US, UAE sign rare earths agreement

On the sidelines of the US Critical Minerals Ministerial in Washington, the United States and the United Arab Emirates have signed the Framework on Security Supply in the Mining and Processing of Critical Mineral and Rare Earths. Many countries have been anxious about access of critical minerals and rare earths which have become essential in the advanced technologies industrial processes, for defence and for Artificial Intelligence (AI) industries.

Not all countries have reserves of critical minerals. For example, China is known to have the largest reserves of critical minerals, and in the trade stand-off between the US and China, both sides had resorted to weaponising them. For example, the US had put curbs on advanced chips being sold to China, and China in turn had imposed restrictions on exporting critical minerals and rare earths to the US. As a consequence, the US is keen to build stocks of critical minerals, and it wants to build a large alliance of countries in this matter.

The UAE has close diplomatic and trade ties with China. So, the UAE is assured of the supply of critical minerals. The US is keen to keep its international channels open for the supply of critical minerals through countries like UAE. The UAE too has high stakes in critical minerals because it has a sophisticated nuclear programme and it is pursuing an advanced space programme to support its agricultural productivity and to safeguard its water resources. T

he agreement was signed by UAE Minister of Investment Hassan Alsuwaidi and US Under Secretary of State for Economic Affairs Jacob Helberg.

The framework enables a coordinated approach to ensure supplies of critical minerals. It helps use of existing policies in a more efficient way, which includes UAE’s strategic reserves and the US’ industrial demand and building infrastructural stockpiling.

The two countries, following the signing of the framework, will look to private and public investments for new projects which will include all the stages – mining, processing, recycling and downstream activities. And they will also look at all aspects of supporting the projects though financial instruments including insurance.

This implies that the two countries would be working closely with each other, and both at state and private sector levels. This marks a new beginning for closer economic ties between the two countries. It reflects the fact that there is not just mere cordial relations between the two, but they plan to work quite closely at every stage of the projects in this critical field.

It is now well established that future technological developments and breakthroughs lie in critical minerals and rare earths. The framework agreement in this field between the UAE and US shows that they choose to be partners for the future and in a key field of development for the future.

The US is now ahead of the curve in AI technologies, though it needs the critical minerals and rare earths to make them a reality. And the US also needs partners with whom it can work out solutions. No country, however big, can be a self-sufficient player in the field of technology.

The UAE is a strategic partner in this enterprise for the future, and it opens up a new vista of cooperation. It is when the future is so interlocked as it is reflected in the framework agreement between the UAE and the US, that it becomes clear how close the interconnections are. In the economic field, many countries seem to be stepping back from globalization. In the field of technology, the story is different, and even opposite. In technology, the buzzword is cooperation, partnerships. Big economies cannot remain islands. Global networks are necessary.