Rare earths are minerals used in the manufacture of magnets essential to the automotive, electronics and defense industries, as well as in renewable energy.
The US Treasury Secretary last week criticized Beijing’s export restrictions on technologies used for mining, smelting and other processing steps of rare earths.
Scott Bessent said Thursday it was “China against the world.” Here are some key things to know:
Are they rare?
Not really. With names like dysprosium, neodymium, and cerium, rare earths are a group of 17 heavy metals abundant throughout the Earth’s crust.
The United States Geological Survey estimated that in 2024 there would be 110 million tons of deposits worldwide.
This includes 44 million people in China, by far the world’s largest producer.
It is estimated that there will be an additional 22 million tonnes in Vietnam and 21 million in Brazil, while Russia will have 10 million and India almost 7 million tonnes.
But the extraction of metals requires intensive use of chemicals which generates toxic waste and has caused several environmental disasters.
Many countries are also reluctant to assume the high financial costs of production.
Minerals are often found in minute concentrations, meaning large quantities of rock must be processed to produce the refined product, often in powder form.
Why are they special?
The 17 rare earths are found in a wide variety of everyday and high-tech devices, from light bulbs to guided missiles.
Europium is crucial for television screens, cerium is used to polish glass and refine oil, lanthanum powers car catalytic converters: the list of uses in today’s economy is virtually endless.
All have unique properties that are largely irreplaceable or can only be replaced at prohibitive cost.
Neodymium and dysprosium, for example, enable the manufacture of super-strong, almost permanent magnets that require little maintenance, making it viable to install ocean wind turbines to generate electricity far from shore.
China in the lead
For decades, China has made the most of its reserves by investing heavily in refining operations, often without the strict environmental oversight required elsewhere.
Beijing has also filed a large number of patents on rare earth production, an obstacle to companies in other countries hoping to embark on large-scale processing.
As a result, many companies find it cheaper to ship their ore to China for refining, increasing global dependence.
Beijing in April began requiring domestic exporters to apply for a license, seen as a response to U.S. tariffs that have sparked concern in Washington over slowing supplies of rare earths.
In June, U.S. President Donald Trump welcomed a deal that would see China supply vital items “up front.”
But supply chains had not fully stabilized, with bureaucratic delays and selective permitting still preventing many companies from securing rapid access to materials – even before China expanded its restrictions.
Strategy and procurement
The United States and the European Union obtain their supplies mainly from China.
Both are trying to boost their own production and better recycle what they use to reduce their dependence on Beijing.
At the height of the US-China trade conflict in 2019, Chinese state media suggested that exports of rare earths to the US could be reduced in retaliation for US measures, sparking fear among manufacturers.
In 2010, Japan witnessed the pain of a shutdown, when China halted its rare earth exports due to a territorial dispute.
Since then, Tokyo has made considerable efforts to diversify its supplies, signing agreements with the Australian group Lynas for production in Malaysia and increasing its recycling capacities.
