RARE EARTH ELEMENTS (REEs)Rare Earths in Australia Must Be About More Than Mining
REEs are a group of 17 metals—15 elements from the lanthanide series and two chemically similar elements, scandium and yttrium. Each has unique properties vital for a range of commercial and defense technologies, including batteries, high-powered magnets and electronic equipment. China’s rare-earth production exceeds that of the world’s second-largest producer, the U.S., by more than 100,000 tons per year. The U.S. still relies on China for most rare-earth imports. In some cases, like heavy REE processing, China has 100 percent control of the market.
Last week, ASPI researcher Albert Zhang shone a spotlight on a sophisticated Chinese Communist Party information campaign targeting rare earths and Australian company Lynas. This research has powerful implications for those policymakers seeking to create resilient supplies of rare-earth elements (REEs) and critical minerals.
REEs are a group of 17 metals—15 elements from the lanthanide series and two chemically similar elements, scandium and yttrium. Each has unique properties vital for a range of commercial and defence technologies, including batteries, high-powered magnets and electronic equipment. An iPhone, for example, contains eight rare-earth minerals, and there are probably a couple in your refrigerator and washing machine. They also make up about 420 kilograms of an F-35 fighter jet and are essential for guided missiles.
Despite their name, REEs are not all that rare. They’re present in abundance in the earth’s crust. The challenge, however, is finding them in sufficient concentrations to justify commercial mining operations. Securing the upfront financing required to build a mine in a location that will tolerate the substantial environmental impacts of rare-earth processing is no easy task.
Fortunately for China, the commercial viability of its reserves, Chinese companies’ access to state-backed financing and the country’s lax environmental regulations have helped build its dominance of the global REE market.
China’s rare-earth production exceeds that of the world’s second-largest producer, the U.S., by more than 100,000 tons per year. The U.S. still relies on China for most rare-earth imports. According to the U.S. Geological Survey, China accounted for at least 58 percent of global production of REEs last year, and possibly up to 80 percent if you include illegal and undocumented production activity. In some cases, like heavy REE processing, China has 100 percent control of the market.
The problem here isn’t just that the CCP has monopolistic control of the global REE supply chains, but that it is willing to use this power to coerce and control others. The issue is not a hypothetical one. Realizing that controlling the global market makes for a useful economic lever, the CCP has used this power to coerce trading partners on more than one occasion.
In 2010, it effectively restricted rare-earth exports to Japan after a Chinese fishing trawler collided with a Japanese coastguard vessel near the disputed Senkaku Islands.
More recently, it threatened to limit rare-earth supplies to U.S. defense contractors, including Lockheed Martin, over U.S. arms sales to Taiwan.
