There’s been a new turn of events in the global struggle between the U.S. and China this month, as Beijing announced export rules on rare-earth elements considered critical minerals: They’re essential in producing advanced technologies such as electric vehicles, wind turbines, and military equipment, including missiles, submarine sonar, and fighter jets—as well as consumer technologies, including every cell phone and semiconductor chip in the world.

While China dominates the production of important critical minerals globally, the U.S. and its allies have been working to create their own supply chains. Beijing’s new export controls, meanwhile, require Chinese companies to report to the government details of every export transaction involving rare-earth metals. The new rules come just four months after China altogether banned exports of the germanium and gallium needed for semiconductor chips and solar panels. Why all this tension around these minerals?

Nicholas Kumleben is the energy director at the consulting firm Greenmantle, where he leads research on energy, commodities, and climate change. According to Kumleben, both the U.S. and China see critical minerals as strategically important—and only becoming more so over time. Yet they’re also unusual among key economic sectors where the two countries are competing: Washington has greater power in industries like energy and semiconductor chips, but China dominates a lot of markets for the minerals that go into them. So China uses its leverage in these markets to retaliate against U.S. moves to damage the Chinese economy—as they did after the U.S. administration’s ban last fall on exports of the most advanced semiconductor chips to China.

Meanwhile, the United States is having some success building a critical-minerals supply chain outside China’s reach. But, as Kumleben sees it, it’s still very unclear whether the U.S. or any alliance of Western countries will be able to compete with China in global mineral markets—on account of all the advantages China has with its low labor costs and light regulation.

Michael Bluhm: How much control does China have over critical minerals in the world?

Bryan Robinson

Nicholas Kumleben: It depends on the minerals. China has a lot of control over rare-earth metals and some very specialized metals. Mostly, these are used as components in electronics; but they’re also used in electric vehicles—EVs—and energy technologies developed for the transition away from fossil fuels and toward renewables.

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