Display of some rare earth elements

While no decision has been made yet, China was considering to use its supply of rare earth elements as a weapon in the trade with the U.S. China produces a majority of the world’s rare earths, chemical elements that have magnetic and luminescent properties and are used in a range of consumer products and electronics. They help light up smartphones, make X-rays possible and ensure the safe use of nuclear reactors. They are also indispensable in modern fighter jets. According to the U.S. Geological Survey, from 2014 to 2017, the United States imported 80% of its rare earth compounds and metals from China, valued at USD92 million. China’s mines account for about 70% of global output.

China will not allow any country to use products made from its rare-earth exports to impede China’s development, the Ministry of Commerce said. “While satisfying domestic demand, China is always willing to fulfill other countries’ rightful needs for rare-earth materials,” MOFCOM Spokesman Gao Feng said. But if any country plans to use products made from its rare-earth exports to hamper China’s development, it is not acceptable, he added.

In 2018, China exported 5,303,400 tons of rare earths at an export value of CNY3.39 billion, an increase of 3.6% over the same period in 2017, according to Chinese customs data. The city of Ganzhou in Jiangxi province accounts for one-third of the national total. It will take years for the U.S. to build a complete rare-earth supply chain equivalent to Ganzhou – from upstream industries like mining and extraction to downstream, such as producing ferro-aluminum and permanent magnets. China has overwhelming technology and cost advantages in almost all those sectors, according to a manager at a rear earth company.

Rare earths refer to a group of 17 elements that have unique magnetic and electrochemical properties. They include elements such as gadolinium, lanthanum, cerium and promethium, and are vital in the production of a whole range of goods, the Guardian reports. Rare earths are not actually very rare. They can be found across the earth’s crust, but often in low concentrations and they are difficult and expensive to mine. The process can also damage the environment, with ecosystems put at risk by pit mining, the release of metal byproducts from refineries, and water contamination from particles being dumped during waste disposal. China has some 37% of global reserves. While rare-earths mines are also found in Malaysia, Brazil, Estonia, Australia, India, South Africa and Canada, there are few alternative suppliers to fill the gap if China decides to limit exports. The U.S. has a single rare-earth mine in operation, based in California. The Mountain Pass mine exports about 50,000 tons of rare-earth extract to China for processing.