⏎ Words Summary from News
Rare earths are needed for everything from consumer electronics to electric vehicles, wind turbines and fighter jets – and China controls the supply chain. In the second of a four-part series, we look at how China gradually took a commanding role in the rare earth industry, and how the US is now working to strengthen its sources and production. Nearly a half-century removed from being the world’s dominant supplier of rare earth elements, California’s Mountain Pass mine is once again being tasked with unearthing a veritable treasure trove of metals and minerals that the United States hopes will help bridge a supply gulf with China in an increasingly critical industry. Splashing out hundreds of millions of dollars, the US Department of Defence is digging deep into the public coffers to bring back the mine, which has had a rocky history. After being shut down in 2002 due to environmental concerns, Mountain Pass was reawakened during the early days of former president Barack Obama’s administration when the privately held Molycorp Minerals was formed to revive it. This keeps costs low and shuts out rivals constrained by regulation.”
In 1981, China exported 2,800 tonnes of raw, rare earth materials. By 1995, China’s exports surpassed those of the US for the first time, reaching 27,000 tonnes, according to a 2023 research note by investment bank China International Capital Corporation about “embracing a new rare earth supply landscape”. As a surge of rare earth exports from China flooded the global market, prices of the critical minerals and their alloys plunged. “Magnet production is the very key tech barrier for many countries, because only China and Japan have this technology,” he explained. “And even the top three Japanese magnet producers do the work in China.”
Key Takeaways
- But the effort ground to a halt in 2015 when the company went bankrupt.
- But unwinding China’s deeply ingrained dominance across nearly every stage of the rare earth value chain is easier said than done.
- Breaking China’s grip on rare earths is brutally hard, and getting harder Sebastian Contin Trillo-Figueroa “China’s rare earth dominance stems from deliberate state policy, not luck,” said Sebastian Contin Trillo-Figueroa, a Hong Kong-based geopolitical analyst.
- “Breaking China’s grip on rare earths is brutally hard, and getting harder.” China holds the largest rare earth reserves globally, according to the US Geological Survey, with extensive deposits of medium-heavy rare earth elements concentrated in its southern regions.
- Amid the country’s reform and opening era, paramount leader Deng Xiaoping famously said in 1987: “The Middle East has oil, China has rare earths.” One of the most important light rare earth elements is neodymium – a critical material for magnets used in electric vehicles.
Insights & Analysis
- But the effort ground to a halt in 2015 when the company went bankrupt.
- But unwinding China’s deeply ingrained dominance across nearly every stage of the rare earth value chain is easier said than done.
- However, for all its strategic importance, the rare earth industry offers slim commercial returns.