It was Beijing’s decision almost 30 years ago to make rare earths a strategic material, and ban foreigners from mining them, that helped pave the way for China to elbow aside the U.S. as the world’s leading producer.
In the intervening period, as China tightened control of domestic output of rare earths — a broad group of 17 elements used in everything from electric vehicles to military hardware — the U.S. all but surrendered to China’s dominance of the sector.
With China now accounting for 70 percent of global production, and only one U.S. mine in operation, American industries outside of defense have “no immediate avenues” to break their reliance on China for supply of rare earth elements, according to Citigroup Inc.
It’s why Washington is now facing a new front in its burgeoning trade war with the world’s second biggest economy, after Beijing signaled its intent to restrict exports of the critical materials. Here’s a look at the country’s reserves, export regime, dominant players and illegal activities.
1. Six Dominant Producers
China consolidated its mining and separation companies into six licensed groups in 2016. Beijing granted the groups annual production quotas to better manage its strategic mineral resources and ensure the sustainability of the industry.
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