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Are rare earth minerals China's trump card in its trade war with US? | Are rare earth minerals China's trump card in its trade war with US? |
(about 11 hours later) | |
China has been signalling that it may restrict the export of rare earth minerals to the United States as the trade conflict between the two countries escalates. | China has been signalling that it may restrict the export of rare earth minerals to the United States as the trade conflict between the two countries escalates. |
It is by far the largest producer of these raw materials, vital for many American industries including high-growth sectors such as electric car and wind turbine production. | It is by far the largest producer of these raw materials, vital for many American industries including high-growth sectors such as electric car and wind turbine production. |
Last year, the US Geological Survey designated these minerals critical to the economy and national defence. | Last year, the US Geological Survey designated these minerals critical to the economy and national defence. |
"China is seriously considering restricting rare earth exports to the US," tweeted the editor of Chinese state-run Global Times this week. | "China is seriously considering restricting rare earth exports to the US," tweeted the editor of Chinese state-run Global Times this week. |
What are rare earths? | |
Rare earths are a group of 17 elements used in production in a huge number of sectors, including renewable energy technology, oil refinery, electronics, and the glass industry. | |
Although called "rare", they are actually found relatively abundantly in the Earth's crust, according to the US Geological Survey. | Although called "rare", they are actually found relatively abundantly in the Earth's crust, according to the US Geological Survey. |
However, there are relatively few places in the world that mine or produce them. | However, there are relatively few places in the world that mine or produce them. |
Extraction is both difficult and potentially damaging to the environment. | Extraction is both difficult and potentially damaging to the environment. |
Chinese mines account for around 70% of global output. | Chinese mines account for around 70% of global output. |
Myanmar, Australia, and the United States plus a few other countries which mine only small amounts, account for the rest. | Myanmar, Australia, and the United States plus a few other countries which mine only small amounts, account for the rest. |
In the refining of rare earth ores, China is even more dominant. | In the refining of rare earth ores, China is even more dominant. |
Last year, almost 90% of all the processing into usable oxides was done in China. | Last year, almost 90% of all the processing into usable oxides was done in China. |
An Australian company operating in Malaysia produces almost all the rest. | An Australian company operating in Malaysia produces almost all the rest. |
Over the past five years, China's exports of rare earth oxides have almost doubled, according to official Chinese statistics. | Over the past five years, China's exports of rare earth oxides have almost doubled, according to official Chinese statistics. |
How reliant on China is the US? | How reliant on China is the US? |
Around 80% of the rare earths imported by the United States comes from China, according to US government data. | Around 80% of the rare earths imported by the United States comes from China, according to US government data. |
Estonia, France and Japan also supply processed rare earths to the US, but the original ore comes from China. | Estonia, France and Japan also supply processed rare earths to the US, but the original ore comes from China. |
The one rare earth mine operating in the United States sends its ore to China for processing - and already faces a 25% import tariff imposed by China. | The one rare earth mine operating in the United States sends its ore to China for processing - and already faces a 25% import tariff imposed by China. |
There is an option for the US to import from Malaysia, but not in the quantities required. | There is an option for the US to import from Malaysia, but not in the quantities required. |
Also, the Malaysian government has threatened to discontinue production because of environmental concerns. | Also, the Malaysian government has threatened to discontinue production because of environmental concerns. |
Could the US start its own refining industry for rare earths? | Could the US start its own refining industry for rare earths? |
It's certainly possible, but this would take time and the sources of ore could be limited if China were ruled out. | It's certainly possible, but this would take time and the sources of ore could be limited if China were ruled out. |
Until the 1980s, the US was in fact the largest producer of rare earths. | Until the 1980s, the US was in fact the largest producer of rare earths. |
China has restricted exports of rare earths before. | China has restricted exports of rare earths before. |
In 2010, they did it against Japan, over a territorial dispute. | In 2010, they did it against Japan, over a territorial dispute. |
The restriction of exports to the United States, if enforced, could have a major impact on major US industries worth trillions of dollars that rely on rare earth minerals. | The restriction of exports to the United States, if enforced, could have a major impact on major US industries worth trillions of dollars that rely on rare earth minerals. |
Read more from Reality Check | Read more from Reality Check |
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