Rare earth minerals: Why they're a flashpoint in US-China tensions

"Rare earth" elements have become a hot-button global issue.

Rare earths are a group of 17 elements comprising the 15 lanthanides plus scandium and yttrium, and are considered "critical" minerals used in machinery, EVs and fighters.

They are used in high-tech, clean energy, automotive, medical, defence and industrial applications.

China takes the lion's share of global REE production, or 87% of global refining capacity.

Beijing has recently curbed rare earth products exports, a move that has incensed the Trump government. On October 10, Washington announced a "massive increase," i.e. 100% tariff on Chinese goods, in retaliation, with effect from November 1, 2025.

The US itself has huge REE deposits. Why is America a laggard, dependent on China for its supplies of this critical element?

Let's dive into this issue:

It’s a bit of a misnomer: Despite their name, they are relatively abundant in the Earth's crust – but rarely found in concentrated forms suitable for mining. 

These elements possess unique magnetic, luminescent, and catalytic properties that make them indispensable in modern technology.

They are used extensively in electronics (such as smartphones, computers, and TVs), clean energy technologies (including wind turbines, electric vehicles, and fuel cells), industrial catalysts, magnets, optical glass, and medical devices. 

They are also used extensively in military and defence applications.

The production of permanent magnets accounts for the largest global use, vital for products like motors, generators, and hard drives. 

REEs also facilitate miniaturisation, efficiency, and durability in various applications, according to the Government of Canada.

Globally, China is the dominant producer of rare earths, accounting for about 70% of mined production and 87% of refined production in 2023, with estimated mined output around 240,000 tonnes. 

Other countries like Canada hold large reserves but face challenges due to the complexity of separating and refining these elements.

Top rare earth deposits are found in China (notably the Bayan Obo deposit). China’s dominance stems from its vast, high-grade deposits combined with extensive processing infrastructure and lower production costs.

China also developed early control over global supply chains, strengthening its position as the top producer and exporter.

Yes, the United States does have rare earth deposits. As mentioned above, REEs are also found in Australia, Canada, Russia, Brazil, Greenland, Vietnam and India.

The Philippines, too, has significant potential for REEs, too, with identified deposits in areas like Palawan, Nueva Vizcaya, Zambales, Samar, and coastal regions, according to Science Direct. 

In the US, the most significant and currently active rare earth mine is the Mountain Pass Rare Earth Mine and Processing Facility in California, operated by MP Materials. 

This open-pit mine, located near the Clark Mountain Range, is the largest known rare earth deposit in the US and one of the largest globally. It produced about 15.8% of the world’s rare earth supply as of 2020.

The Mountain Pass deposit contains rare earth oxides mostly in the mineral bastnäsite, including elements like cerium, lanthanum, neodymium, and europium. 

The ore body is substantial, with proven reserves estimated at around 1.36 million tonnes of rare earth oxides, with an average grade of about 7%. 

Other US rare earth deposits exist. These include a large but not fully developed deposit at Halleck Creek, Wyoming, which has substantial estimated reserves though the extractable amount is smaller than initially reported. 

There are also exploratory projects in Arizona and other states, reflecting ongoing efforts to expand domestic rare earth mining and processing capabilities to reduce dependence on foreign sources, notably China, according to Global Affairs. 

The US does depend on China for rare earth minerals despite having its own deposits.

One major reason is that US domestic REE production and processing capacity remains limited – and relatively small – compared to China’s vast and integrated supply chain. This are moving in the US, as per industry group USA Rare Earth, hough not as fast as desired.

Key reasons:

US and global dependence on China persists because, while rare earth mining exists in the US and various other countries, the scale of production, refining, and manufacturing capacity is insufficient to meet demand. 

This “ecosystem” in the US takes long to develop. While the US is actively investing to close this gap, it remains reliant on Chinese supplies in the near term, as per CSIS.

China's dominance is due to a combination of abundant resources, established infrastructure, and cost advantages. 

The US has significant rare earth deposits, and the US government supports expanding domestic rare earth production to secure supply chains, but it takes at least 29 years to get a US mining permit.

With global production currently dominated by China, REEs have become a hot-button geopolitical issue. In the US, access to these minerals is hampered by long local permitting process (29 years for one mining permit) and strict environmental rules.

This provides a disincentive to potential investors in the industry, and a cycle of dependence on imports.