China’s Dominance in Rare Earth Metals Sparks Global Competition
Beijing’s recent declaration that rare earth metals (REMs) in China are the property of the state has sent shockwaves through the global market. Last week, China announced that it would operate a traceability database to control the extraction, use, and export of these valuable metals starting from October 1st.
The move comes amid a growing dispute between China and the US over the influx of cheap Chinese electric vehicles flooding the market. The European Union has also joined the fray by imposing tariffs on Chinese EVs, citing unfair subsidies that harm European competitors. China has denied the claims, arguing that its industry has developed naturally.
The connection between REMs and electric vehicles is undeniable, as REMs are essential components in the manufacturing process of EVs, among many other products. With China producing over two-thirds of the global rare earth mine output in 2023, the country holds a dominant position in the REM industry.
Despite the name, rare earth metals are not actually rare, but extracting them from the earth is a complex and resource-intensive process. Countries worldwide are now scrambling to secure their own supplies of REMs, with the US and EU actively seeking alternative sources to reduce their dependence on China.
Amid concerns that China could use its REM dominance as leverage in geopolitical disputes, the global demand for these metals is expected to skyrocket in the coming years. As countries explore new avenues for acquiring REMs, African nations with untapped mining potential are emerging as potential players in the race for these valuable resources.
China’s new policies on REMs have opened up a window of opportunity for Africa to capitalize on its mining potential and attract much-needed revenue. As the competition for rare earth metals heats up, the global market is poised for a major shift with Africa potentially playing a significant role in the future supply chain of REMs.
