You can fix rare earths for one White House ballroom

China’s dominance of the sector gives it a technological edge, but one that is not hard to erase.

- David Fickling

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

In fact, that’s a vast overestimate. The amount of government spending needed to bulletproof 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’s probably on the order of a single White House ballroom — US$200 million (S$257 million) - or six hours of spending on artificial intelligence data centres by Silicon Valley’s hyperscalers (US$350 million). By some measures, governments might even turn a profit on the transaction.

What’s 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.

That's because minerals processing is not rocket science. Nor is it the 3-nanometer chip design enabled by extreme ultraviolet lithography machines — a true moonshot innovation that’s involved decades, and tens of billions of dollars, of research and development (the machines themselves change hands for US$400 million apiece).