WASHINGTON – Rare earths are among the most critical raw materials on the planet, deeply embedded in the technologies that underpin modern life. Yet few people have heard of them or know what they do.
With obscure names like lutetium and dysprosium, rare earths are used in everything from iPhones and magnetic resonance imaging machines to missile guidance systems. More recently, demand has been propelled by the green tech that is helping to cut carbon emissions.
The world has long been reliant on China for rare earths, but Western nations are looking to diversify their supply chains.
US President Donald Trump has homed in on the mineral riches of Greenland, mooting a potential takeover of the Danish territory. He has also expressed a desire to arrange a supply deal with Ukraine.
What are rare earths?
The rare earths are a set of 17 metallic elements, grouped together because of their chemical similarities. Their optical, magnetic and electrical properties make them suitable for a wide variety of applications.
Terbium and yttrium, for example, enable the vibrant colours on smartphone and television screens, while the ability of cerium to facilitate chemical reactions means it is commonly used in catalytic converters to clean up car exhaust fumes.
Neodymium and praseodymium have been harnessed to create permanent magnet motors.
These can convert the electricity stored in a battery into motion – to rotate the wheels of an electric vehicle, for instance.
They can also work in the opposite direction to turn motion into electricity, such as from the spinning of wind turbine blades.
How rare are they?
Contrary to their name, rare earths are actually quite common in the earth’s crust – cerium is more abundant than tin or lead. But the challenge is finding them in a high enough concentration in one place for mining to be cost-effective.
Extraction can be harmful to the environment, as large amounts of water and energy are needed to separate rare earths from the rocks in which they reside. There is also a risk that mining them will contaminate local soil and groundwater, as rare earths are often found together with radioactive elements like uranium and thorium.
Who are the main suppliers?
The world’s biggest producer of rare earths is China, responsible for around 70 per cent of the volumes dug up from mines. It is also home to half the world’s reserves, which refers to deposits that can be economically extracted. Other large reserves can be found in Australia, Brazil and Russia.
China produced 270,000 tonnes of rare earths in 2024, doubling its output over five years, while the US came a distant second with 45,000 tonnes, according to the latest data from the US Geological Survey.
The US has about 1.9 million tonnes of reserves, but little capacity to refine them. In fact, most countries are forced to send the rare earths they mine to be refined in China, as it also dominates the processing of these materials.
How has Mr Trump weighed in?
Having floated the idea of buying Greenland during his first presidential term, Mr Trump returned to the White House insisting that the US should take control of the island, which is a trove of natural resources, including rare earths.
The self-ruling territory in the Danish kingdom has the eighth-largest reserves of rare earths in the world.
Mr Trump has also said he wants access to rare earths from Ukraine in exchange for aiding its defence against Russia’s invasion.
“They have great rare earth, and I want security of the rare earth,” he said on Feb 3.
The slight snag in that plan is that Ukraine does not have any known major reserves of rare earths – at least according to the US Geological Survey.
The specific classification of “reserves” would indicate the value of any rare earths that Ukraine has outweighs the cost of extracting them.
It seems likely that Mr Trump used the term “rare earth” to refer to critical minerals more broadly.
The US has a list of 50 critical minerals it considers important for its economy and national security, and Ukraine does have significant reserves of several of these elements, including titanium, lithium and graphite.
How much leverage does China have over the market?
China has long recognised its edge when it comes to rare earths. Leader Deng Xiaoping said back in 1992 that “the Middle East has oil, China has rare earths”.
Its sway over the market became apparent in 2010 when it blocked exports to Japan for two months after a flare-up of a maritime border dispute.
That sparked a long road of Japan trying to reduce the dependence of its rare earths supply on China, which it trimmed from 80 per cent to 90 per cent to 60 per cent, former economic security minister Takayuki Kobayashi told Bloomberg News.
China’s central government has a firm grip over the country’s rare earths production and exports. It has been flexing its muscles in recent years as tensions ratcheted up with the US over access to semiconductors.
Beijing tightened export controls on germanium and gallium – both used for making chips – in 2023 and followed up with a ban on US-bound shipments of these two elements plus another, antimony, in late 2024.
Applying further pressure, this clampdown dovetailed with rules prohibiting foreign companies and countries from helping US manufacturers evade the export controls.
Beyond the materials themselves, China has also restricted the export of technologies used to process rare earths, bolstering its command over refining activities.
If the tariff battle with the Trump administration escalates, China could use its influence over rare earths supply as a retaliatory tool.
How have other countries tried to counter China’s dominance?
China’s ability to turn its exports up or down is hanging like a sword of Damocles over the market.
Knowing that China is sitting on an abundance of rare earths has, for the most part, kept prices depressed and discouraged investment in projects elsewhere around the world.
Policymakers are trying to spur the rare earths supply chain outside of China.
The European Union’s Critical Raw Materials Act set targets for domestic extraction, processing and recycling of key minerals including rare earths. But creating an industry effectively from scratch will be a challenge, especially considering the years-long process of getting a mine up and running.
Others are further along. MP Materials reopened the Mountain Pass mine in California’s Mojave Desert in 2018. This is the only operational rare earths mine in the US and now also has refining capabilities.
The company started using the materials mined at Mountain Pass to produce rare earth magnets in Texas in early 2025, which it will supply to General Motors, among others.
The US has tax credits that incentivise rare earths production, introduced as part of the Inflation Reduction Act under President Joe Biden’s administration.
MP Materials received US$58.5 million (S$79.4 million) in the form of the 48C tax credit for its Texas facility. However, the future of the IRA tax credits under Mr Trump remains unclear.
Over in Brazil, its first rare earths mine, Serra Verde, began commercial production in early 2024 and is ramping up its output, hoping to reach 5,000 tonnes in 2026.
It was classed as a project that is critical to the global energy transition by the Minerals Security Partnership – a US-led coalition of 14 countries plus the EU that is trying to develop a counterweight to China’s control of supply chains. BLOOMBERG
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