnets and Copper

Despite commencing patent applications later than the US and Japan, China now commands over 80 per cent of all patents related to rare earths. In the first half of 2023, China undertook considerable ores and metals, including from the US It later exported refined rare earths, primarily in the form of materials for rare earth magnets. China’s control over the supply chain coupled with its proficiency in refining and separating rare earths continues to give it a strategic upper hand.

China’s neighbor Mongolia also possesses vast reserves of copper. The reddish-orange metal is essential for numerous advanced technological uses, including certain defense apparatus. Meanwhile, the US, has an urgent need for both rare earths and copper for advanced technological applications, including defense systems. For this reason, the country has been trying to diversify its sources beyond its primary global competitor, China.