Even as the trade war between China and the US worsens, Beijing has reportedly threatened to hit the Achilles heel of the US. According to reports in Chinese state media, Beijing could limit exports of the "rare earths" to the US, a move that would hit major US firms dealing in technology, medical equipment and defence.
A Chinese threat to use rare earths as a bargaining chip in the blistering trade war with the US cannot be brushed under the carpet as a minor irritant. A restriction on rare earth export to the US can literally puncture the wheels of Donald Trump's trade war juggernaut as China brutally dominates global exports of 17 elements that make up rare earths.
It remains to be seen if the Chinese would retaliate and use rare earths as a strategic lever. Historically, China's rare earth policy has been a matter of concern for industrialised nations like Japan and the US, as well as for the European Union countries.
China's brute domination
China controls more than 90 percent of the world's rare earth market, making advanced industrialized nations heavily dependent on it for the supply of these essential minerals. Though other countries have rare earths reserves, they are usually found in extremely low concentrations. This makes it difficult to extract and refine. China leads in the game, banking on decades-long experience in mining and refining the elements.
What are rare earths?
The 17 rare earth elements are lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium and yttrium. They aren't given the name rare earths because of their rarity but due to their ability to preserve traits withstanding the effect of heat.
Why are they crucial?
Rare earths are indispensable for high-tech industries and are heavily in demand in defence systems, electric cars, wind generators, hard-disk drives, mobile communication, missile guidance and the like.
Are there alternatives for rare earths?
Technically viable alternatives to rare earth materials are currently not known.
Does US have rare earths?
The US has rare earths reserves of more than a million tonnes but mining in the country has virtually stopped over the years over environmental and regulatory issues.
