China has declared that the nation’s rare earths belong to the state, sparking concerns amidst the global arms race for control over these metallic minerals crucial for the green energy transition. A new regulation set to take effect in October mandates that “no organisation or individual may encroach upon or destroy rare-earth resources”, with the goal of ensuring national resource security and industrial security.
According to experts, this move by China is a strategic effort to safeguard their trove of industrially important metals, including magnet-making materials essential for technologies like electric vehicles (EVs), lasers, and missiles. The regulation comes in response to efforts by the West to limit Chinese access to advanced chip technology, intensifying the ongoing trade war between Beijing and Western nations.
China currently produces 60% of the world’s rare-earth metals and refines nearly 90% of rare earth globally, giving them a dominant position in the market. However, concerns have been raised about overreliance on Chinese suppliers, prompting initiatives in the EU and other regions to diversify supply chains and reduce dependency on China.
Last month, a Norwegian mining firm announced the discovery of Europe’s largest proven deposit of rare-earth elements, providing a potential alternative to China’s dominance in the industry. This development comes at a time of strained trade relations between the West and China, with geopolitical tensions influencing policies and trade decisions.
As the competition for rare earths and technology supremacy continues to escalate, the global supply chain for key minerals and components like semiconductor chips remains at risk. The battle for control over these resources underscores the broader economic and geopolitical challenges facing major world powers in the transition towards green energy.
