What could break China’s grip on rare earths?
What makes rare earths so critical?
These 17 metals are crucial components of the products you use every day, even the device you’re watching this on.
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How China controls the elements that power your life
Rare earths are in almost every modern electronic good.
Rachana Shanbhogue
Business Affairs Editor
The Economist
Neodynmium, for example, makes magnets that go into electric vehicles and wind turbines. Gadolinium is used in lasers and as a contrast agent for MRIs. And Europium is used in television and computer screens. But despite their name, rare earths aren’t actually very rare.
There are more than 15 countries and territories listed as having reserves. Brazil, for example, has the world’s second largest reserves of rare earth elements. The world leader though, is China. Its firms supply nearly 70% of the ore from which rare earths are extracted, and more than 90% of the refined materials. America gets 80% of its rare earths from China. The first rare earths were discovered in the 1700s, but the industry really flourished after they were found in California in 1949. Then in the 1980s, China began opening hundreds of mining and processing firms. The country surpassed America as the main producer at the turn of this century. China now controls the market, partly because of its huge scale, and partly because other countries were happy to avoid the extremely polluting work. Mining rare earths is only part of the process. Separating and purifying the minerals takes time and money. In the West labour is more expensive and there are stricter environmental regulations. China’s dominance though, is now creating a problem.
In April 2025 Trump declared 34% tariffs on China, sparking fears of a trade war. Two days later China put export controls in place, meaning that rare earths could no longer be sent out of the country without a special licence. Further restrictions were announced in October – though a one year delay was agreed after talks in South Korea.
President Trump
President of America
From zero to ten, with ten being the best, I would say the meeting was a 12.
Rachana Shanbhogue
Business Affairs Editor
The Economist
China’s become more willing to hold up the supply of rare earths, but the world still needs them.
The year-long truce might lead companies and governments to relax but China knows the power of its rare earth weapon and will only be tempted to use it again. That means alternative options need to be developed. So what could they be?
To reduce America’s reliance on China, Donald Trump’s defence department has become the largest shareholder in the country’s only rare earths producer, MP Materials. Brazil and Australia also have large reserves. Anthony Albanese, Australia’s prime minister, has signed a deal with Trump to cooperate on mining projects across the two countries.
Antony Albanese
Australian Prime Minister
Today will be seen as a really significant day in our relationship.
Rachana Shanbhogue
Business Affairs Editor
The Economist
But it will take years to ramp up production to the levels needed to satisfy demand. Alternatively, recycling could reduce the amount of new rare earths that need to be extracted in the first place.
The ores that contain rare earths have quite low concentrations, so the best source of the metals is in the products that already exist. Apple has committed to a $500m partnership with MP Materials to make magnets from recycled rare earths.
Tim Cook
Chief Executive Officer
Apple
We’re thrilled to work together on a cutting edge rare earth recycling line in Mountain Pass, California
Rachana Shanbhogue
Business Affairs Editor
The Economist
This too will take years because there’s a ‘chicken and egg’ problem. Having a lot of rare earths come from recycling relies on having a lot of products out there to recycle. At the moment most of the electric cars on the road are relatively new and so they aren’t going to show up in the scrap yard for many years. Another approach is to find alternatives to rare earths.
After China banned the export of the elements to Japan in 2010, Japanese firms developed a heavy rare earth free magnet for hybrid vehicle motors. Other car makers are now following suit. Alternative materials are also gaining favour. For example, scientists have been synthesising Tetrataenite. In nature it’s found in some meteorites. It has magnetic properties similar to those of rare earth metals. Scientists have been able to make Tetrataenite in labs since the 1960s, but it’s slow and expensive. Now they’re looking at ways to speed things up and get the price down.
Consistent investment is perhaps the most important way to see change. In the past, when China has restricted and then restored the supply of rare earths, companies have reduced investment into alternatives. But now that China is using its power over rear earths more often, the rest of the world has a strong reason to keep investing.
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Supported by Mishcon de Reya