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article imageOp-Ed: Trade War — China could ban export of rare earth minerals

By Karen Graham     May 23, 2019 in Politics
As the trade war between the U.S. and China escalate, the stakes get higher. Beijing could slam every corner of the American economy, from oil refineries to wind turbines to jet engines, by banning exports of crucial minerals.
On Monday this week, Chinese President Xi Jinping was photographed at a rare earth mining and processing plant in China’s eastern Jiangxi province, a key region for mining rare earth minerals used in electric vehicles.
More than likely, it was China's response to Washington's latest tariffs on almost all exports from China. Interestingly, Trump was careful to omit rare earth minerals exported to the U.S. from the list of goods being hit with tariffs for a very good reason - Without a reliable domestic supply, the US must rely on rare earths from China to supply industries of strategic importance, according to the Global Times.
China accounts for seven out of every 10 tons of rare earth minerals mined worldwide. Basically, Beijing also controls the price of these minerals, and should China use its dominance in rare earths as geopolitical leverage, it would not be the first time. In 2010, China sharply limited rare-earth exports to Japan while the two countries were squabbling over disputed islands.
Have you ever wondered where the cobalt in your Smartphone comes from? More often than not  from the...
Have you ever wondered where the cobalt in your Smartphone comes from? More often than not, from the Congo, with children as young as seven years old doing the mining.
University of California at Berkeley
And China is not afraid to "turn off the tap" or claim questionable problems with a country's imports into China as a leverage tool like Beijing has done with Canada recently over canola. Just thinking about what would happen if China did "turn off the tap" is already worrying analysts and policymakers in Washington.
Trump tariffs have left the U.S. economy vulnerable
First of all, despite what President Donald Trump believes, global supply chains are necessary because they offer flexibility and lower costs for consumers on a wide range of products. This includes the raw materials necessary to manufacturing many of those products.
Rare earth minerals are used in rechargeable batteries for electric and hybrid cars, advanced ceramics, computers, DVD players, wind turbines, catalysts in cars and oil refineries, monitors, televisions, lighting, lasers, fiber optics, superconductors, and glass polishing. This is not a complete list, by the way. They are also used in the manufacture of military items, like missile guidance systems,
These rare-earth oxides are used as tracers to determine which parts of a watershed are eroding. Clo...
These rare-earth oxides are used as tracers to determine which parts of a watershed are eroding. Clockwise from top center: praseodymium, cerium, lanthanum, neodymium, samarium, and gadolinium.
Peggy Greb, US department of agriculture
There is one mine in the United States producing rare-earth minerals, but it is reliant on China for processing the material it pulls from the ground into usable end products. And it would take years for the U.S. to put into play moves made by the current administration to revive rare earth elements and other critical mineral mining.
Mountain Pass mine in San Bernardino County, California is the only operating rare earths facility in the U.S. The 50,000 tons of rare earth minerals they mine every year are shipped to China for processing. China has imposed a 25 percent tariff on these imports during the trade war.
This leaves the two global economies in an interesting position. Both Beijing and Washington are looking to become less dependent on foreign markets for raw materials, particularly rare earths. China will eventually move to reduce exports of rare earths to meet its own domestic demand, and Trump is pushing to have the U.S. mine its own minerals.
What are the rare earths?
Most people, unless they happen to be geologists or are in a profession that uses some of them, have probably never heard of some of the rare earth elements used in manufacturing today. They are a group of 17 elements - lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium, yttrium - that are found in low concentrations in the ground.
Molycorp rare-earth mine and processing facilities - Mountain Pass  California.
Molycorp rare-earth mine and processing facilities - Mountain Pass, California.
AlanM1 (CC BY 3.0)
Mining and processing of rare earth minerals is difficult and very costly. In 2017, China accounted for 81 percent of global rare earth elements production. Added to this - There are actually very few alternative suppliers that can compete with China.
Ryan Castilloux, managing director at Adamas Intelligence in Amsterdam, said he doubts China would put a ban on rare earth exports to the US. “It would be a last leverage in a very extreme situation,” Castilloux said. “Once China uses its rare earth dominance as a political tool, it would push end users to look for alternatives.”
And while what he says may be true, it won't be something that can take place in a few months. It will take years, and what will manufacturers of essential products like smartphones, DVD players and computers do in the meantime?
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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