A new cold war is brewing over rare earth minerals
1 min read
Summary
China has implemented new export controls for rare earth minerals (neodymium, dysprosium, etc.) and magnets critical to various technologies and the automotive industry.
As more than 90% of the world’s supply are produced in China and exported, new and recently-introduced permit requirements are causing stockpiles to run low, and prices to spike.
Tesla, GM, and Ford have all been impacted and warned of future business risks, and Rivian has mentioned the issue in SEC filings.
US President Trump’s escalating tariffs are compounding the problem, and coupled with a lack of refining equipment, environmental regulations, and skilled workers in the US, a solution is unclear.
geopolitically, China considers rare earths and magnets “dual use,” both for consumers and the military, and requires disclosure of the entire production chain to the Chinese government.
The US Department of Defense and Department of Commerce have repeatedly warned that rare earths are a national security problem.
Possible solutions include onshore production and refining, alternative magnet chemistries using iron nitride, and research to reduce reliance on rare earths.