How China Took Over the World's Strategic Rare Earths Industry

China shook the world in 2010 when it imposed an embargo on exports of crucial rare earth metals to Japan.

- Keith Bradsher

BEIJING -

Panicked Japanese executives appeared on television to warn that they were running out of the critical raw materials.

The embargo, prompted by a territorial dispute, lasted only seven weeks.

But it changed the global supply chain for these metals.

When the embargo was over, China took forceful control of its mineral bounty.

Top officials in Beijing rooted out corruption, crushed smugglers and consolidated the industry under state control.

The world was put on notice, especially Japan and the United States, two of China's biggest customers for rare earth metals used in everything from cars to smartphones to missiles.

Governments from both countries drafted detailed plans for how to mitigate their dependence on China.

Japan has largely followed through on its plans and today can source the minerals from Australia.

Not the US. Even after 15 years, the country is still almost entirely reliant on China for the processing of rare earth metals.

As a result, American auto makers, aerospace companies and defense contractors have been left vulnerable.

Angry about President Donald Trump's tariffs, China has suspended all exports of certain rare earths, as well as the even more valuable magnets made from them.

These small yet powerful magnets — no bigger than a ring for a person's finger, yet with 15 times the force of a conventional iron magnet — are an inexpensive and often overlooked component of electric motors.

They are used in electric and petroleum-powered cars as well as robots, drones, offshore wind turbines, missiles, fighter jets and many other products.

The American failure to devise an alternative to its dependence on Chinese supplies has spanned Democratic and Republican administrations.