On April 4, China’s Ministry of Commerce put export restrictions on seven rare earth elements (REEs). It is easy to scratch one’s head when restrictions are put on things called samarium, scandium, gadolinium, terbium, dysprosium, and lutetium but such elements are important components, particularly the magnets made with them that perform well at high temperatures (these magnets have 15 times the force of conventional iron magnets), of everything from phones, to hard drives, to electric vehicles, to flat screen TVs, to jet engines, to radar and sonar systems (i.e. military uses, no doubt on the minds of some policy makers. A single F-35 fighter jet uses 900 pounds of rare earth metals). There are 17 rare earths in all.

This is hardly the first time the Chinese government (CPP) has done this kind of thing. In July 2023, China announced it would restrict the export of gallon and germanium, materials used mostly on making solar panels and semi-conductors. Back in September 2010, China imposed an embargo on rare earth exports to Japan in the aftermath of a Chinese fishing boat colliding with two Japanese coastguard vessels (the captain of the fishing boat was arrested). The embargo lasted seven weeks. This new restriction is not an outright ban. Rather firms are now required to apply for an export license (16 U.S. entities were put on an export control list for dual-use materials). More of a slowdown than a ban. This, of course, is in response to Trump’s tariff mania. It appears most companies in the U.S. have some kind of stockpile available for the moment or at least the option to purchase the materials from companies that do.

Despite the name ‘rare earths’, rare earths are not especially scarce. The thing is they are usually scattered in low concentrations with other minerals and can be difficult and polluting to separate out into their pure forms. Whereas 30 years ago China was importing rare earths from the U.S., mining and, especially, processing are now dominated by companies in China. China currently produces 69 percent of global rare earth ores, performs about 90 percent of rare earth processing, including 99 percent of the world’s ‘heavy’ rare earth metals (heavy rare earths are generally less abundant than light rare earths due to their magnetic properties). A single refinery in Vietnam accounts for the other one percent of heavy rare earth processing but it has been out of operation the past year due to a tax dispute. China also produces 90 percent of the world’s rare earth magnets. Meanwhile the U.S. is down to just one rare earth mine, the Mountain Pass Rare Earth Mine located in California’s Mojave Desert. Yet over 80 percent of its output in recent years has been shipped to China for processing due to a lack of domestic capacity and expertise.

Mining has become a hard sell in the U.S. in part due to local resistance and environmental concerns. In China, the industry is helped by nearly 40 universities that specialize in extractive metallurgy and another 40 in mineral processing. In the U.S. that number is zero. At the moment fewer than 700 students are enrolled in mining-related fields. Though in the case of rare earths there are signs even China has grown weary of the pollution (including reports of poisoned crops and cancer villages). Starting around 2016 China began consolidating its large rare earth manufactures, closing the dirtiest mines, and outsourcing the mining to Myanmar (another dictatorship with few scruples). In 2014 Myanmar exported just over $1,5 million worth of rare earths to China. According to a report by Global Witness, the figure reached $780 million by 2021and continues to climb – supplying China with nearly half its rare earths with processing for reexport is still done in China (see Vince Beiser’s Power Metals: The Race for Resources that Will Shape the Future).

This dependence on China would seem the obvious reason for the Trump administration’s wacky talk about conquering Greenland. Trump is not the only one with eyes on Greenland, the likes of Jeff Bezos and Bill Gates have invested in companies prospecting there. However, there is the fact that Greenland has an artic climate that makes mining hard and costly, the place has only about 100 miles of roads, and there appears no shortage of environmentalists among its 56,000 residents. Greenland’s current government swept into power four years ago on an environmentalist agenda and soon passed a law banning uranium mining as well as freezing development of a rare earths mine.

Problems also abound in this silly mineral deal in Ukraine. Leaving aside he fact that many of Ukraine’s minerals are in territory currently occupied by Putin’s army, the last significant mapping of Ukraine’s resources took place in the Soviet era. Billions will have to be invested long before anything is dug out of the earth. The U.S. Geological Survey’s most recent Mineral Commodity Summary does not record Ukraine as having significant deposits of rare earths. Even if everything goes swimmingly, a rarity in mining, mines can take 10+ years to set up. By then both Trump and Zelensky figure to be long gone. Who knows if future parties will be motivated to enforce the deal or even recall it.

An important point about rare earths, and likely the other major reason the U.S. gave up on them, is that while they’re used in a great variety of things, those things usually only contain small amounts of rare earths, and usually they play supportive roles. For all the ink spilled about them, according to the U.S. Geological Survey the U.S. imported around $170 million worth of rare earths last year. Meanwhile between September 2023 and August 2024 the U.S. imported over $327 million of fresh potatoes and $300 million worth of potato chips. Because of the limited quantities needed by companies, the market for them can be quite volatile- in other words profits can be shaky. Low prices tend to turn off new investors and China’s dominance enables it keep prices low to discourage competition.

It is also worth noting that the CCP’s attempts at mineral restriction have had only mixed results. In the midst of the 2010 flareup, the Japanese government quickly passed a reform $1.2 billion package that featured five main pillars including developing stockpiles, developing technologies to use alternative materials and reducing the use of rare earths, and investment in mines in Australia. As a result, Japan’s dependency on China’s rare earths dropped from 90 percent at the time to 60 percent today.

Brazil and Vietnam have significant reserves of rare earths and figure to get more involved in the race. Mining will be with us for quite a while and more public investment in making the industry less destructive is necessary. Mines can also be unionized. In the U.S. the Defense Department is funding much of the work on rare earths (again, that military angle) but it needed always be so. This week the New York Times’ Science section featured an article on efforts to exact rare earth from mining wastewater- a faster and cleaner method than opening new mines. In the long run, companies may find technological solutions to deal with potential shortages of rare earths. For instance, in 2023 Tesla announced it had reduced the use of rare earths in its EV motors by 20 percent with plans to eliminate them entirely in the future.

There is no telling how this tariff battle will play out between Trump Administration and the CCP. As of this writing, Trump has announced a 90-day lowering of tariffs from 145 percent to 30 percent. It is possible some kind of deal will be reached shortly that completely restores the rare earths’ flow. However, one legacy left from the COVID pandemic is the importance of diverse supply chains. Another legacy is the critical importance of the environment, as well as workers’ rights. As the green transition unfolds there is an endless fight to keep the latter lesson at the forefront.

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