Rare Earths and Clean Energy: Analyzing China's Upper Hand

But decades of underinvestment in the mining and separation of these elements across the globe has left the industry ill-prepared to meet this growing demand. Over the years, only China has recognized the strategic significance of these resources and has succeeded in gaining a near monopoly on production, currently churning out 97% of the world’s rare earth oxides. Faced with problems of its own, and eager to use its resource advantage to master higher levels of value-added production of rare earth-dependent products, China has increasingly limited the rest of the world’s access to these raw materials. This only complicates what was already projected to be a problematic resource shortage.

This issue demands a higher quality of public debate. Rare earth consuming countries outside of China have only recently become aware of their dependence and started to take stock of the risks. Time is of the essence.

Bringing new supplies online to meet growing demand is a long, complicated and risky process but is nevertheless necessary to ensure the development of high tech industries, notably clean energy. Accessible reserves of rare earths do exist outside of China and mitigating the effects of the looming shortage requires opening up these reserves to production. Yet, as the Chinese experience attests, there are substantial risks to the environment associated with mining and separating rare earths. Care must be taken to ensure responsible mining practices across the globe. Longer-term solutions, such as recycling programs, increased efficiency in resource use and the development of alternatives to rare earths are important endeavors and should be pursued, but they should not be substitutes for developing rare earth supplies outside of China today.