As China’s economy has developed over the last several decades, its leaders have sought to transform the country into a key player in strategically important industries. Toward this end, Beijing has established China as the dominant global supplier of rare earths, a collection of 17 minerals that are indispensable to the manufacturing of smartphones, electric vehicles, military weapon systems, and countless other advanced technologies.
Beijing has demonstrated a willingness to leverage its weight in the global rare earth industry in pursuit of its political objectives, raising alarm bells in several major countries. However, China’s influence within the industry is likely to be eroded in the coming years as changing market dynamics empower new actors to compete.
The Global Marketplace for Rare Earths
The global rare earths trade is relatively small compared to other commodities. In 2019, the value of worldwide rare earth imports stood at just $1.15 billion – a fraction of the more than $1 trillion in global crude oil imports. The total value of goods produced using rare earths, however, is immense. Each Apple iPhone, for example, relies on multiple rare earth elements. Neodymium is used to make tiny, yet powerful, magnets that allow iPhone speakers to function. Europium is used in trace amounts to produce red colors on screens, and cerium is used to polish the phones during the manufacturing process. During the 2019 fiscal year, Apple sold $142.4 billion worth of iPhones.
Despite their name, most rare earth elements are relatively abundant. The process of mining rare earths and transforming them into usable materials is, however, expensive and damaging to the environment. For years, Beijing exploited its relatively low-cost labor force and lax environmental laws to gain a competitive edge in the global market and become the leading supplier of rare earths. From 2008 to 2018, China exported nearly 408,000 metric tons of rare earths, which amounted to 42.3 percent of all rare earth exports over the period. The United States was the second-largest exporter, supplying roughly 9.3 percent of the global total. Malaysia (9.1 percent), Austria (9.0 percent), and Japan (7.1 percent) rounded out the top five.
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According to China’s General Administration of Customs, China exported 45,552 metric tons of rare earths worth $398.8 million in 2019. The vast majority of these exports went to the world’s major economic and technological powerhouses. About 36 percent (by volume) went to Japan, making it the top destination of Chinese rare earths. The US was a close second, taking in 33.4 percent of Chinese exports. Alongside the Netherlands (9.6 percent), South Korea (5.4 percent), and Italy (3.5 percent), these five countries imported a combined 87.8 percent of China’s rare earth exports.
| Breakdown of Global Rare Earth Exports (2008-2018) | ||||
|---|---|---|---|---|
| Country | Export Volume (metric tons) | Share (%) | Export Value (millions of US$) | Share (%) |
| China | 407,886.6 | 42.3 | 8,112.2 | 46.3 |
| USA | 89,467.1 | 9.3 | 953.6 | 5.4 |
| Malaysia | 87,696.1 | 9.1 | 942.4 | 5.4 |
| Austria | 87,055.1 | 9.0 | 867.8 | 5.0 |
| Japan | 68,412.9 | 7.1 | 2,172.6 | 12.4 |
| Rest of World | 223,172.7 | 23.2 | 4,467.7 | 25.5 |
| Source: UN Comtrade Database |
At 42.6 percent of total exports by volume, lanthanum was China’s top rare earth export by a wide margin. Lanthanum is used in significant quantities in hybrid vehicle batteries. Each Toyota Prius, for instance, contains some 10-15 kilograms (kg) of the substance. Terbium, which is significantly more expensive, was China’s top export by value, accounting for roughly 14.5 percent ($57.9 million) of the country’s total exports in 2019. Terbium is primarily used in solid-state electronic devices but is also used in sonar systems and television screens.
China’s Push to Dominate the Rare Earth Industry
China’s dominance in the rare earth industry is the result of decades of targeted industrial policies aimed at leapfrogging other nations. In recent years, Beijing has also looked to reform China’s rare earth industry to enhance efficiency, better protect the environment, and crack down on illegal mining.
The Chinese government took major steps to support its nascent rare earth industry by issuing export tax rebates in the mid-1980s. The rebates lowered costs for Chinese mining companies, which allowed them to gain a foothold in the global market. From 1985 to 1995, China’s rare earth mining production exploded from just 8,500 metric tons to roughly 48,000 metric tons, and its share of global mining output widened from 21.4 percent to 60.1 percent.
The original article contains well made interactive graphs.
As usuall,, US over regulations make it extremely difficult to mine and process rare earth metals in the US so we’re forced to depend on foreign suppliers (especially China) to provide our needs…
Under Harris/Biden, all US regulations will skyrocket and further decrease our industrial competitiveness and increase our dependence on China’s goods and raw material, which China will leverage against the US for various economic, political, financial and military concessions.
isn’t Leftism great?
Only if anyone else wants to buy. China is buying up all resources it can find a seller of.
Hellooo…China is a threat to nearly all global supply chains.
Does China Pose a Threat to Global Rare Earth Supply Chains?
Yes; Anyone with a monopoly is a threat !
Mineral Exploration Geologists can discover new sources of rare earths anytime there is A. a reasonable guarantee of sustained price support, and B. a friendly development and production legal framework. Please note this means license to pollute for China but adhering to strict environmental safeguards for the rest of us. In my 50 years exploring for minerals I have several times been surprised by rare earth analytical results, but examining the setting explains why, especially where geological processes concentrate from an initial uncommon, but anomalous, source. Next 4 years in USA? Forget about it.
Has somebody confused Austria with Australia as a supplier?
Geoff S
China export $400m of rare earth metals a year.
BUT import $400m of oil a day.
Yes China could disrupt global supply of rare earth metals or many other commodities or products.
But other countries can play the same Game with other products.
It is really said that leaders try b…s… Game theory stuff. Tit-for-tat tradewars only impacts their own citizens.
Does anyone have data on the REE requirements if the new administration goes through with its pledge to phase out hydrocarbons and replace them with EV’s?
Yes and no. Anti-mining enviro whackos pose a greater threat. If they would work with miners in the free world, the miners would be persuaded to spend money on safety instead of litigation.
China is not only dominating the small ‘Rare Earths’ supply chain, but most other technology supply chains as well. It has hugely increased its industrial capacity – rather like America during WW2 – and so looks set fair to dominate world politics in the 21st century, as America did during the last half of the 20th.
Perhaps America should start learning how to decline gracefully like the British Empire?
China poses a threat to life as we know it .
name something China is not a threat to?…..that’s a better game
They’ve pulled things before with supply (2009? 2010?), which has me living where I am due to a corporation’s attempt to keep a supply chain linked.
They stopped certain REs shipping for a while to drive the price up. (much like OPEC when they needed additional cash, or to punish) and in the interim what was out there was slowly being consumed, until suddenly places like Clariant were unable to make certain things, oddly enough. A raw used in my job came from them. My company found a supplier who was willing to sell, but we needed to buy over a one year supply or it wasn’t worth their time, and the then owner was fine with that, because we would use it and buying 10x more than wanted at the time was far better than going out of business.
One of the companies we once supplied had used a competitor (long story, involves lawsuits etc) asked if we’d sell to them again (gov’t contracts needed to be filled) as the competitor could not get the raw (not willing or not able), and this led the Corporate Boss Lady to decide to buy the supplier that was able to keep supplying (us), then promptly tried to undo why we we able to supply when no one else was able (because corporate stupidity).
Anyhow, this is not an unknown tactic of the CCP and at that time, affected everything from printer ink, plating, electronics, to fire fighting, and to a lesser extent, house paint, epoxies, soldering flux . . .
Unlike Fracking, that cut the power of OPEC and Russia, there is no easy way to suddenly get RE refining going quickly enough the CCP could try a rehash of the 70’s oil embargo. Our only saving grace is, like OPEC, they need the money too much to stop it completely.
USA and Canada have considerable RE resources already identified. Turning those identified resources into reserves is nearly impossible in the current regulatory and anti-mining environment. If you have driven I-15 between Las Vegas and LA you have passed by one of the largest and highest grade RE deposits in the world at Mtn Pass, CA. Look it up and read the history.
Mining RE ore is the easy part–processing the RE ore into saleable products is a nasty business and therein lies the major issue. The voices of the anti-mining and environmental activist groups have won the battle to ensure that the U.S. will not produce from domestic resources and will continue to be held hostage to China.
https://www.metaltechnews.com/story/2020/05/13/mining-tech/ree-tech-arises-from-the-ashes-of-coal/226.html
“..Enormous domestic reserves of the 17 rare earths are found in the coal that has been mined in America for decades. While natural coal deposits may not make a very good REE mine, the burning of this power plant fuel works like a concentrator that leaves behind higher grades of these technology metals in the ash…”
https://pubs.er.usgs.gov/publication/fs20193048
“..Research into how to utilize coal and coal fly ash as sources of REEs is ongoing. Viable recovery of REEs from coal and coal ash requires identification of coals and ashes with the highest REE concentrations and development of workable methods for REE extraction and recovery. Understanding how REEs occur within fly ash, described in this fact sheet, is one of the keys to developing possible methods for their recovery..”
The question in my mind right now is whether the Biden Administration will put an end to projects seeking to develop ways to extract RE elements from coal ash in commercially viable ways. It would not surprise me if he does do so given his opposition to fossil fuels because of the climate alarmist narrative.
The Chinese have chosen to trade off environmental damage with lowering the cost of extraction. Other than some low-level radiation from the typically-associated thorium, there is nothing inherently different about processing REE ores than there is from many other complex ores. The issue is one of a tradeoff of social priorities and processing costs. If thorium breeder reactors were to become common throughout the world, processing REE ores for the thorium also, would just create another profit line.
Hey, no scantily clad clickbait links. Did that issue get resolved?
You know it’s bad when the DoD has to get its domestic resources processed in China because of EPA and cost.
I’ve learned of a new cottage industry concerning rare earth materials in the U.S.
Thieves are apparently going around cutting the catalytic converters off of parked cars and trucks and getting the rare earth materials out of them and selling them. A battery-operated metal saw makes short work of it.
The article I read said each catalytic converter was worth about $150 to the thief. Of course, you have to know a fence (buyer) to be successful (for all those amateur thieves out there).
I see where the new 2021 Ford F-150 Hybrid-Electric pickup can power your whole home if the electric service goes down. I believe the deluxe model can produce about 7.4kW.
I guess I’ll have to buy one of those things.
I ought to write to Biden and see if he will increase the subsidy for electric vehicles. Or maybe I should write to AOC. Or both. I think they ought to double it. 🙂 I’m just kidding in case anyone is wondering.