Environmentalists and markets can end Beijing’s monopoly on minerals for smartphones and more.
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Looks like it’s time for another panic about rare-earth elements. New fears are surfacing that Beijing could use its dominance of the production of these vital minerals to throttle the global economy. As usual, the truth is more complex and less favorable for Beijing.
Rare earths, which are metals toward the bottom of the periodic table, are crucial to many emerging technologies. Their magnetic properties make them indispensable for smartphones, wind turbines, electric vehicles, nuclear submarines and other things. Some 80% of global output of processed rare earths are produced in China.
Publicly the Communist Party acts like this market dominance puts it in the economic catbird seat. One recent report suggested officials are studying how much damage Beijing could do by cutting off rare-earths for the West’s F-35 fighter program. In 2010 it threatened to ban rare-earth exports to Japan following a territorial dispute.
Then there’s rare-earth reality. China’s share of global production, while still high, is already on the wane; it was above 95% as recently as 2010. Despite the name, rare earths are abundant across the globe. Driven in part by Beijing’s metallurgical saber-rattling, countries such as Australia and the U.S. have ramped up mining and processing. Investment is underway on new recycling techniques.
This capacity already undermines China’s supposed threat to foreign militaries. Defense applications in the West are a very small portion of total rare-earth consumption. The Trump Administration studied the possibility of stockpiling in case of a Chinese supply disruption. While that plan has yet to get off the ground, the U.S. and allies likely could meet their military rare-earth needs outside China in short order in case of an embargo.
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