You can fix rare earths for the price of one White House ballroom

GIVEN the ability of the words “rare earths” to bring the leadership of the world’s largest economy to its knees, it is tempting to think that establishing a supply chain to produce the minerals outside China is a challenge on the scale of putting a man on the moon.

In fact, that is a vast overestimate. The amount of government spending needed to bullet-proof most of the world’s supplies of the elements – essential for high-strength magnets used in military aircraft and munitions, as well as electric cars and wind turbines – is tiny. It is probably on the order of a single White House ballroom (US$200 million), or six hours of spending on AI data centres by Silicon Valley’s hyperscalers (US$350 million). By some measures, governments might even turn a profit on the transaction.

What has been missing until very recently is sustained attention and follow-through from officials in Europe and the US. Beijing’s latest export controls appear to have changed that for good. In thinking that rare earths were a geopolitical weapon equal to developed democracies’ hold over the semiconductor supply chain, China has vastly overplayed its hand.