Are Rare Earth Elements at Core of Trade War with China?

Something that is termed rare in relation to earth seems by its very definition to be of import. According to the Rare Earth Technology Alliance, there are 17 elements that are considered to be rare earth elements—15 elements in the lanthanide series and two additional elements that share similar chemical properties.

This is right about when I started nodding off in chemistry class. The salivating Pavlovian response to the pulling down of the periodical charts. Those that understand these elements know that they are critical in many modern technologies, including consumer electronics, computers and networks, communications, clean energy, advanced transportation, health care, environmental mitigation, and national defense.

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Chinese President Xi Jinping is acutely aware of this, as he perhaps symbolically paid a visit to one of China’s rare earth producing provinces this week. Anthony Marchese, chairman of Texas Mineral Resources Corp, which hopes to produce rare earth elements near El Paso, remarked, “To the people who follow the industry, to the Trump administration, they see the symbolism.” The tension between Washington and Beijing is certainly fueled in part by who will win the economic growth race, and as noted above, national defense is a key industry that relies on rare earth minerals. These trade issues go much deeper than headline news. This is literally and figuratively drilling to the core of the trade issue. Xi and Trump both understand this.

Last year, the U.S. Geological Survey designated 35 minerals as critical to the economy and national defense. The U.S. is almost entirely reliant on imports for more than half of them. In some ways it’s like the national debt, in that it is a problem, but one that doesn’t boil over enough to make it a real political or economic battle point. Interestingly enough, precedent has been set by former Chairman Deng Xiaoping in 1992, when he compared China’s role in the rare earth sector with the Middle East’s production of oil.

If you have ever wondered why pollution in China is so bad, you can trace it back to the production of rare elements. While perhaps draconian in measure, China took the lead in the world stage, as it had little concern for the environment. The production process is so brutal to the landscape that one can’t imagine it taking place in that scale in the U.S. With our values placed on nesting Sea Turtles and manatee’s, we stand zero chance entering this game.

Currently in the works, there is a proposal by Blue Line Corp. and Lynas Corp to build a plant in Hondo, Texas, near where Blue Line is based. There are no separation plants in the U.S. for either heavy or light rare earth materials after Molycorp Inc. sought chapter 11 bankruptcy protection in 2015. The dependence on China for rare earth minerals is troubling. It is highlighted now only because of trade wars, and will almost certainly sink back into the woodwork when issues resolve themselves. Consequently, like social security and the national debt, there are no solutions on the table.

About John Thomas

John Patrick Thomas is a four-time cancer survivor who lives with his family in South Florida. John attended Gettysburg College and The American University before embarking on an entrepreneurial career on Wall Street. He turned to the teaching profession after his life-threatening bout with bone cancer. John has recently written a #1 Amazon Cancer Bestselling book entitled, “A Call to Faith, the Journey of a Cancer Survivor.” He has appeared in publications such as The New York Times, The Wall St. Journal, The Washington Post, Memorial Sloan-Kettering Cancer Center publications, and was featured in new DayStar network series, “Impact with Pastor Dave.” He has traveled as a missionary and may be one of the few people that tell you cancer was the best thing to ever happen to him. You’ll have to ask him why.


  1. “The dependence on China for rare earth minerals is troubling. It is highlighted now only because of trade wars, and will almost certainly sink back into the woodwork when issues resolve themselves.”

    I would beg to disagree with this opinion. IMHO the US no longer looks at REE (or other critical metals) as a trade issue, but rather as a strategic military need. I do not believe that in this present Trump era that the US will allow itself to continue its reliance for such materials/related products on the Chinese. As you indicate we already have a move by Lynas/Blue Line to start REE processing along with like ‘threats’ by MP Materials (old Moly’) by 2021-22 (also see US report released yesterday). These moves are unlikely to have been voiced without already knowing there was at least tacit US support for such moves. I understand your environmental concerns, but Lynas has shown it is nothing like the Chinese producers in terms of its concern for transparency when it comes to pollution avoidance, and there will be stringent requirements on any REE facilities in the US.


  2. China tried to increase their profits by raising prices, but only succeeded in losing market share as a result. Where they used to produce over 90% of the world’s REEs, now they only provide about 70%. Still a large share, but things are moving in the right direction.

  3. Linton Wildrick

    A few years ago, the Obama administration shut down potential mining on the Arizona Strip, a huge area north of the Grand Canyon, for 20 years. He yielded to his environmental supporters despite the fact that these potentials deposits are far from the actual canyon and could be safely mined, not withstanding the biased, incorrect findings of the U. S. Geologiical Survey about the mineral potential of the area (the mining industry knows otherwise). The area has high potential for REEs and uranium, all strategic minerals, but now cannot even be explored for 20 years. We hope that the President will reverse this decision to the extent possible, as he did with the Bear Creek Wilderness. The ultra-environmental movement to continues to shoot us in the collective foot by furthering our minerals-supply dependence on unfriendly countries.

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