Inside Out | US-China rivalry makes rare earths a matter of national security, rather than economics

Should China, a major exporter of these minerals critical to US military capabilities, try to hold the US hostage by threatening a ban, it can be sure America will pay the price, however high, for alternatives

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A ball mill at the Mountain Pass mine in California operated by MP Materials, America's only rare earths producer. The miner ships all of its output to China because there is no refining capacity elsewhere in the world to handle its production. Photo: Bloomberg

Published: 7:00am, 17 Jun 2019Updated: 7:22am, 17 Jun 2019

If there is anything truly rare about rare earths, it must surely be the number of times any one of us ever thought or talked about them, until just a few months ago.

But for some, rare earths have been front of mind for decades. China’s paramount leader Deng Xiaoping, who in 1987 visited Baotou in Inner Mongolia, noted later: “The Middle East has oil, China has rare earths.” In the United States, it seems rare earths has been a cottage industry for security strategists for decades. The more you think about national security, the more you come to think about rare earths.

In broad economic terms, for those of us looking at the drivers of global growth, and the forces that lift poor people out of poverty, rare earths are rather unimportant. For example, while copper production last year amounted to over 4 million tonnes, global production of rare earths amounted to just 168,000 tonnes.

Why then has the national security-obsessed team gathered in the White House around President Donald Trump suddenly brought rare earths to front of mind? Why is China’s leadership toying with the idea of restricting rare earth exports as retaliation in the US tariff war? Last month, Chinese President Xi Jinping added fuel to fire by visiting the Ganzhou rare earths factory in Jiangxi province, home to the country’s biggest manufacturer of neodymium-iron-boron magnets.

President Xi Jinping’s visit to Jiangxi’s rare earth mining base is significant as the province is where China’s defeated Red Army started its fabled Long March in 1934. Photo: Xinhua

As a non-chemist and someone who has not thought about periodic tables for the better part of 50 years, I needed to start with basic questions: What are rare earths? In what ways are they rare and crucial? Why is the US in such a sweat over them?

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.css-1m2rp1p{color:#34b8b5;}Inside Out | US-China rivalry makes rare earths a matter of national security, rather than economics

Inside Out | US-China rivalry makes rare earths a matter of national security, rather than economics