Why Rare Earths Are the Key to Just About Everything
They’re not actually that rare, but their importance to almost all modern technologies cannot be overstated.
When then-U.S. President Donald Trump offered to buy Greenland in 2019, the world thought—or hoped—he was kidding. “It must be an April Fool’s Day joke … but totally out of [season]!” Lars Lokke Rasmussen, a former Danish prime minister, tweeted. (Current Prime Minister Mette Frederiksen’s response—“Greenland is not for sale.”—was a little blunter.)
But Trump’s proposal could also be seen as a strategic move, if one overlooked the fact that Greenland wasn’t actually on the market. The autonomous territory within the Kingdom of Denmark is currently home to the world’s biggest undeveloped deposits of rare-earth minerals—critical resources that the United States needs to build everything from iPhones to missiles, and for which it is almost entirely dependent on China.
In recent weeks, Greenland has made headlines yet again for its coveted rare earths, although this time around the bidder was a Beijing-backed Australian company, and the real estate wasn’t Greenland itself but a mine expected to produce 10 percent of the world’s rare earths. What exactly are these minerals, and what has made them so highly sought-after?
As countries increasingly vie for rare earths in Greenland and beyond, Foreign Policy looked into what the elements are—and why they play such an outsized role in geopolitics.
What are rare earths—and why are they so important?
On the most basic level, rare earths are a group of 17 metallic elements that can be found on the periodic table. Fifteen of these elements are members of a group called lanthanides; the other two elements, scandium and yttrium, are located elsewhere on the periodic table but share similar chemical properties.
These elements have unique characteristics that make them critical components in the development of modern technology. “[They] have remarkable physical and chemical properties that make them arguably the superheroes of the periodic table,” Ryan Castilloux, the managing director of Adamas Intelligence, a minerals consultancy, told Foreign Policy.
Lanthanum, for example, can be used to convert raw crude oil drawn from the ground into gasoline and diesel, Castilloux said. Neodymium, another element, has magnetic properties that allow it to produce extremely powerful magnets—magnets that have enabled the miniaturization of popular gadgets and such electronics as the iPhone. Without rare earths, we wouldn’t have tech ranging from flat screen TVs to electric cars, or even guided missiles.
“[Rare earths] just change everything about automobiles; about green technology; about the accuracy of weapons systems. And so they’ve just become essential,” said Jim Kennedy, the president of ThREE Consulting, a rare earths consultancy. “You want a Prius? You need rare earths. You want a long-range Tesla? You need rare earths. You want a cruise missile that is accurate to 1 meter? You need rare earths.”
So they must be pretty rare.
Not really. Rare-earth elements are actually quite abundant in nature—but finding them in minable concentrations is another story.
Unlike minerals like copper and gold, which develop in rich deposits that can then be easily mined, rare-earth elements can be seen as “kind of anti-social,” Castilloux said. They have certain properties that make them disperse throughout most rock types, instead of grouping together, and are scarcely found in economically significant amounts for extraction and processing.
“While they’re in the ground in appreciable concentrations, it’s really hard to find them in rich enough clusters to justify the mining and the processing and the production of them,” he said.
Where are rare earths found?
Although rare-earth deposits have been found all around the world, the industry has come to be dominated by China, which largely controls every step from the processing of ores to refining and magnet production.
This wasn’t always the case: Up until 1980, the United States was a leading producer in rare earths. Now, that title goes to Beijing. “China began mining and mining in greater and greater volumes and flooding the world with low-priced rare-earth elements to the point that it ultimately pushed others like the U.S. out of business,” Castilloux said. “And in doing so, it kind of acquired this monopoly on [the] mining of rare earths.”
China is currently home to the world’s biggest rare-earth reserves, holding roughly 37 percent of the global total. In 2017, China produced a whopping 80 percent of the world’s rare-earth minerals, although that number slipped to around 63 percent in 2019. As China cemented its influence over the market, the rest of the world grew increasingly reliant on Beijing’s steady supply. Between 2016 and 2019, the United States imported 80 percent of its rare earths from China.
Why does China’s dominance matter?
Beijing’s control of the market has made it difficult—almost impossible—for other countries such as the United States, Canada, and Australia to build their own supply chains and operate competitively. China’s monopoly “gives them an economy of scale that’s extremely challenging for the rest of the world to compete with,” said Castilloux, who compared the current market to a small mom-and-pop store attempting to compete with a retail giant like Walmart.
“They’ve strategically leveraged their vertical integration and their scale to be able to operate profitably at what the rest of the world would consider low price levels, and thereby have really just kept a stranglehold on their monopoly,” he said.
China has leveraged its rare earths supply to attract foreign manufacturers and strengthen its manufacturing power. Beijing’s influence has also fueled fears that it’s absorbing high-tech industries from other countries—and that it will hold too great of a sway in shaping the future of the world economy and technological developments.
With rare earths, “[China] can take a very tiny commodity market and control global economics. … They’re bringing the whole world to their knees,” Kennedy said. “They control technology; they control where technology is going.”
China’s virtual monopoly over rare earths has also raised concerns that it could use them as a bargaining chip. As long as countries remain reliant on Beijing’s rare-earth elements, “[they] will always remain at the mercy of China and its control on prices and its ability to stop supply should it decide to,” Castilloux said.
Are these concerns warranted?
It wouldn’t be the first time that China has leveraged its dominance of rare earths for political ends. In 2010, after tensions between Beijing and Tokyo soared, China—which produced 93 percent of rare earths at the time—swiftly blocked its exports to Japan. Beijing’s response “sent the world into a frenzy,” Castilloux said. “It showed end users China’s willingness to use rare-earth elements as a political weapon.”
This threat reemerged when Trump and Chinese President Xi Jinping sparred over tariffs in 2019. As the U.S.-China trade war escalated, the Association of China Rare Earth Industry, a group of Chinese rare-earth producers, criticized Washington’s “trade bullying behavior” and pledged to back all of Beijing’s countermeasures in the trade war.
Chinese state media also suggested that Beijing should wield its rare earths to confront the United States. “[China] has various tools in hand, such as cutting the number of rare-earth mining licenses, raising market access standards for miners, reducing exports of primary rare-earth products, and restricting outbound and inbound investment in related industries,” one article said.
It added: “China’s monopoly on the production of rare earths will help Beijing control the lifeblood of the US high-technology sector.”
What’s their environmental impact?
Rare-earth mining results in radioactive waste and releases other major contaminants, one reason that rare-earth mining in the United States has declined so precipitously in recent decades. In China, the production has also dumped dangerous pollutants into the groundwater and surface water.
“If you’re looking for that green future that President Biden is excited about, it is not deliverable without these elements—and you only need a little bit,” Kennedy said.
Christina Lu is an intern at Foreign Policy. Twitter: @christinafei