The US-China trade war has raised apprehensions over China leveraging through rare earth metals trade.


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

What are Rare Earth Metals?

• Rare earth metals 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.

• They are rare because they are difficult and costly to mine and process cleanly.

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

Significance of Rare Earth Metals

• They have distinctive electrical, metallurgical, catalytic, nuclear, magnetic and luminescent properties.

• They are strategically very important due to their use of emerging and diverse technologies which cater to the needs of current society.

• Futuristic technologies, for example, high-temperature superconductivity, safe storage and transport of hydrogen need these rare earth metals.

• The global demand for REMs is increasing significantly in line with their expansion into high-end technology, environment, and economic areas.

• Due to their unique magnetic, luminescent, and electrochemical properties, they help in technologies perform with reduced weight, reduced emissions, and energy consumption.

Applications of Rare Earth Metals

• Rare earth elements are used in a wide range of consumer products, from iPhones to satellites and lasers.

• They are also used in rechargeable batteries, advanced ceramics, computers, DVD players, wind turbines, catalysts in cars and oil refineries, monitors, televisions, lighting, fiber optics, superconductors and glass polishing.

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

• Military equipments: Some rare earth minerals are essential in military equipment such as jet engines, missile guidance systems, antimissile defense systems, satellites, as well as in lasers. Lanthanum, for example, is needed to manufacture night vision devices.

Importance of China for the US w.r.t. Rare Earth Elements (REE)

• China is home to 37% of global rare earths reserves. In 2017, China accounted for 81% of the world’s rare earth production.

• China hosts most of the world’s processing capacity and supplied 80% of the rare earths imported by the United States from 2014 to 2017.

• California’s Mountain Pass mine is the only operating U.S. rare earths facility. But it ships a major portion of the extract to China for processing.

• China has imposed a tariff of 25% on those imports during the trade war.

India’s Position

• China, Australia, US and India are the world’s important sources of rare earth elements.

• As per estimates, total rare earth reserves in India are 10.21 million tonnes.

• Monazite, which contains thorium and Uranium, is the principal source of rare earths in India. Because of the presence of these radioactive elements, mining of monazite sands is undertaken by a government body.

• India has majorly been a supplier of rare earth raw materials and some basic rare earth compound. We have not been able to develop processing units for rare earth materials.

• The low cost production by China is a major cause of decline in rare earth production in India.

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