Trump-Xi sign rare earths deal: What is it and why is it so important?

Rare earths refer to a group of 17 elements, the 15 lanthanides, plus scandium and yttrium, most of which are silvery-white metals.

Rare earths refer to a group of 17 elements, the 15 lanthanides, plus scandium and yttrium, most of which are silvery-white metals.

These elements, or the magnets made from them, are essential components in a wide range of modern technologies. They are found in small but crucial amounts in smartphones, household appliances, electric vehicles (EVs), medical devices, and advanced military hardware such as missiles, radar systems, and the F-35 fighter jet.

Because of their role in manufacturing, disruptions in supply can severely impact industries. Earlier this year, several automakers were forced to halt production after Chinese export restrictions led to shortages.

Despite their name, rare earths are not scarce in nature, reported Reuters, some are even more abundant than lead. However, they are typically found in low concentrations and mixed with other minerals, making extraction and separation expensive and complex.

Although US scientists pioneered refining techniques for rare earths in the 1950s, China has dominated the global market since the 1980s, aided by lower costs, relaxed environmental rules, and consistent government support.

China currently accounts for roughly 60% of the world’s mine output and over 90 per cent of the refined production and magnet manufacturing.

Efforts are underway in the US, Europe, and Australia to develop alternative supply chains. But experts believe it will take years before they can meaningfully reduce global dependence on China. In the meantime, Beijing has been tightening export controls on certain rare earths and the technology used to process them.

The 17 rare earth elements are: scandium, yttrium, lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium.

Processing rare earths often involves toxic chemicals that can contaminate soil, air, and water. Some ores also contain radioactive elements such as thorium and uranium, which must be removed using acids, posing additional health and safety challenges.

Although cleaner extraction technologies are being explored, they remain costly and are not yet widely adopted, creating a tension between meeting demand and minimising environmental harm.

(With inputs from Reuters)

Donald Trump and Xi Jinping have signed a deal to keep the flow of rare earth minerals to the US unhindered. However, details of the agreement are unclear. Trump, however, hinted that the US is looking at an extension of the deal. The deal will essentially stabilise prices of rare earths and related products stable for the time being. However, till the details of the agreement are out, the global impact can only be guessed.