Trade war battlefield: US desperately searches for rare earth metals as China hints at export ban

The US Department of Defense is exploring opportunities to purchase rare earth metals, vital for the country’s weapons industry, from African countries after ominous reports that China may cut the supply chain.

Washington is currently in talks with rare earth miners from Malawi and Burundi with the initial negotiations seen as an attempt to seek new sources of crucial supplies outside China, which accounts for 80 percent of US imports of the material, Reuters reports.

“We are looking for any source of supply outside China. We want diversity. We don’t want a single-source producer,” Jason Nie, a material engineer with the Pentagon’s Defense Logistics Agency, said.

In May, Chinese president Xi Jinping paid a visit to China’s biggest rare earths mine in Jiangxi province. The visit followed the US blacklisting of Chinese telecom major Huawei, banning American firms from supplying components to the corporation.

In the context of the running trade battle between the world’s two biggest economies, Xi’s visit to the mine triggered speculation that Beijing could stop exporting rare earths to the US, using the export as one of its nuclear options to retaliate against Washington’s restrictions.

Though the Chinese authorities haven’t made any official statements on the issue so far, some of the country’s state-controlled media outlets have been sending signals that the measure could be easily implemented if the trade conflict escalates.

Rare earth metals are a group of 17 chemical elements, namely gadolinium, holmium, dysprosium, europium, ytterbium, lutetium, neodymium, praseodymium, promethium, samarium, terbium, thulium, cerium, erbium, scandium, yttrium and lanthanum. They are not rare but difficult to find in necessary concentrations, and difficult to process as the ores often contain naturally occurring radioactive materials such as uranium and thorium.

The elements are widely used by manufacturers of products such as cell phones, automobiles, military equipment, and even dishwashers.

Rare earth metals are extracted by miners from India, South Africa, Canada, Australia, Estonia, Malaysia and Brazil. However, China has a third of the world’s rare earth elements in reserves and is by far the biggest exporter.

When it comes to the US, the only mine dealing with the unique elements is the privately-owned Mountain Pass, located in California. MP Materials, which runs the field, is planning to open a processing facility next year. Last month, Texas-based Blue Line signed a memorandum of understanding for the construction of a rare-earth processing facility with Australia’s Lynas. It is the only non-Chinese company with significant capacity.

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