China rocked the world in 2010 when it imposed an embargo on exports of crucial metals of rare earths in Japan. Japanese leaders panicked on television to warn that they lacked critical raw materials.
The embargo, caused by a territorial dispute, only lasted seven weeks. But that has changed the world supply chain for these metals. When the embargo was finished, China took energetic control of its mineral premium. The senior officials of Beijing have enlisted corruption, crushed the smugglers and consolidated the industry under the control of the State.
The world has been notified, especially Japan and the United States, two of China’s largest customers for rare land metals used in everything, from smartphones to missiles. The governments of the two countries have written detailed plans on how to alleviate their dependence on China. Japan has largely followed its plans and can today obtain Australian minerals.
Not the United States. Even after 15 years, the country still depends almost entirely on China for the treatment of rare land metals. As a result, American car manufacturers, aerospace companies and defense entrepreneurs have been vulnerable.
Angry against President Trump’s prices, China has suspended all the exports of certain rare earths, as well as even more precious magnets from them.
These small magnets and powerful – no bigger than a person’s finger ring, but with 15 times the strength of a conventional iron magnet – are a cheap and often neglected component of electric motors. They are used in electric and petrol cars as well as robots, drones, offshore wind turbines, missiles, hunting jets and many other products.
The American inability to conceive an alternative to its dependence on Chinese supplies lasted democratic and republican administrations.
“American decision -makers for 15 years have done very little to deal with the risk of dependence on China for rare earths, and in particular rare earth magnets,” said Milo McBride, specialist in critical minerals at Carnegie Endowment for International Peace in Washington.
The rare earths, he said, are “the most strategic minerals of all the minerals that were discussed for the last administrations”.
Beijing’s 2010 Embgo against Japan was undermined by the Chinese organized crime unions who controlled a large part of the industry in the China Center-South in collusion with local officials. The gangsters had smuggled up to half the annual production of the country’s rare Chinese land.
Weeks after the end of the embargo, Beijing took revenge. The government forces acting under national security orders stormed the valley near Longnan in the province of Jiangxi where a large part of the heavy minerals of rare earths were produced. They seized the private mines and imprisoned thousands of people in southern China. Industry regulations have been transferred from local governments to Beijing.
The mines were then nationalized and consolidated in a single company managed by the State, China Rare Earth Group. During a visit last week in the valley without the knowledge of the local authorities, there was no sign of the thugs which kept the mines of rare land in the south of China.
China has recently developed its own magnetic industry instead of sending materials to magnet factories to Japan. Beijing has paid money into the construction of advanced magnet factories in Ganzhou, a city near Longnan.
China now produces 90% of world magnets. Additional construction was underway in two of the largest ganzhou magnet factories last week.
The senior Chinese leader, Xi Jinping, said in a speech in 2020 that he was important for the national security of China that the western supply chains remain dependent on his country.
“We have to consolidate our forces and consolidate our international advance in the industries where we have an advantage,” he said a few months after visiting the most advanced Magiet factory in Ganzhou. He called for “the intensification of the dependence of international industrial tenders with regard to China, forming a powerful ability to counter and dissuade deliberate cuts by foreigners”.
Japan has also taken large -scale measures after the 2010 embargo. Its manufacturers began to hold enough rare inventory land to meet two years of their own needs. They also started looking abroad.
The Conglomerate Sumitomo group, with the financial support of the Japanese government, helped support the development of Lynas, an Australian mining company. Lynas mine and refine 60% of light rare earths from Japan, which are mixed with small quantities of rare earths to make magnets of rare earths. And the company is preparing to start refining heavy rare land for Japanese manufacturers this summer in Malaysia, although initially in small quantities.
The largest magnetic manufacturers in Japan – Protural, Shin -Etsu Chemical Company and TDK Corporation – have moved a certain production from Japan to China to have reliable access to rare earths. But they also kept considerable production in Japan.
The US rare Land Ligch Industry began with a subsidiary of General Motors in northern Indiana in the 1980s. But factories closed and moved to China and Singapore.
After the embargo in 2010, the Japanese company Hitachi Metals, which changed its name in 2023 in protection, responding to the concerns of the administration of former President Barack Obama, built a rare Earth magnets factory in North Carolina from 2011 to 2013.
The Hitachi Metals factory, with several dozen employees, had higher costs than the giant complexes built in Ganzhou. US companies have been unlikely to pay a supplement for product magnets in the United States and have gone to Chinese suppliers. Hitachi closed the factory in 2020 and the equipment remained in stock.
Today, the only active mine of rare earths in the United States is in Mountain Pass, California. Its operator, MP Materials, plans to start accelerating the commercial production of rare earth magnets at the end of the year in a factory in Texas. But even when it operates at full speed, the installation will produce in one year the equivalent of a day of Chinese production.
Chinese factories provide thousands of rare earth magnets each year to manufacturers of electric cars and offshore wind turbines – two industries that Trump criticized.
Like magnetic production, the exploitation of rare earths has also experienced an uneven history in the United States. The Mountain Pass mine produced the majority of rare earths in the world from 1965 to 1995, when China began to flood the world market with all kinds of low -cost exports.
The mine closed in 2002, in part because of the ever -increasing environmental regulations by California. An upgrade of $ 1.5 billion began in 2010, but the mining did not resume before 2017 – then the mine had to ship its ore to China for treatment in low -cost refineries there. It is only now that the mine has started to refine a large part of its production.
Zoning and environmental regulations make it difficult to open a mine of rare land in the United States. The opening of a mine of rare land in the United States takes 29 years, said Mark Smith, president and chief executive officer of Niocorp Developments, who obtained construction permits to build a mine in Nebraska.
“You can spend an entire career to operate a mine,” said Smith.
On the other hand, mines in China can be opened quickly and do not have to undergo the same type of rigorous regulatory approval.
Underlying all problems is that the global mineral market is tiny alongside other types of exploitation, such as copper.
Few American companies wanted to make big investments in rare earths only to face the risk, as Hitachi has noted, that customers prefer cheaper products from the government supported by the government in China.
“American companies have hesitated to take the plunge,” said David Sandalow, who supervised the policy of critical minerals in the Obama administration
Li You contributed research.
