Rising tensions between China and the United States and European Union have sparked concerns that Beijing could use its dominant position as a supplier of rare earth materials for leverage in the trade war between the global economic powers.

Analysts are considering scenarios that could emerge if China were to cut off the US and Europe from access to rare earths that are essential to electric vehicles, wind turbines and drones.

At a time of frequent geopolitical friction among the three powers, Washington and Brussels want to avoid this scenario by investing in the market for 17 minerals with unique properties that are largely extracted and refined in China.

What are rare earth elements?

• Rare earth elements (REEs) are a group of 17 elements — lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium, yttrium — that appear in low concentrations in the ground.

Why are they called rare earths?

• Most REEs are not as rare as the group’s name suggests. They are called so as they tend to occur together in nature as part of the same ore and are difficult to find as standalone minerals.

• Although they are more abundant than their name implies, they are difficult and costly to mine and process cleanly. 

Why are they important?

• Rare earth elements are used in a wide range of consumer products, from iPhones to electric car motors, as well as military jet engines, satellites and lasers.

• Rare earths are used in rechargeable batteries for electric and hybrid cars, advanced ceramics, computers, DVD players, wind turbines, catalysts in cars and oil refineries, monitors, televisions, lighting, lasers, fiber optics, superconductors and glass polishing.

• Several rare earth elements, such as neodymium and dysprosium, are critical to the motors used in electric vehicles.

• Some rare earth minerals are essential in military equipment such as jet engines, missile guidance systems, anti-missile defence systems, satellites, as well as in lasers.

• Lanthanum, for example, is needed to manufacture night vision devices.

China is the world’s largest producer of REEs

• The total world reserves are estimated at 121 million tonnes of rare earth oxides (REO) of which China alone accounts for 44 million tonnes followed by Brazil, Vietnam and Russia.

• Rare earths are also mined in India, South Africa, Canada, Australia, Estonia and Malaysia. 

• China is the world’s largest producer of Rare earth elements (REEs), accounting for over 60 per cent of global annual production, estimated at 132,000 tonnes.

• In China, the principal production centres of rare earths are located at Baotou, Inner Mongolia and in Jiangxi and Sichuan provinces.

• Rare earth elements (REE) are characterised by high density, high melting point, high conductivity and high thermal conductance. 

• A number of rare earth minerals contain thorium and uranium in variable amounts, but they do not constitute essential components in the composition of the minerals.

• The principal sources of rare earth elements are bastnaesite (a fluorocarbonate which occurs in carbonatites and related igneous rocks), xenotime (yttrium phosphate) commonly found in mineral sand deposits, loparite which occurs in alkaline igneous rocks and monazite (a phosphate). 

• The rare earths occur in many other minerals and are recoverable as by-products from phosphate rock and from spent uranium leaching. 

• In India, monazite is the principal source of rare earths and thorium.

US, EU aim to boost production

• The expected exponential growth in demand for minerals that are linked to clean energy is putting more pressure on the US and Europe to take a closer look at where the vulnerabilities are, and the concrete steps these governments can take.

• In 2019, the US imported 80 per cent of its rare earth minerals from China.

• The EU gets 98 percent of its supply from China, the European Commission said last year.

• Amid the transition to green energy, in which rare earth minerals are sure to play a role, China’s market dominance is enough to sound an alarm in Western capitals.

• Rare earth minerals like neodymium, praseodymium and dysprosium are crucial to the manufacture of magnets used in wind turbines and electric vehicles.

• Last week, the US Senate passed a law aimed at improving US competitiveness that includes provisions to improve critical minerals supply chains, following a similar executive order issued by US President Joe Biden in February.

• Washington aims to boost production and processing of rare earths and lithium, another key mineral component, while “working with allies and partners to increase sustainable global supply and reduce reliance on geopolitical competitors”.

• In Europe, an action plan would soon be presented to the European Commission on how to boost production. Europe is expected to rely on importing raw materials or semi-processed materials and become more a processing base or recycling base.

Manorama Yearbook app is now available on Google Play Store and iOS App Store