China’s new rare earth export restrictions threaten global supply chains, raising prices and disrupting industries reliant on these critical metals. Dominating 90% of refining capacity, China cites national security. Other nations are racing to diversify sources and improve recycling, but matching China's expertise remains a major challenge for global stability.
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Picture Courtesy: INDIAN EXPRESS
China's new restrictions on rare earth exports may disrupt global supply chains.
Rare earths are 17 special metals that are essential for making things like smartphones, electric cars, wind turbines, and even weapons. These metals are not actually "rare" in nature, but it is hard to find places where they are concentrated enough to mine easily. China is good at refining these metals, which means they process them into a form that can be used in products.
Even though these metals help make "clean energy" technologies like wind turbines and electric cars, mining them causes a lot of environmental damage, like polluting water and air. For example, harmful chemicals like arsenic and cadmium are released during processing.
China controls about 90% of the world’s rare earth refining capacity, meaning even if other countries mine rare earths, they often send them to China for processing. China has used them as a tool in international disputes. For example, in 2010, China stopped exporting rare earths to Japan during a disagreement over fishing rights.
Recently, China announced new export restrictions on seven rare earth metals, saying it is for national security reasons. This could affect industries worldwide because many countries rely heavily on China for these materials.
China dominates the rare earth market, therefore its restrictions will likely cause prices to rise quickly. For example, Benchmark Minerals, a research firm, said that dysprosium, a metal used in magnets for wind turbines and jets, could go from $230 per kilogram to $300.
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Other countries are trying to reduce their dependence on China by finding new sources of rare earths, recycling them, or developing alternatives. For example, after the 2010 dispute with China, Japan worked to develop mines in Australia and stockpile rare earths. As a result, Japan reduced its reliance on China from 90% to 60%. However, it is still very hard for other countries to catch up because China has decades of experience and expertise in mining and refining rare earths. |
The future depends on how quickly other countries can develop their own rare earth industries. If they succeed, China’s control over the market will weaken. But if they don’t, China will continue to dominate, and the world will remain vulnerable to its decisions.
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PRACTICE QUESTION Q. What are the economic implications of China's dominance in the global rare earth mineral supply chain? How can India counter this monopoly? 150 words |
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