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One of the biggest trump cards China has with the U.S. is rare earth metals. The 17 elements that are rare earths are mined in the majority in China and are crucial to the modern economy, Electric cars, military, cell phones and wind farms.

Rare Earths

The 17 Elements That Are Rare Earths:

Llanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium, yttrium

Rare Earth Elements

All of these elements appear in low concentrations in the ground. Whilst they are more abundant than their name would sugegst they are extremly difficult and dirty to mine and process cleanly. With China having most of world’s processing capacity and supplying 80% of the rare earths imported by the United States from 2014 to 2017 it is a major trump card for China in the trade war.

Rare Earth Production

In 2017, China accounted for 81% of the world’s rare earth production, data from the U.S. Geological Survey showed. Read: American Military Companies Most Dependant on Chinese Rare Earth Supplies

There are just a few alternative suppliers to compete with China, home to 37% of global rare earths reserves.

In the U.S. California’s Mountain Pass mine is the only operating American rare earths facility. MP Materials, owner of Mountain Pass, ships the roughly 50,000 tonnes of rare earth concentrate it extracts each year from California to China for processing. China has imposed a tariff of 25% on those imports during the trade war. Notably the U.S. has not put any tariffs on Chinese rare earth imports.

Uses of Rare Earth

Australia’s Lynas Corporation Ltd is the biggest alternative to China's stranglehold and just this week signed a memorandum of understanding with Texa -based Blue Line Corp to build a rare earth processing facility in the United States. Lynas has been battling for years with the Mayalsia over it's processing plant here.

Rare earths are also mined in India, South Africa, Canada, Australia, Estonia, Malaysia and Brazil.

Source: Geology.Com

From The Traders Community Research Desk

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