Mongolia Deepens Cooperation With US on Rare Earths to Deter China, Russia: Analysts

Trucks move tons of ore at the open pit mining area at the Oyu Tolgoi mine in the south Gobi desert, Khanbogd region, Mongolia, on Oct. 11, 2012. (Paula Bronstein/Getty Images)

Mongolia, a resource-rich country landlocked between China and Russia, is cementing its partnership with the United States on rare earths. Analysts say it is a significant geopolitical move that could break China’s monopoly on rare earth minerals.

Mongolian Prime Minister Oyun-Erdene Luvsannamsrain visited Washington on Aug. 2. One of the main topics discussed during the U.S.-Mongolia bilateral talks was the joint mining of rare earths, including copper.

Mr. Oyun-Erdene told Reuters that the cooperation on rare earth minerals will be further deepened under a memorandum of understanding signed in June. He called the United States an “important strategic third neighbor.”

In addition to rare earth mines, Mongolia has bountiful metal mines, such as copper, lead-zinc, and bauxite.

Mr. Oyun-Erdene also expressed concern that countries bordering China and Russia would suffer if superpower competition boiled over.

Given its border with Russia, Mongolia has suffered from the fallout of Russia’s invasion of Ukraine last year, including from inflation of goods like explosives for mining, Mr. Oyun-Erdene said.

The Biden administration has focused on developing its relationships with countries throughout Asia to counter communist China’s growing might and the so-called “no limits” partnership between Beijing and Moscow.

Symbolic Move

Mongolia’s rare earths could allow the United States, Europe, and other Western countries to ease their overdependence on China’s supply chain of rare earths, according to China observer Tang Jingyuan.

The U.S.-Mongolia cooperation is “a significant achievement of the West’s ‘decommunization’ of the rare earth supply chain” and a symbolic move in the U.S.-China confrontation in resources, science, and technology, Mr. Tang told the Chinese language edition of The Epoch Times on Aug. 5.

“It [U.S.-Mongolia cooperation] will put the Chinese Communist Party under more serious pressures in its strategic competition with the United States.”

Mongolian Prime Minister Oyun-Erdene Luvsannamsrai during the parliamentary assembly in Ulaanbaatar, the capital of Mongolia, on Jan. 27, 2021. (Byambasuren Byamba-Ochir/AFP via Getty Images)

The United States is looking for alternative rare earth suppliers to replace China. BP’s latest energy review shows that China produced 59 percent of the world’s rare earth elements in 2021. That’s down from much closer to 100 percent in 2010, according to statistics gathered by the U.S. Geological Survey.

The United States sources most of its rare earth imports from China, but that dependence has eased to 74 percent between 2018 and 2021, from 80 percent between 2014 and 2017, reported Reuters.

Mongolia’s partnership with the United States demonstrates that the country’s strategy is pivoting to geopolitical diplomacy, Mr. Tang said, citing Mongolia’s unique position in the interior of Northeast Asia and surrounded by Russia and China.

Since rich resources would promote Mongolia’s tie with the West, “China and Russia would no longer dare to despise this neighboring power, and Mongolia would have more excellent strategic space and diplomatic flexibility,” said Mr. Tang.

Zhuge Mingyang, a contributor to The Epoch Times, shared a similar view. “Such collaboration and investment in Mongolia would help improve the country’s economic status, as well as change its geopolitics, rendering Mongolia a pivotal role in U.S. deterrence against communist China and Russia,” he said.

More Business Cooperations

During his trip to Washington, Mr. Oyun-Erdene also met with Vice President Kamala Harris and agreed to sign the “Open Skies” civil aviation agreement between the two countries.

The White House said in an Aug. 2 joint statement that “the agreement will facilitate air services between Mongolia and the United States as well as expanding our strong economic and commercial partnership, promoting people-to-people ties, and creating new opportunities for trade and tourism.”

Last month, the Mongolian government approved using SpaceX’s Starlink satellite network service to enhance internet communications and security.

Mr. Zhuge believes the warming relations between Mongolia and the United States could encourage and endorse Western investment in Mongolia, as rare earth mining and processing require advanced technology and investment in infrastructure.

Rare earths are named “industrial vitamins,” a collection of 17 rare metal elements, which are widely used and indispensable materials for high-tech and national defense and military industries, along with plenty of modern technological products like cell phones, missiles, wind turbines, electric vehicles, unmanned airplanes, and robots.

Nathan Worcester and Reuters contributed to this report.