[Text/Observer Network Chen Sijia] After US President Trump initiated a "tariff war" against China, China responded firmly by taking countermeasures such as tariffs and rare earth export controls. On April 4, the Ministry of Commerce, together with the General Administration of Customs, issued an announcement, declaring that it would implement export control over seven categories of medium and heavy rare earth-related items including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.
According to a report by The New York Times on April 17, China's countermeasures have caused tension in multiple industries in the United States. In order to find rare earth suppliers outside of China, the US government last month quietly expressed its intention to invest in expanding mines in Brazil. However, due to China's dominant position in rare earth processing, rare earth ore mined in Brazil still needs to be transported to China for processing.
The report noted that rare earths are crucial for the automotive, semiconductor, aerospace, and defense industries, but their extraction and separation are extremely difficult, making the United States and other Western countries highly dependent on China's rare earth industry. Among them, in terms of heavy rare earths with higher atomic numbers, China is almost the only country with the capability to separate and process them.
Heavy rare earths mainly come from mines in China and Myanmar, but Western countries have recently turned their attention to Brazil, where they discovered rich clay deposits containing heavy rare earths. Rare earth industry expert Constantine Karayannopoulos said, "I have studied 600 to 700 projects globally, and I believe Brazil has significant advantages in heavy rare earth mining and may become a game-changer."
Since 2010, Boston-based private equity firm Denham Capital has been investing in a mining company named Serra Verde to extract heavy rare earths from Brazil. After 14 years of effort and securing an additional $150 million investment from the United States and the UK, the mine near the town of Minaçu in Goiás State is expected to open in 2024.
Serra Verde's mining facilities in Minaçu, Brazil Serra Verde Company Website
The US government-controlled US International Development Finance Corporation quietly indicated last month that they intended to fund the expansion of the Serra Verde mine project.
However, The New York Times pointed out that the US government's investment faces an obstacle, as the mine has already signed contracts with Chinese companies to sell rare earth resources to Chinese enterprises. Thras Moraitis, CEO of Serra Verde, said, "They are the only customers who can process these products; China's decades of forward-looking planning have placed them in a strong advantageous position."
Moraitis did not disclose specific details of the contract, but he stated that at least until 2027, the majority of the company's products will be sold to China.
Moraitis also told The New York Times that after China announced the implementation of rare earth export controls, many Western governments and industry representatives attempted to contact his company, hoping to obtain rare earths mined in Brazil. However, Moraitis said that these rare earths will still be transported to China. "Their achievements are admirable, and competing with them is very difficult," he added.
Other Western rare earth suppliers are also in similar situations. MP Materials, located in Las Vegas, Nevada, received funding from the US Department of Defense to extract and separate light rare earths from mines in California. However, a document from last year showed that approximately 80% of the company's products were sold to China.
A spokesperson for MP Materials said that as the company's separation technology improves, the amount of rare earths sold to China is decreasing. They have begun selling separated rare earths to buyers in Japan and South Korea, as well as to the US National Defense Stockpile. MP Materials still lacks the ability to separate heavy rare earths and is attempting to build a factory to separate heavy rare earths with funding from the Pentagon.
However, Thras Moraitis, CEO of Serra Verde, pointed out that building such factories will take several years, and even if they succeed, finding heavy rare earth supplies may still be difficult. Rare earth expert Constantine Karayannopoulos bluntly stated, "You can dig them out, but the West currently has no capability to separate dysprosium and terbium from these raw materials."
The New York Times commented that this situation reflects how far behind the West is compared to China in terms of critical rare earth minerals for the economy and military, leaving few good options for catching up. "Although this mine belongs to American investors, the mineral resources will still flow to China."
China has consistently dominated in rare earth mining and refining. According to data from the International Energy Agency, in 2023, China accounted for more than 60% of global rare earth ore production, but controlled 92% of the processing stage, nearly monopolizing the global rare earth processing sector. The US Geological Survey stated that from 2020 to 2023, 70% of the United States' rare earth compounds and metal imports came from China.
This article is an exclusive contribution from the Observer Network and cannot be reprinted without permission.
Original Source: https://www.toutiao.com/article/7494084613535482420/
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