Rare earths are minerals used to make magnets essential to the automotive, electronics and defense industries, as well as in renewable energy.
The US Treasury secretary slammed export restrictions Beijing imposed last week on technologies used in rare earth mining, smelting and other processes.
Scott Bessent said on Thursday it was “China versus the world”. Here are some important things to know:
Are they rare?
Not really. 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 in 2024 that there were 110 million tons of deposits worldwide.
That includes 44 million in China – by far the world’s largest producer.
Another 22 million tonnes are estimated in Vietnam and 21 million in Brazil, while Russia has 10 million and India almost seven million tonnes.
But extracting the metals requires extensive chemical use that results in toxic waste and has caused numerous environmental disasters.
Many countries are also wary of bearing the high financial costs of production.
The minerals are often found in small ore concentrations, meaning that large amounts 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 essential for TV screens, cerium is used to polish glass and refine oil, lanthanum makes a car’s catalytic converters work – the list of uses in today’s economy is almost endless.
All have unique characteristics that are largely irreplaceable or can only be replaced at prohibitive cost.
Neodymium and dysprosium, for example, allow the manufacture of near-permanent, super-strong magnets that require little maintenance – making the placement of offshore wind turbines to generate electricity far from the coastline viable.
China in the lead
For decades, China has made the most of its reserves by investing heavily in refining operations, often without the strict environmental oversight required elsewhere.
Beijing has also filed a large number 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 the world’s dependence.
Beijing in April began requiring domestic exporters to apply for a license, seen as a response to US tariffs that sparked alarm in Washington over slowing supplies of rare earths.
In June, US President Donald Trump hailed a deal that would see China supply the vital elements “up front”.
But supply chains had not fully stabilized, with bureaucratic delays and selective approval still preventing many companies from securing timely access to the materials – even before China widened its restrictions.
Strategy and tender
The US and EU get most of their supply from China.
Both are trying to increase their own production and better recycle what they use to reduce dependence on Beijing.
At the height of a US-China trade dispute in 2019, Chinese state media suggested rare earth exports to the US could be cut in retaliation for US measures, sparking fears among producers.
Back in 2010, Japan saw firsthand the pain of a cut-off when China halted exports of rare earths due to a territorial dispute.
Since then, Tokyo has pushed hard to diversify supplies, signing deals with Australian group Lynas for production from Malaysia and increasing their recycling capacity.
