China’s abundant supply of rare earth minerals, essential in the production of many technologies – and long considered an ace in the hole for deterring or responding to an escalated trade war – could become less of a strategic advantage if the US and its allies ease their demand by harvesting and recycling the materials from obsolete equipment.
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Recycling can be ramped up faster than new mines, which could take decades to become commercially viable, said Hu Xinyue, a senior analyst in the China programme at the Institute of Defence and Strategic Studies at Singapore’s S. Rajaratnam School of International Studies.
“From an environmentally friendly perspective, recycling reduces the need for new rare earth mining, thereby decreasing both the environmental and energy footprints associated with extraction and processing,” she said in a research paper released on Thursday.
China dominates the rare earth supply chain, controlling around 60 per cent of global mining operations and over 85 per cent of processing capacity. Hu said it has been “increasingly weaponising” its rare earth elements to impose costs on rivals in trade disputes.
The US increased tariffs on Chinese electric vehicles and other green technologies in September, but Hu said its heavy reliance on China for the rare earths needed to independently produce such technologies had “raised concerns that this dependency could become a significant vulnerability in the escalating tech war”.
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China’s rare earth exports rose 6.8 per cent by volume in the first 10 months of this year, according to customs data, but the authorities have banned the export of rare-earth-extraction technologies along with the technology to make rare earth magnets.