Recently, reports surfaced that former US President Donald Trump demanded half of Ukraine’s rare earth reserves as a condition for providing war weapons, drawing global attention to rare earth elements. Furthermore, the possibility of a mineral agreement between the US and Ukraine has emerged, shaking the international landscape surrounding these crucial materials.
Trump’s unusual demand is seen as more than just a play for Ukraine’s mineral resources; it signals an escalation in the US-China rare earth competition.
What are Rare Earth Elements?
Rare earth elements are a group of 17 elements in the periodic table, including the 15 lanthanides, scandium, and yttrium.
They are relatively abundant in the Earth’s crust but are rarely found in economically extractable concentrations, hence the name “rare earths.”
These elements are essential for producing advanced industrial goods like smartphones, electric vehicles, wind turbine generators, and sophisticated weaponry.
In particular, heavy rare earths such as neodymium and dysprosium are critical for manufacturing high-strength permanent magnets.
Rare Earths: Indispensable for Advanced Technology
The initial iPhone, launched by Steve Jobs in 2007, utilized nine of the 17 rare earth elements and rare metals. Indium was used in the glass, europium and terbium powders provided the red and green colors on the screen, and tantalum managed the power.
Cerium gave the screen a glossy finish, while neodymium was used in the camera lens, vibration sensors, and speaker magnets.
This highlights how indispensable rare earths are in modern electronic devices.
Rare earth elements are used as additives, where even small amounts can significantly enhance product performance. Neodymium, for instance, can increase the strength of magnets by more than tenfold, allowing for the creation of smaller, more powerful products.
This property makes them essential in the production of advanced weapons. A single F-35 stealth fighter requires 417 kilograms of rare earth materials.
The International Rare Earth Landscape
1. China’s Dominance in Rare Earths
China dominates the global rare earth production, using these resources as strategic assets to expand its international influence.
Deng Xiaoping famously stated, “The Middle East has oil; China has rare earth.” China has aggressively developed its rare earth mines and, in 1995, acquired the US company Magnequench to secure neodymium permanent magnet manufacturing technology.
By 2010, China had become the world’s leading producer, accounting for 75% of global neodymium permanent magnet production.
2. The US Drive to Secure Rare Earths
The US is actively diversifying its rare earth supply chain to counter China’s dominance.
The Trump administration recognized rare earths as critical to national security and implemented various policies to secure these resources.
The Biden administration has continued this approach, designating rare earths as key minerals and tasking the Department of Defense with developing strategies for their acquisition.
3. Ukraine’s Rare Earth Reserves
Ukraine is believed to possess significant rare earth reserves, particularly in its eastern regions. However, the ongoing Russian invasion has severely hindered the development of these resources.
Trump’s Strategy to Secure Rare Earths
Trump views rare earths as vital for national security and aims to secure a stable supply chain through a mineral agreement with Ukraine. However, his demand for half of Ukraine’s rare earth reserves has been criticized as excessive.
Trump’s focus on Ukraine can be attributed to several factors:
- Securing Rare Earth Processing Facilities: Ukraine has ample land and abandoned industrial sites suitable for rare earth processing. This would allow the US to process rare earths from Western sources outside of China.
- Countering China: Securing Ukraine’s rare earth resources would help diversify the supply chain and reduce reliance on China.
- Checking Russia: Strengthening US influence in Ukraine would serve as a check on Russian expansion and promote stability in Eastern Europe.
The Future of Rare Earths
Rare earth elements are pivotal for 21st-century advanced industries, and competition for these resources will intensify.
The US-China rivalry for rare earth dominance will significantly impact global geopolitics.
1. Diversification of the Rare Earth Supply Chain
The US and other Western nations will aggressively pursue diversification of their rare earth supply chains. They will seek partnerships with countries like Australia, Canada, and Vietnam, which have potential rare earth reserves, and invest in rare earth recycling technologies.
2. Increased Price Volatility
As rare earths become more strategically important, their price volatility is likely to increase. Escalating tensions between the US and China could lead to export restrictions, causing significant price spikes.
3. Intensified Environmental Concerns
The environmental impact of rare earth mining and processing will become more severe. Extraction processes can lead to soil and water contamination, as well as radioactive waste, posing risks to local communities and ecosystems.
Implications
Rare earth elements are crucial for the future of advanced technology, and the competition to secure these resources will continue to escalate. The US aims to diversify its supply chain and counter China’s dominance through cooperation with Ukraine. However, addressing the environmental challenges associated with rare earth extraction and establishing a sustainable supply chain remains a critical global task.
