What are rare earth metals & why they are China's ‘nuclear option’ in trade war with US

The escalating US-China trade conflict has raised concerns about the measures each side could use in their fight, including Beijing’s option to restrict exports of rare earth metals.

The economic measure is dubbed as one of Beijing’s nuclear options in its battle with Washington due to the fact that China is the top producer of rare earth metals and holds the largest reserves.

Rare earths are “certainly weapons that China can use in its trade negotiation arsenal against US President Donald Trump,” independent political analyst Alessandro Bruno told RT.

“To demonstrate their strategic importance, rare earths are among the few Chinese items that Trump (or his officials) has excluded from the list of items subject to extra tariffs/duties,” the expert said, adding that “China understands the strategic importance of rare earths and it establishes export quotas.”

The United States relies on China, the leading global supplier, for about 80 percent of its rare earths.

But what are rare earths, what are they used for, and why do they matter for all of us?

Rare earths or rare metals are a group of 17 chemical elements with special characteristics. The materials are actually not rare, despite their name, but they are difficult to find in the desirable concentrations and they are difficult to process as the ores often contain naturally occurring radioactive materials such as uranium and thorium.

The group consists of yttrium and the 15 lanthanide elements (lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium). Scandium is found in the rarest earth element deposits and is also classified as a rare earth element.

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The elements are often referred to as “rare earth oxides” because many of them are typically sold as oxide compounds.

China controls around 85-95 percent of all the rare earths’ production and supply. Last year, the country produced about 78 percent of the global volume of rare earths.

The metals and alloys that contain them are used in many devices that people use every day such as computer memory, DVDs, rechargeable batteries, cell phones, catalytic converters, magnets, fluorescent lighting and so on.

During the past 20 years, there has been an explosion in demand for many items that require rare earth metals. There were very few cell phones in use then but the number has risen to over seven billion in use today. Rare earths’ use in computers has grown almost as fast as the number of cell phones.

Many rechargeable batteries are made with rare earth compounds. Demand for the batteries is being driven by demand for portable electronic devices such as cell phones, readers, portable computers, and cameras.

Rare earths are also used as catalysts, phosphors, and polishing compounds for air pollution control, illuminated screens on electronic devices, and much more. All of those products are expected to experience rising demand.

The military uses rare earth elements in night-vision goggles, precision-guided weapons, communications equipment, GPS equipment, batteries, and other defense electronics.

“Then there are the aerospace and defense considerations. The US Department of Defense is concerned about the lack of adequate US supplies of rare earths, noting it compromises weapons manufacturing capabilities,” said Bruno.

He explained that China could cripple global industry, especially emerging technologies, if it were to ban exports of rare earth materials. There are very few options in sourcing those essential technology metals from anywhere else, the analyst said. “Of course, China does not necessarily want to do this, because, it plays a long game – and it does not want the West to develop alternatives.”

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