Bloomberg Originals

The $10 Billion Hunt for the Rocks That Power the World

Rare earths are crucial for modern technology, forming the backbone of powerful magnets used in everything from phones to electric vehicles and missile systems. China dominates the global supply chain, controlling 80-90% of rare earth production and processing, and has demonstrated its willingness to use this dominance as geopolitical leverage. This was starkly illustrated during the US-China trade war when China imposed export controls on rare earths, prompting the automotive industry to warn of factory shutdowns due to a lack of permanent magnets. This vulnerability spurred a global effort to build alternative rare earth supply chains. Rare earths are a group of 17 chemically similar metallic elements essential for creating heat-resistant, high-performance magnets. China possesses the world's largest rare earth deposits, particularly of the more valuable heavy rare earths, which enhance magnet performance. The real choke point, however, is the processing and magnet production stages, where China holds approximately 90% control. This processing is costly and environmentally damaging due to toxic waste, leading many Western countries to cede this stage to China.