Rare earths are minerals used to make magnets crucial for the automotive, electronics and defense industries, as well as renewable energy.
The US Treasury Secretary criticized export restrictions imposed by Beijing last week on technologies used for rare earth mining, smelting and other processing steps.
Scott Bessent said Thursday that it was “China against the world.” Here are some key things to know:
Are they rare?
Not precisely. With names like dysprosium, neodymium, and cerium, rare earths are a group of 17 heavy metals that are abundant throughout the Earth’s crust.
The United States Geological Survey estimated that in 2024 there were 110 million tons of deposits worldwide.
That includes 44 million in China, by far the world’s largest producer.
Another 22 million tons are estimated in Vietnam and 21 million in Brazil, while Russia has 10 million and India almost seven million tons.
But metal extraction requires intensive use of chemicals that generates toxic waste and has caused several environmental disasters.
Many countries are also afraid of assuming the high financial costs of production.
Minerals are often found in minute concentrations, meaning that 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 a car’s catalytic converters; The list of uses in today’s economy is practically endless.
They all have unique properties that are largely irreplaceable or can only be replaced at prohibitive costs.
Neodymium and dysprosium, for example, enable the manufacture of near-permanent superstrong magnets that require little maintenance, making it feasible to place ocean wind turbines to generate electricity far from the coast.
China in the lead
For decades, China has made the most of its reserves by investing massively in refining operations, often without the strict environmental oversight required elsewhere.
Beijing has also filed a slew of patents on rare earth production, a hurdle for companies in other countries hoping to launch large-scale processing.
As a result, many companies find it cheaper to ship their ore to China for refining, reinforcing global dependence.
In April, Beijing began requiring domestic exporters to apply for a license, seen as a response to U.S. tariffs that sparked alarm in Washington over slower supplies of rare earths.
In June, US President Donald Trump praised a deal under which China would provide vital items “in advance.”
But supply chains had not fully stabilized, and bureaucratic delays and selective approval still prevented many companies from ensuring timely access to materials, even before China expanded its restrictions.
Strategy and offer
The United States and the European Union get most of their supply from China.
Both are trying to boost their own production and better recycle what they use to reduce dependence on Beijing.
At the height of a U.S.-China trade dispute in 2019, Chinese state media suggested rare earth exports to the United States could be reduced in retaliation for U.S. measures, sparking fear among manufacturers.
In 2010, Japan saw firsthand the pain of a cutoff, when China suspended rare earth exports due to a territorial dispute.
Tokyo has since pushed hard to diversify supplies, signing deals with Australian group Lynas for production in Malaysia and increasing its recycling capabilities.
