Rare Earths Claiming Centre-stage in Geopolitics?

That geopolitics has always been about trade, but this time rare earths seem to be taking the centre-stage, even playing a vital role in China-United States bilateral tariff negotiations.

China being the biggest producer of rare earths, holds a near monopoly over global supply chain, so much so that even nations like United States and India to name a few, are trying to find alternative to over dependence on China. India yesterday entered an agreement with five Central-Asian nations for exploration of rare earth elements. The five nations include Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. The countries have decided to speed up the process of cooperation so that the work of exploration could begin soon.

As reports suggest, it is the rare earth elements that are playing decisive bargaining role in trade negotiations, just as it is doing in tariff negotiations between the U.S. and China. China being the biggest producer of the elements, holds the key to the supply chain too, and can even use rare earth elements’ supply as a weapon to decide trade rules.

What are the rare earth elements?

The rare earth elements are not actually rare, but their extraction and processing is difficult—which is why the name. They are often dispersed and not found in concentrate deposits for economically viable mining. The rare earth include 17 elements: scandium, yttrium, and the 15 lanthanides: praseodymium, neodymium, cerium, samarium, europium, gadolinium, promethium, dysprosium, holmium, terbium, erbium, thulium, lutetium and ytterbium.

Use

Strategic use of the rare earth elements has made the minerals very valuable today and hence geopolitics can often be shaped up by them. They are used in vast areas today, like in defense, in making of fighter jets, in flight-control systems for guided missiles, in renewable energy technology, electric vehicles, making of rare earth magnets, and in cell-phones to name a few. In today’s world where weapons not just play as deterrents, rare earth elements is the need of every other nation that wants to have a say in international politics.

China-India

Since April this year, China began curbs on export of rare earth minerals to India. Supply curb on rare earth magnets too is in place. The rare earth magnets are used in electric vehicles, and companies producing electric vehicles are affected by the curb on the supply chain.

China has put a curb on supply of rare earth elements and rare earth magnets to India, forcing Indian automakers to face problems in production. This has forced India to think for an alternative to decrease dependence on China for rare earth elements and rare earth magnets, and has moved to cooperate with Central-Asian nations for exploration of rare earth elements.

Trump-Xi Telephonic Talk

U.S. President Donald Trump and Chinese President Xi Jinping’s telephonic conversation a few days back centred on trade and tariff, and according to reports the Chinese president agreed to further talks to ease the flow of supply of rare earth magnets to the United States.

Who are the big Producers?

China is the biggest producer with a production of about 60 per cent of the global supplies. As per the estimates of U.S. Geological Survey, Mineral Commodity Summaries, 2024, China has the highest reserve of rare earths, which is 44 million metric tons.

Brazil has the second largest rare earths reserves with an estimated reserve of 21 million metric tons. The production however is much too less at present.

India, another Asian giant and neighbour of China holds third in rare earths reserve with an estimated reserve of 6.9 million metric tons.

Australia that stands fourth in the rare earths reserve with a reserve of 5.7 million metric tons, is followed by Russia that has a deposit of 3.8 million metric tons and Vietnam at 3.5 million metric tons.

United States has only 1.9 million metric tons of rare earths reserve, and hence has to depend on supplies from trade partners like China, a reason why China holds the key to tariff war, and likely to use it to its trade advantage. United States, however, had a production volume of 45,000 metric tons in 2024, which is fairly a good volume.

Greenland also has a fairly good volume of rare earths reserve, estimated at 1.5 million metric tons. Trump had even offered to buy Greenland for its minerals a few days ago.

How does the rare earth minerals’ refining work?

There are refineries which process and refine rare earths, and the processing is quite cumbersome. It involves several stages that include ore concentration, acid leaching, solvent extraction and metal extraction.

Rare earth magnets

Rare earth magnets have high magnetic strengths and because of this they are used in crucial works like computer hard disk drives, audio speakers, electric vehicle motors, wind turbines, electric and hybrid vehicles etc.

No wonder why rare earths are grabbing centre-stage in geopolitics today!