GS 3 – ECONOMY
Context:
China has tightened controls over rare earth elements (REEs), consolidating its position as the largest global producer (60%+ share). New rules by China’s Ministry of Industry and Information Technology seek to:
- Centralize oversight of extraction, refining, and exports.
- Control supply chains of critical minerals essential for clean energy, defense, and tech sectors.
WHY IT MATTERS
| Dimension | Relevance |
| Strategic | REEs are crucial for missiles, semiconductors, EVs, wind turbines, solar panels, and defense |
| Geopolitical | US, India, Japan, and EU depend on China’s REEs → Risk of strategic blackmail |
| Economic | Supply chain disruptions → impacts clean energy transition + industrial manufacturing |
| Scientific | REEs are difficult and expensive to mine + process → High environmental cost |
What Are Rare Earth Elements (REEs)?
- Not rare by occurrence, but rarely found in concentrated deposits → costly to mine and refine.
- 17 elements divided into:
- Light REEs: Lanthanum, Cerium, Neodymium, Praseodymium, etc.
- Heavy REEs: Gadolinium, Dysprosium, Terbium, etc.
Key Data & Charts
- Production Dominance:
- China: ~63% of global rare earths mined
- Controls ~60% of global exports
- Chart 1: China has 48.1% of total reserves
- Export & Processing Power:
- Chart 3: China = Top global exporter (~55% in 2024)
- Chart 4: Sectors affected: Magnets, Displays, Ceramics, Optics, Aerospace
- Top Importers of China’s REEs:
- Japan (top), followed by USA and The Netherlands