As the spectre of tariffs and border wars shadows regions around the world, access to critical minerals has become paramount, with major players seeking to level the playing field where China reigns supreme.
America’s determination to challenge China’s status as the unrivalled leader in the rare earths supply chain could have a profound impact on global society and the environment.
Rare and valuable
From everyday tools to more complex technologies, rare earth elements have multiple applications, such as electronics, renewable energy generation, and military hardware.
Materials like neodymium and terbium are crucial components of smartphone devices, functioning as powerful magnets or for colours that can adjust screen brightness.
While these elements are not necessarily scarce in terms of geological availability, processing them will take a tremendous industrial effort, not to mention the environmental costs that come with producing them in large quantities.
For instance, the mountainous region in California used to be the world’s number one rare earths deposit, supplying the bulk of global demand for these materials.
However, high operational expenses and strict environmental standards caused the United States to slowly lose its edge in the rare earths competition.
Though global reserves for rare earth elements are estimated to be at 130 million metric tonnes, with 34 other countries identified as having their own deposits, almost all of the materials used today are sourced and developed from the same country: China.
China’s rare earths empire
Beijing’s global dominance in the rare earths sector stands on two pillars: production and refinement.
According to a BBC report, China controls 85% of global rare earth mining, with its production estimated to be at 90%, providing it with an imposing influence in the supply chain.
In fact, major countries like the United States source 80% of the country’s rare earth requirements from China, while the European Union is even more dependent at 98%.
The South China Morning Post also reported that Beijing’s total investment in the rare earth sector has reached $63.2 billion in the last five years, with Chinese geologists discovering 163 new mineral deposits since 2021.
China’s cheap labour, combined with its predilection to tolerate environmental consequences, allowed it to pick up where America left off.
Other strategies meant to kill off competitors, like tax breaks and export incentives to keep rare earth prices low in the global market, were also enacted to slowly build China’s portfolio as the unchallenged leader in rare earth production and refinement.
By 2005, China’s rare earth global market share had peaked at 98%, monopolising an industry that was once America’s expertise.
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A game of rare earths
Possessing enormous control in the rare earth supply network gives China a highly valuable bargaining tool that can help pursue its interests, even at the cost of irritating what Beijing sees as an adversarial nation.
In 2010, Beijing imposed a rare earth shipments embargo on Japan, following a collision between a Chinese fishing boat and Japanese coast guard vessels off the Senkaku Islands.
While Japan has begun its diversification of rare earth sources since then, the United States faces an even higher risk, considering that most of the high-technology weapons it has, like F-35 stealth jets, Arleigh-Burke class destroyers, and laser systems, rely on Chinese rare earth exports.
If the tension between the two countries reaches a crescendo that ultimately results in a war, China could theoretically reduce America’s ability to fight a prolonged conflict by embargoing the latter’s rare earth supplies.
For its part, America has made steps to reduce its rare earth supply dependence on China, starting with finding other partners in the sector.
In a report from Dawn, American firm US Strategic Metals inked a $500-million pact with Pakistan for mineral exploration and development.
The deal is expected to provide America with rare metals like neodymium and praseodymium that are crucial for defence-related applications.
As a long-term strategy, the White House also reactivated the Defence Production Act, a Cold War-era legislation, that will give the president powers to redirect the country’s industrial might for the purpose of national defence.
Experts say that the US will need to pour between $10 to $15 billion in the span of 10 years to rebuild its internal rare earth supply chain.
The social and environmental price
While Washington certainly has the money to finance its rare earth supply independence bid, it remains to be seen whether it has the political will and patience to sustain its strategy in the longer run.
Reactivating dormant mining sites like the Round Top Mountain in Texas could trigger environmental degradation such as water contamination, toxic waste generation, and air pollution.
The social costs are under consideration too, knowing that some mining deposits are located within or near American Indigenous lands, like those in the Navajo and Apache areas.
This raises concerns that rebuilding rare earth production mechanisms in these locations is an encroachment policy that could be challenged in courts.
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Shameeka Voyiya 
Lucia Caporalini 
Kamille Q. Cabreza