Firmly in control The world remains dependent on China for raw materials

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When it comes to rare earths, a recent study now shows that efforts to free ourselves from dependence on China could be in vain...

US President Donald Trump would like to mine rare earths (such as scandium, lanthanum, cerium and neodymium) in Ukraine or Greenland in order to break China's dominance. Rare earths are essential for electric car batteries, wind turbines, artificial intelligence and modern weapons systems. However, according to experts from the German Mineral Resources Agency (Dera), this dependency will remain for a long time to come. The explanation for this view can be found above all in the current low world market prices for these critical raw materials. And all companies that are currently mining or processing rare earths are reporting economic problems. However, this also applies to Chinese players. According to the Dera experts, this makes it more difficult to develop new deposits in other countries. In addition, the necessary infrastructure for mining and processing the materials is often lacking outside of China. And China has the most technical know-how for mining.

Trump is deliberately targeting deposits in Greenland

According to the study, China accounted for around 60% of global rare earth production in 2023, while the share of processing was as high as 93%. Germany imported a total of 5,200 tons of the raw material in 2023, 71% of which came directly from China. In Germany, 90 percent of rare earths were used in catalytic converters that clean exhaust gases in cars, chemical plants and refineries. Although demand for rare earths is likely to increase significantly in the future, there is still little evidence of this on the market, the report continues. Accordingly, new projects outside China are struggling when it comes to profitability.

Heavy rare earths are even more critical

Experts see this as particularly critical in the case of so-called heavy rare earths (such as yttrium, holmium, thullium and terbium), which are not only used in car manufacturing, but also in the US arms industry. This particular variant still comes 100 percent from China and is mined or at least refined there. According to experts, this is probably one reason for Trump's interest in Greenland. The island has the world's largest deposits of heavy rare earths. However, they have not yet been mined. A Chinese-backed rare earth project in Greenland came to a standstill after the local government banned the extraction of uranium in 2021 due to fears of environmental damage.

Australia is also rich in rare earths

Several companies have simultaneously announced their intention to extract heavy rare earths from Australian ores - either directly in Australia or in Malaysia or even the USA. However, only small quantities are likely to be placed on the world market. Nevertheless, experts predict that this would significantly reduce the Western world's dependence on China for these very special raw materials.