With China having recently imposed new curbs on rare earth exports, this action has reverberated through the international market, causing alarm among industrialized nations over their reliance on these essential materials. Rare earth elements, essential for various technologies and industries, have become a focal point in the escalating competition between China and the United States.
China is a behemoth in the rare earths market, producing over 80 percent of the world’s rare earths and controlling about 90 percent of the supply chain. The country has recently instituted export restrictions. As a consequence, rare-earth magnet exports to the United States have crashed by 30%, exacerbating the current brewing storm. The U.S. is working hand in hand with allies like Japan to reestablish domestic mining capabilities. Through this initiative, the U.S. hopes to decrease dependence on Chinese resources while guaranteeing reliable access to these critically important materials.
Cleveland-Cliffs, a major player in the mining sector, is exploring opportunities to develop rare earths within the United States. As we’ve heard from experts, “de-risking” from China will be a difficult and expensive undertaking. The U.S. and Australia have made important commitments on critical minerals. Analysts expect it’ll be years before any of these initiatives can seriously contest China’s market leadership.
Japan is also making a big push to capitalize on China’s increasing appetite for rare earths. This directive is most notable for its attention to the electric vehicle (EV) sector. Japan Steel is aiming their sights on Chinese demand for magnesium alloy molding machines, which are a key component in the production of EVs. Japan and the European Union are working together to create a rare earth supply chain, including processing plants in Greenland. This collaboration presents an opportunity to access untapped reserves located outside of China’s reach.
Germany’s importers of rare earths and magnets remain on high alert, closely monitoring China’s moves as they navigate their supply chains. The continued uncertainty around China’s policy remains a source of volatility for global markets.
Turkey is looking to become a bigger player on the rare earths stage. They have found significant deposits of these valuable rare earth elements at the Beylikova mine. This realization gives Turkey the unique opportunity to significantly improve the current global supply chain. It provides developing countries that want to diversify away from Chinese sources of supply chances to do so.