Vichaara written by: Adithya Aithal and Anjan Babu.S. 

Vichaara edited by: Sanjana Sudarshan 

Source: China’s weaponisation of rare earths threatens a crisis (MC) 

Author of source article: Vivek Y Kelkar 
 

What are rare earth elements? 

Rare Earth Elements (REE) are a set of seventeen metallic elements and are integral to many high-tech devices. REEs are necessary components of more than 200 products, including mobile phones, computer hard drives, and electric vehicles. 

China accounts for more than 80% of the world’s refining of REEs, with certain key REEs being a virtual monopoly for China. 

While the occurrence of REEs in nature is not truly rare, their solvent extraction process is technologically complex. Over the years, China has developed a stranglehold on this technology and maintains its dominant position in the ongoing and arduous chip wars. 

In the article, Kelkar writes that: 

  1. "(China has) banned the export of some critical technology to extract and refine rare earth elements, a tit-for-tat move against the US and the EU which have slowly but surely begun to clamp down on some of the most advanced technologies like semiconductors." 
  2. "The new ban includes not just the export of production technology for rare earths and their alloy metals, but it also includes the technology to produce rare earth magnets, which turn electric power into motion and are far more efficient, given their distinctive chemical properties, than their traditional counterparts." 
  3. "According to the International Energy Agency (IEA), China controls nearly 90 percent of the global refining of rare earths, and more than 60 percent of global supply, rendering global supply chains highly vulnerable. The country is also the sole large-scale producer of heavy rare earth ores." 
  4. "The technology is not easy to either replicate or master. A Reuters report in August highlighted the complexities of the solvent extraction process to refine critical minerals, and the struggle faced by companies in the US and the EU to master the technologies." …New technologies are sought but the development process could take a good few years."  
  5. "The IEA estimates that the globe will require nearly six times more critical minerals by 2040 than it does today, if Net Zero goals are to be met."  

Agraga's Take 

Computer chips made from rare earth metals have become an indispensable part of everyday life.  

The ongoing 'Chip War' for complete dominance over chip manufacturing between the West and China is escalating. India's diplomatic and policy machinery must proactively ensure that there is no supply chain disruption amidst the 'Chip War'.  We can look at playing a key role in building collaboration and de-escalate the chip wars. 

A large-scale disruption in the chip supply would hinder the digitisation and availability of mobile phones and laptops at affordable prices, throwing a spanner in the works for India's economic development.