Article by Keith Bradsher, courtesy of The New York Times
03.06.2025
China has suspended almost all exports since April 4 of seven kinds of rare earth metals, as well as very powerful magnets made from three of them. The halt has caused increasingly severe shortages that threaten to close many factories in the United States and Europe.
Why are these metals so needed, why has China stopped exporting them and, crucially, what happens next?
What are rare earths?
There are 17 types of metals known as rare earths, which are found near the bottom of the periodic table. Most of them are not actually very rare — they are all over the world, though seldom in large enough ore deposits to be mined efficiently.
They are called rare because it is very difficult to separate them from one another. Breaking the chemical bonds that bind them in nature can require more than 100 stages of processing and large quantities of powerful acids.
Why does China control so much of the rare earth supply?
China mines 70 percent of the world’s rare earths. Myanmar, Australia and the United States mine most of the rest. But China does the chemical processing for 90 percent of the world’s rare earths because it refines all of its own ore and also practically all of Myanmar’s and nearly half of U.S. production.
China’s dominance is greatest for seven rare earths that it has mostly stopped exporting since early April: dysprosium, gadolinium, lutetium, samarium, scandium, terbium and yttrium. These are mined almost exclusively in China and Myanmar and are among the hardest to separate chemically. For metals like dysprosium and terbium, so-called heavy rare earths that are used for heat-resistant magnets, China’s refineries produce up to 99.9 percent of the world’s supply.
China has some of the world’s best deposits of heavy rare earths. These are found in a band of ore that is particularly rich in a valley near Longnan in south-central China, extending west into northernmost Myanmar.
What does heavy rare earth mining look like?
Near Longnan, miners use dirt bikes to carry sacks of ammonium sulfate up to the crests of the low hills flanking the valley. Ammonium sulfate, a cream-colored powder, is a fertilizer when diluted with plenty of water but can be toxic in high concentrations. The miners mix concentrated batches with only a little water and dump it into simple holes dug near the tops of the hills.
The ammonium sulfate dissolves the rare earths inside the clay hills and seeps out as a slurry near their base. During a recent visit to the valley without the knowledge of local authorities, I heard a diesel generator chugging as it pumped the liquid through plastic tubes to simple pits.
Oxalic acid was added to the slurry there, causing the rare earths to form faintly pink crystals and sink to the bottom of the ponds.
The liquid is pumped out of the pits and into a bright orange, mysteriously bubbling creek. The crystals are then dried and shoveled into industrial sacks the size of washing machines and shipped on freight trucks to Longnan’s blocks-long rare earth processing factories.
Chinese organized crime syndicates with a reputation for violence ran the valley until the end of 2010, when the premier at the time, Wen Jiabao, ordered government forces to storm the valley and seize the mines.
What’s so important about the seven rare earths that China controls?
The main consumer of these seven metals is the car industry, which uses a lot of heat-resistant rare earth magnets. But these elements are also needed by manufacturers of semiconductors, medical imaging chemicals, robots, offshore wind turbines and a wide range of military hardware.
Rare earth magnets are up to 15 times as powerful as iron magnets of the same weight. They are essential for the dozens of small electric motors found in today’s cars. The motors for brakes, steering and many other systems all rely on rare earth magnets. A single luxury car seat may include 12 rare earth magnets for the motors that adjust it. Electric cars have additional rare earth magnets for the motors that turn their wheels.
China makes about 90 percent of the world’s supply of rare earth magnets.
If the supplier of parts for one of these systems runs out of magnets, an entire car assembly plant may have to shut down and thousands of people may be temporarily laid off. Last week, Ford temporarily closed its Ford Explorer sport utility vehicle factory in Chicago for a week for lack of magnets.
Most rare earth magnets are made from two light rare earth elements, neodymium and praseodymium, that China continues to export and that are also available in much smaller quantities from Australia and the United States.
But those rare earth magnets can lose much of their magnetism if they are exposed to heat or a strong electrical field. To prevent this, small amounts of the heavy rare earths dysprosium or terbium can be added during production.
Gasoline engines and many electric motors produce considerable heat, so the car industry mostly buys rare earth magnets with dysprosium or terbium included. Right now, China is selling almost none of these heat-resistant magnets.
The world’s magnet industry produces nearly 200,000 tons a year of rare earth magnets with dysprosium or terbium. Another 80,000 tons a year are made without these metals for less demanding applications, like purse clasps.
Has China halted rare earth exports before?
Yes, China halted exports of all rare earths to Japan for two months in 2010 during a territorial dispute, scaring Japanese manufacturers, which nearly ran out of supplies. Sumitomo, a Japanese trading group, and the Japanese government subsequently helped Lynas, an Australian company, build more mining capacity in Australia and processing capacity in Malaysia, so that Japan would have an alternative to China.
Many Japanese companies have kept very large stockpiles ever since, holding as much as 18 months’ supply of dysprosium in the semiconductor industry, for example. Some Japanese automakers, like Honda and Nissan, recently began paying extra to buy costlier heat-resistant rare earth magnets that do not require dysprosium, even as automakers elsewhere have been reluctant to pay for the alternative technology.
South Korea’s big electronics companies do not appear to have accumulated stockpiles. But after China signaled last December that it might restrict rare earth exports, South Korea imported large quantities of dysprosium from China in January and February, China’s customs records show.
The United States and Europe tried to set up their own rare earth metals and magnet industries after the 2010 embargo. But they face high costs for environmental compliance and must pay large salaries to attract chemical engineers. China has 39 universities with rare earths training programs while the United States has none.
Why did China suspend exports this time?
The Chinese government has said repeatedly that it suspended exports of the seven rare earths, and magnets made from them, because they are “dual-use items” with both military and civilian applications.
The most heat-resistant magnets, for applications that may be exposed to temperatures in the hundreds of degrees Celsius, use samarium, not dysprosium or terbium. Samarium, which China stopped exporting this spring, is needed for the guidance systems for intercontinental ballistic missiles. An F-35 fighter jet has about 25 pounds of rare earth magnets, mostly samarium-cobalt magnets.
Yttrium is used in lasers, including artillery range finders. Scandium can be combined with aluminum to make lightweight aircraft parts.
The other four rare earths subject to China’s new export license requirement are mostly used for civilian purposes. Military applications represent only about 5 percent of the rare earth magnet market.
The United States has contended that China’s real motivation in imposing export controls has nothing to do with military applications, but was part of China’s retaliation for the Trump administration’s decision days earlier to impose much higher tariffs on imports from China and dozens of other countries.
What happens next?
China and the United States agreed on May 12 in Geneva to reduce their tariffs on each other. China also agreed to suspend the application of non-tariff measures imposed on the United States since early April.
But China has contended that the rare earth export controls apply to all countries, not just the United States. The implication, although not clearly stated by Chinese officials, is that the export halt may not qualify as a non-tariff measure imposed on the United States.
The U.S. trade representative, Jamieson Greer, and Treasury Secretary Scott Bessent reached the deal with China in Geneva. But another agency, the Commerce Department, tightened its controls the next day on Huawei’s computer chips, barring Americans from buying or financing any of them. That has angered Chinese officials.
China’s Ministry of Commerce has also struggled to come up with a process for issuing export licenses for rare earths, which could explain some delays. A few European companies have obtained supplies, like Volkswagen, but others have not. Shipments to Europe have been interrupted, and some factories there may have to close temporarily even though China is trying to improve relations with Europe.
Detroit automakers were approved a week ago for a few shipments but are also running short on supplies.
China currently requires a separate license and elaborate paperwork for each shipment. Western businesses are urging China to approve three-month or yearlong licenses for each overseas customer to speed up the process.