Bad news for China: Rare-earth elements aren’t that rare

“Heavy rare earth elements are added as a kind of spice, doping agent to maintain the magnet magnet at high temperatures. They also improve magnetoresistance and magnet life.”

Beyond magnets, these rare earth elements can serve a variety of purposes, such as strengthening metals, improving radar systems, and treating cancer. Without them, technological infrastructure and consumer gadgets often cannot run at the same level, but they maintain basic functionality. “Wind turbines will no longer be out of service 10 years ago. Electric vehicles will not last long,” Wang says.

Lange agrees that the impact of losing access to heavy rare earth elements is somewhat manageable for American businesses. “One of the places where that rare earth is inside your car is in the motor that pulls the windows up and down,” says Lange. “There are ways to deal with things that aren’t that fun, like rolling the window with your hands.”

Loops and workarounds

In the past, China’s important mineral restrictions have not been very successful. One reason is that US companies that want to buy rare earth minerals can first pass through the middle country. Belgium, for example, has emerged as a re-export hub that could appear to pass through one of Beijing’s minerals, which was first restricted in 2023, from China to the US. According to transaction data. The European Union has much closer ties with Washington than Beijing, making it difficult for the Chinese government to effectively halt this trade flow.

Another indication that China’s export restrictions were not very effective is that prices for key minerals have risen slightly since they were first implemented, indicating stable supply levels. “Whatever they did in 2023 doesn’t really change the current state of the market,” Lange says.

However, China’s latest restrictions are more broad and there is already some evidence that things could be different this time. Companies that require these factors have been forced to buy them from other companies with existing private stockpiles, which have become more valuable in recent weeks. “Currently, prices are rising very rapidly to reduce stockpiles,” says Baskaran. This quotes a conversation with a rare earth trader.

However, in the long run, companies may be able to find technical solutions to address potential shortages in rare earth minerals. For example, Tesla announced that it had reduced its use in EV motors by 25% in 2023, and planned to remove them completely in the future. Although the automaker hasn’t made clear what it will use instead Experts guess You can rely on other types of magnets that do not rely on rare earths.

Where are the American mines?

Rare earths, or generally important minerals, are often cited along with semiconductors, as the industry the United States wants to re-fire most, but the challenges associated with retrieving each are very different.

Unlike creating sophisticated semiconductors that require hundreds of millions of dollars of sophisticated machines and building highly complex factories, critical minerals are not too difficult to produce. The techniques for mining and refine them are mature, with both the US and Canada having some large natural deposits of them. However, mining has produced little value and is so polluted that it has been kicked out of the West.