Countries Fight Over Periodic Table as China Hoards Rare Earths

Quick geology lesson: There are 17 types of rare earths, and they’re used as the building blocks in cars, semiconductors, missiles, drones, and more. China mines 70% and processes 90% of the world’s supply.

China’s massive rock collection has become one of its most important bargaining chips, and as the country tightens its grip on rare earths exports, the global supply chain is showing cracks. This week, world leaders raised the alarm, with EU trade officials emphasizing yesterday the bloc’s urgent need to reduce its dependence on rare earths from China.

Rocky Relationships

When POTUS Trump raised global import tariffs in April, China said, “Bet,” and rolled out retaliatory restrictions on seven kinds of rare earths and the magnets made from them. At the same time, China cracked down on illegal smuggling of the valuable elements that had made previous export curbs less effective. Last year, China halted exports of three rare minerals critical for making computer chips, EV batteries, and military weapons systems.

Now, auto manufacturing seems to be the first major industry feeling the effects of its mineral deficiency:

• Ford temporarily stopped churning out SUVs at a Chicago plant last week because of a shortage of magnets, which are used not only in electric vehicle power systems but also in various components of gas-powered cars, such as power windows and headlights. Finance chief Sherry House said yesterday that restrictions are putting stress on Ford’s system. Mercedes-Benz’s production chief noted that it’s chatting with suppliers about building up reserves, while BMW said its supply chain has been disrupted but its factories are still running. 
• China’s passing out a limited number of export permits, but experts say it’s not enough to keep production running smoothly. For now, the auto industry has a stockpile of magnets to fall back on, but it’s only expected to last a few months at most. 

Digging Deep: The US has spent hundreds of millions of dollars to bring rare earth production stateside since 2020, but it’s still in the early stages of building the complicated supply chain (rare earths require more than 100 steps to process). In the meantime, US officials are pushing for access to Ukraine’s rare earths, while automakers are trying to develop parts that require fewer or no rare earths. Trump and Chinese President Xi Jinping are expected to have a discussion this week that’ll highlight export restrictions. It could be a tad awkward after Trump posted on social media that Xi is “VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH.”