Moscow, July 8 — “Lead. Economy.” The dominant position of China as a supplier of rare earth metals, which are used to produce a variety of products — from consumer electronics to high-tech military equipment — is causing concerns on the background of a trade war, writes Oilprice.com.

Photo: EPA/QILAI SHEN

The visit of President XI Jinping to the enterprise for the production of rare earth metals JL MAG Rare-Earth Co. in Jiangxi in may sparked speculation that China may use its position in the market of rare earths as a weapon in the trade war.

Such a precedent already exists. In 2011, when a territorial dispute between China and Japan escalated, Beijing imposed an embargo on exports of rare earth metals to Japan. This has provoked jump of the prices, as all began to accumulate reserves in case of further aggravation of the situation, yet did not intervene, the world trade organization and China have not abolished the embargo.

Rare earth metals are a group of 17 elements, including gadolinium, holmium, dysprosium, europium, ytterbium, lutetium, neodymium, praseodymium, and promethium, samarium, terbium, thulium, cerium, erbium, scandium, yttrium and lanthanum.

The elements of this group are used in batteries for electric and hybrid vehicles and also for the production of computers, DVD players, wind turbines, catalysts in cars, monitors, televisions, lighting, lasers, fiber optics, superconductors, etc., Some rare earth metals necessary for the production of military equipment, including jet engines, missile guidance system, missile defense system, satellites and lasers.

The share of China, a dominant global supplier of rare earth metals, accounting for about 80% of U.S. imports of these items. They are also mined in India, South Africa, Canada, Australia, Estonia, Malaysia and Brazil. However, China controls almost all the world’s processing capacity of rare-earth metals.

The Mountain Pass mine in California, the only operating U.S. source of production of rare earth metals. However, MP Materials, the owner of Mountain Pass, sends about 50 thousand tons of concentrate per year from California to China for processing.

The problem of getting rid of this dependence has two aspects. On the one hand, rare earth metals are used in such small quantities that they are not sufficient for recycling and reuse. Only a few companies collect them for recycling and working on new processing technology, specifically designed for rare earth elements.

For example, Apple has created a robot Daisy, which is able to recover the 32 kilograms of rare earth metals per 100 thousand of the redesigned iPhone. Companies in Asia also trigger processing plants rare earth elements, but still relatively small scale.

The study of alternative materials is also underway with some success. However, rare earth elements remain the dominant option for electronics and other goods.

MP Materials said it plans to re-start the processing capacity at the Mountain Pass mine by the end of 2020. This would initiate a reduction in U.S. dependence on China.

As reported “Vesti. Economy”, Australian Lynas Corporation Ltd in may signed a Memorandum of understanding with the Texas based company Blue Line Corp for the construction of a plant for processing rare earth metals in the United States. This is another step to reduce dependence on China.

However, getting rid of the dominance of China in this area will take years. Meanwhile, global demand for rare earth metals will only grow with increasing demand for the production of which they are needed.

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