FINDING SOLUTIONS FOR RARE EARTH DEPENDENCE

MACRO VIEW

- SRISHTI GUPTA & ROSHAN SONI

IN 2010, the world woke up to its dependence on rare earth elements (REEs). The trigger was a geopolitical flashpoint - China allegedly halted exports to Japan during a territorial dispute.

At that time, Beijing supplied 97% of global demand. From the atomic age to the digital revolution, REEs have quietly underpinned the modern world from colour televisions and petroleum refining to today's satellites and electric vehicles.

Valued at around $5.3 billion in 2021, the global rare-earth market is projected to approach $10 billion by 2026.

A shifting monopoly

During World War II, the US and USSR relied on supplies from colonies in India, Brazil, and Africa. By the 1960s, the Mountain Pass mine in California gave the US dominance, supplying minerals vital for nuclear energy and electronics. By the 1990s, the balance shifted east. China rose to dominance along with resource abundance and an industrial strategy built on subsidies, technological advances (Xu Guangxian's Cascade Theory), and tolerance of environmental costs. Mines like Bayan Obo in Inner Mongolia became synonymous with global supply. The 2010 export crisis proved that REE are not just commodities - they are instruments of power.

A glimpse of global output

China dominates REE production supply 69% of global output with 49% of reserves. The United States, with just 1.6% of reserves, contributes about 12%. India, though holding 8% of global reserves, the fifth largest, produces less than 1%, reflecting its untapped potential.