US, EU rare earth race to break China dominance ‘risks fuelling global rivalry’
- Study finds efforts by Washington and Brussels to reduce reliance on Chinese supplies could intensify competition for access
- Rare earths are a vital component of many hi-tech industries including electric car batteries and solar panels
In a study released on Wednesday, researchers at London-based think tank Overseas Development Institute (ODI) said: “China’s dominance is likely to erode in the near term amid efforts by the US and European Union to expand their processing capacity and reduce their rare earth elements reliance on China, which has tightened export regulations amid rising geopolitical tensions.”
The study said the growth of hi-tech industries with specialised manufacturing needs had increased global attention on rare earth elements, valued at US$8 billion in 2018 – “a fairly small share of the global metals and minerals trade but a significant component in advanced manufacturing value chains”.
Rebecca Nadin, ODI’s director of global risks and resilience, said Beijing knew its innovation-driven growth required secure energy and mineral resources, including rare earth elements and other technologically critical minerals.
“Expect to see even more emphasis on building up ‘strategic mineral resource reserves’ and expanding exploration, as well as a commitment to taking part in ‘global mineral resource governance’,” said Nadin, who co-authored the report on China’s outward investment appetite and its implications for developing countries.