What Are Rare Earths and Why They Matter
Rare earth elements (REEs) are a group of 17 chemical elements that include the 15 lanthanides plus scandium and yttrium. Despite their name, they are not truly rare — they are relatively abundant in the Earth’s crust — but they are rarely found in economically exploitable concentrations.
These elements are essential for modern technology. Electric motors, smartphones, wind turbines, advanced batteries, semiconductors, precision missiles, and satellites all rely on rare earth materials.
Thus, control over these resources has become one of the core sources of economic and geopolitical power in the 21st century.
1. Rare Earths and Their Role in the Global Economy
1.1. Technological Applications
Rare earths are key components in a wide range of high-tech products:
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Neodymium (Nd) and Dysprosium (Dy): used in high-performance permanent magnets for electric vehicles, wind turbines, and generators.
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Lanthanum (La): used in nickel-metal hydride batteries, optical lenses, and catalytic converters.
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Yttrium (Y) and Europium (Eu): crucial for LED displays and plasma screens.
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Cerium (Ce): used for glass polishing and automotive catalysts.
Every smartphone contains between 8 and 10 rare earth elements, while a single electric car requires up to 5 kilograms of them.
A 3 MW wind turbine may need 600 kilograms of neodymium and dysprosium magnets — demonstrating how essential they are for green energy technologies.
1.2. A Pillar of the Green Transition
With the global push toward clean energy and decarbonization, rare earths have become critical materials.
The United Nations, the International Energy Agency (IEA), and the European Commission classify them as “critical raw materials” for achieving carbon neutrality.
The expansion of electric mobility, renewable energy, and digital infrastructure will dramatically increase demand.
According to the IEA, the consumption of key rare earths such as neodymium and dysprosium could triple by 2030.
2. The Geography of Power: Who Controls Rare Earths
2.1. China’s Global Monopoly
Today, China dominates the rare earth industry at every stage — from mining to refining to component manufacturing.
According to the U.S. Geological Survey (2024):
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China produces around 60–65% of the world’s rare earths,
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Refines more than 85% of global output,
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And holds about 38% of known reserves.
This dominance is no coincidence. Since the 1980s, Beijing has pursued a coordinated industrial strategy to build a vertically integrated supply chain.
In 2010, during a maritime dispute with Japan, China temporarily restricted rare earth exports, sending shockwaves through global markets. Prices surged overnight, and the world realized its strategic dependence on Beijing.
Since then, the U.S., the EU, and Japan have made it a priority to diversify supply chains and reduce vulnerability.
2.2. Emerging Players
Other nations are racing to secure a share of the market:
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United States: The Mountain Pass mine in California, once dormant, has been reactivated. Yet, most refining still occurs in China.
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Australia: Lynas Corporation is the largest non-Chinese producer, steadily expanding its capacity.
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Vietnam, Brazil, India, and Russia: Hold significant reserves but face technological and infrastructure challenges.
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Africa: New discoveries in Malawi, Tanzania, and Madagascar may turn the continent into a future strategic hub.
3. Refining: The Real Bottleneck of the Rare Earth Supply Chain
Extracting rare earths is only the first step — refining and separation are the most difficult parts.
These processes involve complex chemistry, high costs, and severe environmental impacts due to the use of acids and radioactive waste.
China’s investment in refining technology has given it a decisive edge. Even when the U.S. or Australia mine rare earths, they often ship the material to China for processing.
Western nations are now trying to rebuild domestic capabilities. The European Critical Raw Materials Act and the U.S. Inflation Reduction Act both include funding for new refining facilities and recycling research — but catching up will take time.
4. Geopolitical Impact: Rare Earths as a Strategic Weapon
4.1. The New Resource Wars
In the 20th century, oil shaped the world order. In the 21st century, rare earths are playing the same role.
Whoever controls these materials controls the foundation of modern technology and defense — from advanced missiles to smartphones.
China’s near-monopoly grants it tremendous geopolitical leverage. Analysts now speak of the “weaponization of rare earths”, meaning the ability to use export restrictions as a political tool — just as OPEC once did with oil.
4.2. The Western Response
The United States and its allies have reacted with new resource security strategies:
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In 2022, the U.S. added rare earths to the Defense Production Act, identifying them as critical for national security.
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The European Union launched the Critical Raw Materials Act (2024) to diversify imports, promote recycling, and support local mining projects.
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The Australia–Japan–U.S. alliance is developing a Rare Earths Supply Chain Partnership to reduce dependence on China.
The overarching goal is clear: build a resilient, transparent, and sustainable supply chain for the future.
5. Environmental and Social Implications
The rare earth industry carries a heavy ecological footprint.
Refining processes generate large amounts of toxic and sometimes radioactive waste, polluting soil and water.
In Inner Mongolia, especially around the city of Baotou, vast “toxic lakes” have formed — symbols of the dark side of the green revolution.
Western countries now face a dilemma: rebuild domestic supply chains without reproducing the same environmental damage.
This has fueled interest in:
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Recycling rare earths from discarded electronics, magnets, and batteries.
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Developing sustainable extraction methods, such as bioleaching and solvent-free separation.
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Creating international environmental standards to avoid ecological dumping.
6. The Future of Rare Earths: Between Green Growth and Global Tensions
6.1. Exploding Demand
According to the World Bank and the IEA, global demand for rare earths may quadruple by 2040.
Electric vehicles, renewable power, defense systems, and artificial intelligence all depend on these minerals.
Ironically, the transition away from fossil fuels has created a new form of resource dependency — one that shifts power from oil producers to mineral-rich nations.
6.2. New Alliances and Competition
New mineral alliances are reshaping global geopolitics:
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The Quad Alliance (U.S., Japan, India, Australia) cooperates on supply chain security.
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Africa is becoming a strategic arena of competition among China, Russia, and Western powers.
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Latin America — particularly Brazil and Bolivia — is emerging as a partner for rare earths and lithium.
The race for rare earths is thus not just economic — it is a battle for technological supremacy and energy sovereignty.
7. Conclusion: Rare Earths as the Key to the New World Order
Rare earth elements have become the strategic foundation of the 21st-century global economy.
In the 20th century, nations fought over oil; today, they compete for the materials that power the digital and green revolutions.
Their true value lies not only in money but in technological autonomy, industrial security, and geopolitical influence.
The West faces two intertwined challenges:
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Reduce dependence on China without derailing the clean energy transition.
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Build sustainable and circular supply chains that balance innovation with environmental responsibility.
In a world where economic warfare replaces military confrontation, rare earths have become the silent weapon of global power — invisible to the eye, but vital to the future of nations.