The Rare Earths Industry, and How China Conquered It

Rare earths are a set of elements that have an incredible degree of importance in the modern world. I want to go over and make mentally digestible to a layman the subject in general, and demonstrate how China managed to become the top leader in their mining and processing, and what this may mean going forward as we enter the New Cold War.

I’m going to split this into two parts: the first part will be about what rare earth elements (REEs) actually are, and how they’re mined and processed. This isn’t strictly necessarily for understanding the second part, which is what they’re used for and how the industry has evolved, so feel free to skip to “How Did The Rare Earth Industry Develop, and How Did China Conquer It?” on the table of contents on the right.

What is a Rare Earth Element?

There are 17 elements that are classified as REEs; these are scandium, ytterium, and the whole Lanthanide Group: lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium. These are all generally stable and nonradioactive elements, aside from promethium. Yttrium, despite not being a lanthanide, has very similar properties and so is grouped in. Scandium is actually more similar to the ferromagnesian elements - think iron and nickel - but in some circumstances it behaves a lot like an REE, so it gets to join the club.

The reason they’re called “rare earth elements” is due to the circumstances of their discovery. The only place in the world where they could be found in the 19th century was a town called Ytterby in Sweden, thus making them rare, and in French, an oxide of an element is called the “terre” or earth of that element, and these elements were found as oxide minerals. However, since then, we’ve found that some of these elements, such as cerium, are actually more common than lead in the Earth’s crust - and even the rarest ones, like lutetium, are orders of magnitude more common than gold.

REEs tend to have quite high ionic radii, which makes them difficult to fit into minerals when they’re forming when magma cools - in the business, this is a property called incompatibility. This means that as a magma cools down, such as in a magma chamber or some kind of intrusion near the surface, the parts that solidify and form mineral crystals first “reject” the REEs, kinda like unpopular kids not being picked for sports teams in school by team captains, leaving them behind in the remaining liquid rock. This continues until eventually a forming rock is “forced” to pick them up - there’s no other players for the team captains to choose for their teams.

The type of rock that forms at the end of this process is called a pegmatite. You might see the “ite” at the end and conclude that it’s a mineral with some kind of chemical formula, like other minerals like “calcite”, but it’s actually purely a description of texture - pegmatites are defined as being coarse-grained and having large crystals of a certain minimum size. Ytterby, the first mine that REEs were found in was, correspondingly, a granite pegmatite.

The Minerals

The principal minerals that REEs are found in are monazite, bastnaesite, xenotime, and eudialyte. These minerals actually do have chemical formulas - and if you’re curious, two of them are phosphate minerals - but all you need to know as a layman is that these are the main minerals which contain a range of REEs.

Monazite was the first one to be exploited, and typically contains a mixture of Light Rare Earth Elements (LREEs), which are the ones found on the left side of the lanthanides. However, it’s quite a heavy mineral, about twice as dense as a general granite, and resistant to weathering, so it tends to separate out from other minerals in the granite and concentrate into placers - which may be a familiar term if you know about the gold rushes a couple centuries ago.

Bastnaesite also tends to contain LREEs, though it does also have significant amounts of yttrium and small amounts of HREEs (the right side of the lanthanides). In the modern day, bastnaesite has taken monazite’s throne as the primary LREE ore. It’s widespread but doesn’t occur in large quantities, and occurs in a greater variety of rocks than just pegmatites, such as carbonatites (igneous rocks that have a lot of carbonate minerals; imagine melting and resolidifying limestone and chalk).

Xenotime contain a relatively larger proportion of HREEs. It forms in pegmatites and also metamorphic rocks - which is the rock class in between sedimentary and igneous rocks that have been “cooked” to high temperatures but not completely melted and reformed by heat and pressure, giving them interesting properties and appearances that we don’t have time to talk about.

Eudialyte is easily dissolvable in acid and tend to be sources of other elements, like zirconium, but also contain some REEs.

There are numerous other minor minerals that contain one or two REEs, but it is typically not economical at this time to extract them.

What are they used for?

There’s no way that I can be comprehensive nor particularly detailed with this list or we’d be here all day, but I’ll go through each element in turn and give a few interesting things that they’re used in. Feel free to skip this part.

::: spoiler List of uses

Scandium: mainly used to make aluminium alloys. One isotope (essentially a different version of that element with a different number of neutrons, these tend to be at least somewhat radioactive but not always) is used in oil refineries. Sometimes used in lightbulbs and lights.

Yttrium: many uses: it’s used in alloys, color television and monitor displays, camera lenses, superconductors, and magnetic recording.

Lanthanum: an abundant REE, it’s always used in alloys, e.g. for battery alternative metals, catalysts for the petroleum industry, optical glasses, and superconductors.

Cerium: another abundant REE, cerium oxide is widely used for polishing, for catalysts like lanthanum, for catalytic convertors, and for red pigments.

Praseodymium: alloying metal for the aircraft industry, pigments, glasses for welding, and some optical fibres.

Neodymium: probably the most famous REE of them all, it makes very strong permanent magnets, which are used in essentially everything that you can imagine which uses modern technology.

Promethium: a very radioactive element, it’s used basically entirely in research.

Samarium: can be combined with cobalt to make high strength magnets that work at high temperatures and are resistant to corrosion.

Europium: it’s main feature is its phosphorescence, and so used to be used in color televisions and monitors a lot, but nowadays has been superseded by other elements in many cases.

Gadolinium: has a lot of specialized uses, but none that are large scale. Used in nuclear reactor shielding, MRI scanning, and some alloys.

Terbium: used for chemical doping for some compounds, used in some luminescent materials, as well as alongside zirconium oxide for fuel cells.

Dysprosium: added often to neodymium magnets. Also used for cooling nuclear reactor rods.

Holmium: has the highest magnetic field of any element, so tends to be used for magnetic purposes.

Erbium: used as a photographic filter, safety goggles, optical fibers, and lasers.

Thulium: few applications due to its cost and rarity; sometimes used in dopants and lasers.

Ytterbium: few applications due to its cost and rarity, sometimes used to strengthen steel and as an industrial catalyst

Lutetium: rarest REE, sometimes used as a beta particle emitter, in bubble memory when that was a thing, and PET scanners.


The Balance Problem

I couldn’t find a place to put this section in the main narrative but it’s worth mentioning.

The “balance problem” is essentially just the observation that because not all REEs are used equally - for example, the big superstar is neodymium, with others of similar abundance not used quite as much - and because ores containing REEs often will contain a mixture of lots of different REEs, then you inevitably end up with a situation where you’re stockpiling the less used elements in larger and larger quantities as the most used ones get traded away. The price of stockpiling these excess REEs goes up and up and the market price for them goes down as supply increases, and because a mining company must (under capitalist logic) make a profit, this introduces a pressure that makes them not want to mine as much ore (due to stockpiling costs) but simultaneously need to mine more ore (because often the minor elements are what the world economy needs more of), so it’s difficult to achieve an overall balanced market.

There are five proposed solutions to the problem:

  1. Find uses for the elements that aren’t used very much.

  2. Find substitutions for elements that are used a lot.

  3. Mine ores outside of the big three of monazite, bastnaesite, and xenotime that contain only one or two REEs (but this is, under capitalism, less economically feasible, and even not under capitalism, still introduces big environmental concerns to other places)

  4. Recycle REEs more.

  5. Reduce their use as much as possible by using them more efficiently.

How Did The Rare Earth Industry Develop, and How Did China Conquer It?

So, you either read the introduction in the comments and know what an REE is, or you didn’t because you already have the basic idea that these are some important magic metals which countries need to make things that are technologically advanced, which is really all that’s important if you’re not interested in geology. Onwards!

While we could begin centuries ago with their discovery, I will skip past all the initial discoverers as it’s not really relevant to us. Instead, the story will begin - kind of - in the 1960s. Before this time, only about 2000 tons of REEs were produced every year, and these were mostly sourced from monazite and xenotime ores - two of the big three REE ores, if you didn’t read the introduction - and it was discovered in this decade that europium had properties that advanced the development of cathode ray tubes inside color televisions.

In 1964, the Mountain Pass mine in California began to be exploited, a source of bastnaesite ore (the third of the big three ores, and the most important REE ore today). The Mountain Pass mine was initially designed to extract europium, but other REEs were extracted with time, and with larger quantities to work with than previous, obscure sources, scientists could research their properties and find uses for them. This mine was the dominant source of light REEs (that is, the REEs on the left side of the lanthanide group, and much more common than the heavy REEs) in the West until the 1990s, and was owned by Molycorp.

However, in the 1980s, China entered the scene.

In 1986, Deng Xiaoping approved Program 863: The National High Technology Research and Development Program. This program focused on biotechnology, space, information, laser, automation, energy, and material science, and the objective of it was to close the gap between China and the rest of the world and achieve a strategic foothold. REEs were a part of each scientific area that Program 863 focused on - the potential value of these elements was very apparent to the Chinese scientific leadership. In 1997, China’s Ministry of Science and Technology introduced Program 973, which is the largest basic research program in China. Research projects inside this program could last five years and receive money on the order of a couple million dollars. These two programs were not the only programs relating to REEs, but they are by far the two most important ones.

To cover how China managed to acquire its REEs, we’ll need to go back to 1927. At this time, a geologist discovered iron deposits at a location called Bayan Obo in Inner Mongolia, China - and seven years later, the presence of bastnaesite and monazite was discovered too. In the 1950s, exploitation of the mine began for both iron and REEs. At this time, of course, there were few uses for REEs and so they were not particularly commercially exciting - but the iron ore mined here was, and provided the income necessary to keep extracting the REEs alongside the iron.

One of the key figures around this time was Xu Guangxian, who is regarded as the father of Chinese REE chemistry. Achieving a Ph.D. in chemistry in the United States and then returning to China after the outbreak of the Korean War, he went to work at Peking University. He initially researched metal extraction, and then in 1956 switched to radiation chemistry and the extraction of nuclear fuels, helping China eventually develop nuclear weapons. After the Cultural Revolution began in 1966, Xu turned to theoretical research, and then was accused of being a spy for the Kuomintang and imprisoned until 1972, after which he was released and returned to developing REE extraction methods, using what he learned from extracting uranium isotopes. In the 1990s, he chaired the chemistry sector of the National Natural Science Foundation. By 1999 he was still unsatisfied with Chinese REE development, and continued to push the industry hard. In 2009, he won the State Supreme Science and Technology prize, the Chinese equivalent to the Nobel Prize. He died at the age 94 in 2015. He was a steadfast supporter of the importance of the field of chemistry, despite it appearing to many STEM students as merely an accompanying field to the more exciting field of physics.

Back to the late 20th century. Global consumption of REEs was synergistic with Chinese production and research into their properties. Between 1978 and 1989, China increased its production by an average of 40% every year. As their production grew and Chinese REEs flooded the market, the profits that other countries could gain from REEs plunged, and in the 1990s, Western mines substantially reduced production or shut down entirely. In 1992, Deng Xiaoping proclaimed “There is oil in the Middle East; there is rare earth in China.” Seven years later, President Jiang Zemin wrote “Improve the development and application of rare earth, and change the resource advantage into economic superiority.”

Xu Guangxian established two state laboratories in China, both of which focus on REEs; the State Key Laboratory of Rare Earth Materials Chemistry and Applications in Peking University, Beijing; and the State Key Laboratory of Rare Earth Resource Utilization in Changchun. There are two other REE-dedicated laboratories in China: the Baotou Research Institute of Rare Earths, the largest rare earth research and development institution in the world; and the General Research Institute of Nonferrous Metals (though this one is, as the name suggests, not exclusively focused on REEs). Each of the four laboratories focuses on a different aspect of REEs. One focuses on applied research, one on basic research, and two on industrial applied research. There are additionally two publications dedicated to REEs: the Journal of Rare Earth and the China Rare Earth Information journal.

Chinese mines have also advanced beyond Bayan Obo, with other REE deposits exploited in Baotou, Shangdong, Jiangxi, Guangdong, Hunan, Guangxi, Fujian, and Sichuan, to name a few places.

China faced, and still faces, two major problems with REE production: it’s tremendously environmentally damaging, and production by illegal companies and smuggling disrupts markets.

According to the Chinese Society of Rare Earths, for every ton of REE produced: approximately 8.5 kilograms of fluorine and 13 kilograms of dust; approximately 10,000 cubic meters of waste gas including various acidic substances; 75 cubic meters of acidic wastewater; and one ton of radioactive waste residue, is produced. The water runoff contaminates the surrounding area and irrigated farmlands. One ton of REE also produces 2000 tons of mine tailings, which are the ground up rock left behind from mining it, which often contains radioactive thorium. These figures may have improved as years have gone by, but the environmental impact is still large to this day. Xu Guangxian wrote in 2005 of the consequences of this thorium entering the water in the local area and the Yellow River, upon which hundreds of millions of people depend.

In 2008, about 20,000 tons of REE minerals were smuggled out of the country; compare this to official production of 40,000 tons. The lack of control over the smugglers means that prices are kept low and illegal companies have even less concern for environmental impacts. China’s development plans in this field have routinely focused on introducing regulations and policies to combat smugglers. I have been unable to find decent figures for the current state of illegal mining in China, although this Reuters article from 2019 suggests that the crackdowns continue.

While I cover the uses of REEs more broadly in the introduction, it’s briefly worth mentioning them to give a context to upcoming events in the story. Several REEs have had their time to shine as their properties were uncovered and applied in technologies. I’ve mentioned europium already and its use in CRTs, though initially it had no use and was stockpiled. Lanthanum was used in the optical glass industry in the 1960s. Praseodymium and neodymium were used to make alloys for coloring glass. Samarium, like europium, initially had no uses and was stockpiled until it was discovered you could make powerful magnets by combining it with cobalt.

Magnetic technology is today the dominant use of REEs. In fact, I would wager that for most people the only REE they’ve heard of is neodymium, for its use in magnets (The famous “neodymium magnet” is actually usually an alloy of neodymium, iron, and boron, but I’ll continue calling it a “neodymium magnet” for simplicity.) Magnets made with REEs are stronger than those made of your more traditional magnetic materials like iron, and can be made much, much smaller, which is necessary in civilian technologies like computers and also military technologies like in missiles and aircraft.

In the 1980s, General Motors and Hitachi simultaneously developed neodymium magnets and fought a battle of patents, eventually deciding to create two different designs of magnets with each company taking one. In 1986, GM developed a division to produce their magnets called Magnequench. In 1996, two Chinese corporations joined forces with an American investment firm to acquire Magnequench, and the United States was like “Alright, so long as you keep Magnequench in America for a minimum of five years.”

Five years and one day later, in 2002, Magnequench’s entire operation in the United States disappeared, all equipment vanished, all employees were laid off, and it moved to China. At the time, nobody particularly cared - but it eventually dawned on the Americans that a big mistake had been made. In 1998, 90% of global magnet production was in the West, largely the US and Japan, though Europe had a relatively minor role too. In 1996, China was outputting just 2600 tons of sintered magnets, the type that Hitachi took. By 2007, China was outputting 80,000 tons.

Remember Molycorp, the owner of the Mountain Pass mine in California? In 1978, Unocal, the Californian oil business, purchased Molycorp, and production expanded over the decades, eventually producing neodymium in the late 1980s. In 2005, the China National Offshore Oil Corporation (CNOOC) submitted an $18.5 billion bid for Unocal, outbidding Chevron. A media and political frenzy commenced, and eventually CNOOC’s bid was withdrawn and the company acquired by Chevron. A close call for the US rare earth industry.

Another area of rare earth production at this time was Australia. The Lynas Corporation, an Australian company, planned to build a mine at Mount Weld in western Australia, but construction was suspended due to funding problems. In 2009, a Chinese corporation proposed that it would invest about $250 million in return for a 51% stake in Lynas. After much delaying and bartering on the part of the Australian government, including to try and reduce China’s stake below 50%, the Chinese withdrew their offer. Instead, they invested in another Australian rare earth developer, called Arafura Resources, based in the Northern Territory of Australia, which hasn’t yet begun production (though I don’t think they have a majority stake).

In 2009, the United States began a Government Accountability Office study to determine the risks of dependency on China. In September 2010, a maritime incident between Japan and China led to REE exports to Japan being de facto cut off. To do so officially would violate WTO rules, so it could not be de jure. Here is Naked Capitalism’s own reporting back in 2010 about this issue. (for those unfamiliar with the website, it is source of news and analysis that the News Megathread often uses):

Two aspects of the ban that don’t get the mention they warrant. First is that most US rare earth purchase go through Japan (Japan produces intermediary and finished goods using Chinese rare earths). Second, the ban is not across the board, but merely on raw materials. China is willing to sell manufactured goods with rare earths as significant content. Thus this change is also designed to try to use the rare earths near monopolies to force foreign buyers to more manufactured products from China, rather than simply raw materials.

One has to wonder whether the restriction was something China planned to do regardless, and the diplomatic dispute provided a useful cover.

Chinese officials have previously argued that the status quo was harmful to their reserves and their environment, with Chao Ning in 1996 saying:

“China cannot afford to continue to carry the burden of supplying the world, from a strategic, environment and economic point of view,” Chao said…

“China is not the only country that has these deposits, but it has been carrying the lion’s share of the supply in more than a decade, at the cost of quickly depleting its own resources and hurting its environment,” Chao said.

By 2009, despite China controlling over 90% of REE production, it had only 30% of global reserves, as other sources were found in other countries. So on the one hand, given what we’ve already seen are the tremendous consequences of REE mining on the environment, it is understandable that China would feel exploited by the rest of the world, especially as the reason China had this near-monopoly at all was due to low prices due to low labor costs and so on. On the other hand, given Deng and other Chinese leaders’ comments, it appeared they seemed quite fine with bearing this burden for the geopolitical importance it gave to China - and they seemed quite happy to continue investing in foreign companies to ship their REE minerals to China for processing. I would need to do more research than my free time allows to give a good answer to this conundrum, but it seems plausible that both of these lines of reasoning were true, and like how we see in Middle Eastern oil-producing states today, there appears to both be a genuine understanding that this situation of massive oil production cannot continue indefinitely if the state is to survive in the long term as reserves will eventually run out, but actually acting on that reality is difficult due to the massive potential profits and the geopolitical role of OPEC.

Anyway. Japan was China’s largest market for REEs, needed for high-tech goods. Japan released a detained Chinese fishing captain and backed down, humiliating the Japanese, but the broader damage to China was done - the prices for REEs surged around the world. Again, I think Yves at Naked Capitalism says it all:

Even if China wins this round, this is an extraordinarily heavy-handed and short-sighted move. China is telling the world loud and clear that it is an unreliable partner. China is conducting this ban apparently without issuing formal regulations, which would subject it to WTO sanctions. But for it to think this action won’t lead to retaliation is naive, when political pressures abroad make China an easy target.

And it was rather counterproductive. Whatever China’s motivation was, it simply did not have the strength in 2010 to compel other states to its whim in any meaningful capacity. Worldwide interest in restarting old, and developing new mines increased as the prices of REEs did. To be clear, the interest did not start from zero - several countries, like the US, Japan, Australia, Canada, South Africa, and Kazakhstan were already working on REE mining leading up to 2010. But China’s attempt to flex its muscle lead to a concerted effort against it. By 2013, Molycorp and Lynas were delivering REEs to global markets. Rhodia in Europe joined the REE blitz and hundreds of companies around the world raised money for new mining projects. In fact, part of the reason why I’m able to write this essay in the first place is because of the reports that were written during this very frenzy.

Needless to say, when looking through material writing this essay, the Western sources get very smug around this point. A typical sentence from one of these reports might as well be boiled down to “We’re showing those communists what-for! You can’t get away with manipulating global markets for your own domestic gain!” without even a shred of self-awareness. But you may have noticed that China’s share of world REE markets has not been brought to shambles. By my count, China made up something like 70% of REE mine production in 2022, with the next largest competitor, the USA, at 14%; and god knows how much foreign ore is processed in China. And that is because the story is not yet over.

China quickly ended its unofficial embargo to Japan, but the damage was done. Regardless, China began raising its export duties from 10% to 15% and then 25% in 2011, in order to retain them for their own market. The same happened to ferro-alloys, containing more than 10% REEs. Chinese exports of REEs subsequently dropped, and prices as much as quintupled; this whole saga is called the REE Crisis.

These export tax increases were a violation of China’s WTO commitments, and the US filed a protest against this, followed by other Western countries. To quote Obama:

“We want our companies building those products right here in America,” Obama said. “But to do that, American manufacturers need to have access to rare earth materials which China supplies. Now, if China would simply let the market work on its own, we’d have no objections.”

Instead, Chinese policies “currently are preventing that from happening and they go against the very rules that China agreed to follow,” Obama continued.

To which China responded:

Beijing defended its approach Tuesday.

“China has worked out its own policy on managing rare earths, which is in line with WTO regulations,” Liu Weimin, a spokesman for the Chinese Ministry of Foreign Affairs, said at a news conference. “Our policies tackle not only the export of rare earth but also its production and exploration.”

The United States accuses China of hoarding the valuable minerals for its own use. But China said its restrictions are motivated by environmental concerns.

In 2014, the WTO rejected China’s argument and ordered China to remove the ceiling on exports of REEs, and cancel its export taxes on them in 2015. In April 2015, China lifted export taxes. However, by this point, global prices for REEs had largely decreased - not always back down to levels before the crisis began, but the days of peak prices in 2011 were in the rear view mirror by 2015. The West would have been victorious… if they weren’t neoliberals.

The lowering of China’s export taxes subsequently knocked Molycorp back into bankruptcy and stopping production at Mountain Pass, and Lynas’s stock price declined by literally 99% (but managed to survive and rebuild itself, sending its REE ore to Malaysia for processing). The return of the low “China price” brought China back to a near-monopoly position - though not quite as near-monopoly as its glory days pre-REE Crisis - and its competitors shrank as they could not compete.

Molycorp was over and the Mountain Pass mine was shut down… until 2017, when it was acquired out of bankruptcy, revived, and today continues to produce REEs. It is the only REE mine in America today, and singlehandedly supplies about 15% of the global market. China could, for a time, take solace in the fact that the REE minerals were then sent to China for processing - until in early 2022, it was announced that it would instead be sending it to Japan. Meanwhile, Biden’s infrastructure plan has put renewed focus on rebuilding the industry, with some success. It will be difficult for the United States to rebuild a fully domestic REE processing chain, but it did have one before the 1990s - so, the logic goes, it can surely do so again. Lynas Corporation has received funding from the Pentagon to build two REE processing facilities, both in Texas. Efforts for REE recycling are receiving renewed attention too, as are attempts to construct vehicles that don’t use as many REEs.

The problem for America will be the issues that have plagued China for the last three decades of their supremacy - for example, the environmental problems are substantial. And this course for full domestic self-sufficiency will take a decade, likely longer, in a declining Western empire.

As for how China is getting on, I can’t say it much better than this article from 2022 does:

Late last year, three of the previous six companies were merged to form the China Rare Earth Group Co., an industrial conglomerate that holds almost 70% of China’s annual heavy rare earth production quota. With the latest consolidation, the entire rare earth industry in China (especially upstream and midstream) is now under two mega-conglomerates, one in the north and the other in the south.

Industrial consolidation serves multiple objectives. First, this is part of China’s efforts to boost cost competitiveness, increase production efficiency, and strengthen its grip over pricing. Second, it is seen as a way to curtail illegal rare earths exports and an opportunity to implement and enforce better environmental standards for the industry.

Third, with consolidation, China is also empowering these large conglomerates to go global. The latter is important as China faces the increasing need to import rare earths products for feeding mid- and down-stream sectors.

As a further measure, the central government has arranged to include two R&D companies in the new consolidated group to strengthen the power of domestic innovation in the rare earth industry. Innovation and technological advancements will define the future product and process innovations of China’s rare earth industry.

As of now, China is able to produce only about half of the high-performance magnets that go into EVs and wind turbines. Japan and Germany account for the remaining high-performance magnets, with Japan’s Hitachi Metals owning most of the patents for advanced sintered NdFeB magnets. But these figures are likely to change.

In the middle of 2019, as the trade war with China under Trump was gathering steam, we saw a return of the idea of an REE embargo by China. To quote from The Verge:

One particularly chaotic option would be a ban on the export of rare earths — raw materials that are crucial for electronics. These elements are produced mostly in China, and used in the US for everything from electric cars to wind turbines, smartphones to missiles.

Chinese state media have backed the idea, calling America’s dependence on Chinese rare earths “an ace in Beijing’s hand.” President Xi Jinping hinted at that possibility when he visited a rare earth facility at the beginning of this week.

The Verge, and similarly sources that Naked Capitalism quotes from, were rather dismissive of this possibility, and given the example of how the 2010-15 REE Crisis resulted not in the West kissing the ring but instead a worldwide effort to construct alternate supplies, it is understandable why it is seen that way. And once again, as the sanctions war on China seems to be amping up, we see rumors and suggestions that maybe, just possibly, China might restrict REE exports to retaliate.

Truthfully, I do not know if such things are being seriously considered in China, let alone how things would go. The China of 2023 is not the China of 2010, and the same goes for the West but with a reversal of power.

But there are certainly some interesting lessons to draw from Russia’s experience being sanctioned over the Ukraine War. Russia did not even have a complete monopoly over European energy, and yet when it was slowly cut off, and the Nord Stream pipeline destroyed by the United States, it has resulted in a seemingly inevitable deindustrialization for the continent. High-energy industry like aluminium smelting has fallen drastically - though, of course, Europe boasts that they have survived the winter. Bankruptcies of all kinds have risen dramatically. The EU might well do worse than Russia this year in terms of economic growth, and the UK in particular seems to be locked in a depression in which their only recourse is advanced mortgage magic and frantically trading money back and forth to make it look like their economy isn’t going down because GDP isn’t.

Mining cannot be turned on instantly. It would take several years to construct these alternate, domestic supply chains, especially under conditions of energy scarcity - and given that the US and China are set for a Great Divergence, a recession in the West does not appear to be causing economic turmoil in China, which would continue to develop its own REE supply chains and mining.

So I do not know what will happen. Perhaps China will reason that it is best to continue trying to be the world’s largest REE producer and not rock the boat unless the West cuts them off first. Perhaps China will instead reason that this is a one-in-a-lifetime opportunity to fundamentally weaken the American Empire and take offensive action. But Western confidence that things will go well; that rare earths are not that rare; that China doesn’t understand its own weakness - we’ve heard similar things all before about Russia, the gas station masquerading as an economy, and look where we are now.