China has the undisputed dominance in rare earths. This is how the West is trying to loosen its grip

Their name is somewhat unfortunate because it neither accurately describes what they are nor gives a realistic idea of ​​their availability, but what is clear is that the “rare earths” will play a key role in the future. Due to its strategic use in the industry, due to the limited nature of its supply chain and due to the geopolitical value that, due in part to the above factors, it has been gaining over time.

On the international map of rare earths —all those considered to be “critical minerals”actually—China plays a leading role that gives it a comfortable position of power. Now movements are emerging outside its borders that are trying to loosen its grip.

What exactly are rare earths? As ironic as it may seem, they are not lands, nor is everything they encompass as rare as their name suggests. With that peculiar label we refer to a group of 17 chemical elements among which are scandium, yttrium and lanthanides. Some like cerium are relatively abundant; others, not so much. For the technology industry they are crucial. Among a long etcetera, it uses them in electric cars, astronomical instruments, lasers or sensors.

Together they form part of the drawer of the critical minerals, a list that also includes lithium or cobalt, essential, among other things, for photovoltaic panels or windmills. Hence, they play a crucial role in the energy transition and the decarbonisation process in which the European Union is immersed. Its demand, in general, is expected to continue to rise.

Is China important in your supply? Yes a lot. Over the years, China has been able to make good use of its rare earth mineral resources; but above all – and perhaps this is what is really crucial – it has carved out a strategic role in the supply chain and has accumulated valuable experience and infrastructure that allows it to convert the extracted material into refined oxides, separated and useful for the industry. As required East Asia Forumit is estimated that it has achieved between 50 and 60% of the market share of mining and 80% capacity processing.

To get an idea of ​​its capacity, the United States Geological Survey estimates that about 78% of imports of this type of mineral come from China. Its weight transcends in any case that select “club” of 17 “rare” elements: more than a half of the raw materials that the EU considers critical, which includes, for example, bismuth, are imported from China, which also stands out in the lithium, cobalt or nickel supply chain.

What does that dominant weight imply? Considerable power. Critical minerals are crucial for the technology sector, but also in strategic processes already underway and for which institutions such as the EU have decided to make a strong commitment: the transition towards fuel-free mobility and green energy or decarbonisation. explains it with crystal clarity Maroš Šefcovic, from the EC: “Europe must avoid the dependency trap when it comes to critical raw materials. Because without them, there is simply no green and digital transformation”.

China itself have demonstrated that his pulse does not tremble when extracting a geostrategic value from his position of power: in 2011, in the midst of a territorial dispute with Japan over the Senkaku Islands, the Japanese government assured that Beijing deliberately withheld shipments of rare earths as punishment. No need to go so far. Just three years ago, in the midst of the Huawei crisis, Chinese authorities threatened also with paralyzing the export of key rare earths to the United States.

How do other countries respond? Trying to loosen that grip. “We cannot allow countries like China to use their market position in key commodities, technologies or products to disrupt our economy or exert unwanted geopolitical influence,” explained a few days ago US Treasury Secretary Janet Yellen. Something similar is happening in the European Union, with a great dependence on metal imports and which has wanted to boost its production of key raw materials with the VECTOR projectin which the CSIC participates.

And what movements are they giving? In 2019, the US adopted measures at the legislative level to boost national supply and in February Joe Biden struck again on the issue, even advancing a $35 million grant to create a national supply chain. In June Lynas Rare Earths was also made with a contract of 120 million to build a processing plant in one of the country’s largest deposits, in Texas, which should start operating as early as 2025.

USA or the European Union In any case, they are not the only ones who have made a move. United Kingdom wants to weaken Chinese rule and its dependence on critical minerals with a processing facility located in the north of the country to which it has allocated some 150 million pounds. Far from there, in Kalgoorie (Australia), Lynas also wants to launch a large refinery for rare earths.

What about Turkey? In this effort to shake Chinese rule, the name of Turkey has been loud in recent weeks. The reason? Its authorities announced with great fanfare the discovery in Central Anatolia of a huge deposit of 694 million tons of rare earths, a volume of resources that would only be exceeded by the exploitation of Bayanoba, in China.

Since then, however, different voices have been emerging that question the real scope of the deposit and, above all, its practical capacity to compete with the Asian Giant.

Has China stood still? Of course not. In 2021, its authorities approved the merger of three state companies that went on to form the China Rare Earth Groupa giant that will help consolidate the dominance of the country: it is estimated that it will control between 60 and 70% of the country’s production of rare earths, which is a good pinch of global supply.

Another example that China is not willing to give up its position is that when Turkey announced its discovery, it did not take long to qualify its potential and, above all, claim its own muscle: “The reason why China enjoys a dominant global position is not is not the great reserve, but the capacity to extract, separate and regenerate, as well as a complete industrial chain to produce derivatives”, underlines the diary Global Timesbacked by the Chinese Communist Party.

Images | Darmau Lee (Unsplash) and Coordenação-Geral de Observação da Terra/INPE (Flickr)