"As far as I know, China is seriously considering restricting exports of rare earths to the US." So writes on Twitter Hu Xijin, authoritative journalist and director of Global Times, Beijing's English-language newspaper. His words shed light on a passage that could be decisive in the trade dispute between the United States and China.
In response to measures launched by Washington against Huawei (not surprisingly then postponed for three months), Beijing has ambiguously threatened an embargo, or at least a sharp reduction in exports of rare earths. A move potentially capable of bringing some key sectors of American industry to their knees. But what are rare earths? And why are they so important?
WHAT ARE RARE EARTHS?
In essence, these are 17 chemical elements from the periodic table. Their romantic name is linked to the minerals from which they were first isolated, which were uncommon oxides found in a Swedish mine. Actually, later it turned out that these items are rare in name but not in fact: with the exception of promethium, which is radioactive, they are found in relatively high concentrations in the earth's crust.
WHAT ARE THEY FOR?
We come to the central point: what are they for? Rare earths are used in various ways not only by the hi-tech industry, but also by the defense industry. They are crucial for producing smartphones, computers, hybrid vehicle components, microchips, CDs and DVDs, credit cards, superconductors, magnets, laser optical fibers and color screens.
WHY ARE THEY PRECIOUS?
We have said that rare earths are rather common elements, yet the mineral deposits that are exploited are few. The extractions take place above all in China because the operation involves activities with a strong environmental impact and this in the past has led several countries - including the United States - to give up. For example, the Mountain Pass mine in California reopened last year, but the concentrates are being shipped to China for processing. And when they return to the US they are ballasted with a 25% duty.
WHAT IS CHINA'S ROLE?
According to the US Geological Survey (USGS), 71% of global rare earth production and 80% of US supplies are concentrated in China. To reduce its dependence on the Dragon, the US is looking for alternatives: for example the Australian mining company Lynas, which is one of the few non-Chinese suppliers of rare earths and has recently signed an agreement with the American Blue Line Corporation to build a plant processing in Texas.
THE IMPORTANCE OF RARE EARTHS IN THE TAX WAR
However, the diversification of sources remains a mirage for Washington, which risks having to give in to the commercial tug of war with Beijing precisely so as not to do without these 17 precious elements. A spokesman for the National Development and Reform Commission, the Asian giant's top planning body, told the official Xinhua news agency that "the Chinese people would not be happy if a country wanted to use products made from Chinese rare earths to curb China's development. Among the many cross-threats launched in recent months between the two sides of the Pacific, this one could be decisive.
