The failed crusade to keep a rare-earths mine out of China’s hands

A Western firm’s failure to build a China-free rare-earths supply shows Beijing's dominance of critical minerals

- Jon Emont

Workers transport soil containing rare earth elements for export at a port in Lianyungang, Jiangsu province, China.

(REUTERS)

For years, a mining project in Africa held the promise of helping free the West from its dependence on China for rare earths. Some weeks back, it fell into Chinese hands.

The failure of Peak Rare Earths, an Australian mining company, to build a China-free supply of rare-earth minerals offers a look at how Beijing came to dominate the global supply of critical minerals—a position it is now deftly leveraging for geopolitical gain. China has choked off the supply of rare earths to wring key concessions from President Trump in his trade war.

The sale of Peak to a Chinese rare-earth behemoth earlier this autumn is part of a pattern that means that, by 2029, Beijing will receive all the rare earths flowing from Tanzania, one of the world’s major emerging sources of the elements, according to Benchmark Mineral Intelligence. Some liken it to the grip China enjoys today over cobalt production in the Democratic Republic of Congo.

“This is a very strategic loss,” said Gracelin Baskaran, a critical-minerals expert at the Center for Strategic and International Studies. “This increases [Chinese] market power and it increases their market capacity to destabilize an already very fragile market.”

Since China began restricting the supply of rare-earth minerals to the world earlier this year, Western countries have searched for critical-mineral deposits to quickly bring into production—only to find that Chinese companies have already bought up many of the most promising deposits of rare earths, lithium, nickel and others.

In 2010, Australian company Peak had discovered one of the world’s best rare-earth deposits in Tanzania. Instead of shipping the ore to China, it planned to refine it in the U.K., developing an integrated operation outside of Asia.