“Change is constant, but no amount of change will turn the attitude of vulture to that of eagle.” 
― Bamigboye Olurotimi

Over the past several decades, while the United States was busy with unnecessary wars and the European Union was hoping to bring China into the democratic fold, China single-mindedly continued on its economic path. Its leaders foresaw the future and identified one strategically important industry that if they mastered then the whole world would be dependent on China for a foreseeable future. That industry was rare earth elements (REEs). Working ruthlessly on that goal Beijing established itself as the dominant global supplier of REEs.

What the Heck are Rare Earth Elements?

Rare earth elements are a collection of 17 minerals that are essential for advanced technologies, and most importantly, military weapon systems. Most of the REEs are not as rare as the group’s name implies. They were called rare because they are spread very evenly all over the Earth and not concentrated in one place. Promethium is the only REE that is scarcer than silver, gold, and platinum.

The other two least abundant rare-earth elements (thulium and lutetium) are nearly 200 times more common than gold. Ore deposits of REEs are found in unusual rock types and uncommon minerals. Compared to a common base and precious metals, rare-earth elements have a much lesser tendency to become concentrated in exploitable ore deposits. Consequently, most rare earths come from a small number of sources.

Why Do We Need Rare Earth Elements?

Why can’t we live without rare-earth elements? They are present in many day to day use gadgets to almost all high tech gadgets. Among the many beneficial qualities, rare-earth batteries are environment friendly, offer greater energy density, and better discharge characteristics. High-strength rare-earth magnets helped in the miniaturization of audio and video equipment, computers, vehicles, communication systems and military gear. Another REE erbium amplifies the signal. It is used in fibre-optic cables to transmit signals over long distances. The defence industry has tremendous usage of REEs. Some of them are:

Where Do We Stand Today?

Rare-earth elements can be called new gold or oil. They play a major role in technological advancements. Everything from satellites, computers, mobile phones to most modern military hardware heavily depend upon rare-earth elements. Modern aircraft like F-35 utilizes over 400 kilograms of rare-earth material.

In 2019 Japan was the highest importer of Chinese rare-earth, 36 percent, the US took in 33.4 percent followed by the Netherlands-9.6 percent, South Korea-5.4 percent, and Italy 3.5 percent. China’s top export volume in 2019 was Lanthanum (used in hybrid vehicles, about 10-15 kilograms), at 42.6 percent, however, Terbium (used in solid-state electronic devices, television screens and sonar systems) due to higher value was the top earner.

In the year 2015, the American Mineral Security Act was passed to identify which minerals are critical and critically need diversification of the supply chain. However, according to the U.S. Government Accountability Office, it would take 15 years to overhaul the defence supply chain, meaning that any changes to it need considerable lead time. Simple mathematics indicates that if the USA had started working on the issue in 2015 it would be able to resolve it only by 2030. This rings a bell and explains Chinese President Xi Jinping’s sudden desire to dominate the world before 2030.

Even though China holds less than 36% of the world’s REEs reserves, through territorial control or exclusive mining rights today it controls the production of roughly 90 percent of the rare-earth minerals. Additionally, China is less burdened with environmental or labour regulatory requirements that can greatly increase costs incurred in mining and manufacturing of REEs. In the decade starting from 2008, China exported 42.3 percent of the world’s total rare earth exports. The United States was a distant second at 9.3 percentage. Malaysia, Austria, and Japan were among top five.

In 2019 worldwide rare earth imports stood at just $1.15 billion, which is zilch when compared to over $1 trillion global crude oil imports. However, estimating the total value of industries that utilize these minerals is astounding. In 2020, Apple Inc alone had a turnover of $294 billion, and their manufacturing heavily dependents upon REEs.

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Categories: Mining & Energy

Tags: Australia, China, Communication, India, Opinion, United States