There are seven metals that can be found in the center of the trade war. They are called severe rare earths and are not only extremely important for many military applications. The F35 combat jet needs £ 900 on heavy rare earths, some American submarines even ten times. For years, China, who has a monopoly on its further processing and thus on its global use, has threatened to play this card. Since the trade war was finally escalated in early April, China has actually exported the export. The rest of the world, as industrial representatives describe it, has inventory for a few weeks. If exports do not start again soon, a production stop threatens in many industries. There is no car without rare earth, it says at the car show in Shanghai. It is more about weeks than for months. Hildegard Müller, President of the Association of the Automotive Industry (VDA), publicly raises the alarm and demands that Brussels be intervened. The EU Commission should “discuss the situation with the Chinese side in order to find a timely solution”. Müller is on political conversations in China this week. China’s sharpest sword are “restrictions on the export of rare earths are the hottest sword that the Chinese could pull out,” says Harald Elsner from the German Raw material agency (DERA), which is part of the business area of the Federal Ministry of Economics and Climate Protection. However, the geologist points out that the latest list from Beijing is not stringent. “We are not aware of the potential military meaning (dual use) in every raw material affected.” Some elements are more relevant for the medical sector. From a total of 15 rare earths, six are affected by Beijing’s exportemargo. According to Elsner, it is metals whose production volumes are rather low, but which are more difficult to substitute. In contrast, of the other nine rare earths exports China, on the other hand, large quantities of customers all over the world, so it is also about a lot of money. The seventh affected metal is scandium, which is mostly one of the rare earths. It strengthens aluminum in alloys, but also makes it more flexible, more heat -resistant and easier. That is why it is used in airplanes, for example. Perhaps there is also a sign of US President Donald Trump, since Scandium also plays a role in the production of golf clubs. Activate External content in his counter -strike after Trump’s tariffs on his “Day of Liberation” in early April had introduced new export controls for the rare earths. “These came into force immediately without a lead time,” says VDA President Müller. The exporters would now have to apply for new licenses for all countries. That is why exports to Germany are also affected. In order to obtain the licenses, companies have to provide far -reaching information, according to industrial circles. For example, you have to describe how many magnets you install in an engine, you have to provide photos and technical drawings of it and specify the end products and their sales regions. This is the same as a disclosure of business secrets. South Korean media reported this week that companies had been warned of not delivering products with difficult rare earths from China to US military companies. Müller expects “at least six to eight weeks” to be granted and relies on similar experiences with Germanium, gallium and antimon last year. However, she warns: “The exporters do not have a guarantee of a granting of the new licenses.” How long do the inventory on rare earths last? Initially, the need could mostly be covered by inventory. Until a new regulation from China Griffen, additional needs could be covered on the world market. Other regions could suffer more. “In the long term, the United States will meet the toughest,” believes Elsner, if the country is permanently cut off by imports from China. There are efforts in the United States to set up their own production chains. However, one has to put a clear question mark behind the capabilities of the Americans, which is not mining, but the refining. Because the respective raw materials must be obtained from the boulders in complex processes. This requires appropriate systems and the necessary procedural knowledge – no raw materials without refining. Often only the Chinese are able to put on the processes, according to Elsner and, as an example, mentions the metal terbium, which is also one of the rare earths. In order to win Terbium in a purity of 99.99 percent, according to Chinese information, around 1,700 work steps are needed within 30 days. You can’t just copy that. The Denkfabrik Center for Strategic and International Studies (CSIS) in the American capital Washington wrote in an analysis that all further processing of the difficult rare earths are currently taking place in China. There are also occurrence elsewhere, for example in Australia. However, these are still sailed to China because the necessary skills and systems are missing in Australia. The Australian Lynas group, however, is currently working on building its own separation system for the two rare earths of dysprosium and terbium in Malaysia. Support comes from Japanese partners who have already secured a large part of the expected annual production. According to CSIs, similar initiatives and investments are available in several other countries. Activate external content, China’s dominance is not limited to the rare earths, as DERA data shows for 2022 (see map). If you look at the distribution of mining production in the world, in which countries are broken down, China is at the top with 15.5 percent, closely behind Australia with its many mineral resources. The remaining deposits are spread across many countries. It is therefore possible to spread its sources of supply more broadly and make itself more independent of China, it is said by the DERA.CHINAS supremacy, especially in the following supply chains. According to DERA data, the country focuses on almost 56 percent of all refinery capacities. No other country comes close to this value. According to the Federal Statistical Office, Germany imported two thirds of its rare earths from China last year, but some of the metals are imported almost exclusively from China. If one speaks to managers how the world could indicate this dependence, often comes in response that nobody wanted these refineries in the industrialized countries in rapid globalization. The business is considered dirty and margin weak, “in principle these are huge chemical abrasions,” says one. When separating rare earths, there is radioactive material. Therefore, this part of the value chain was happy to leave the Chinese, where there was little resistance from environmentalists and dishes. Today, industrialized countries falls on this policy. According to investigations, the world is depending on around 30 raw materials depending on the realm of the middle. Without it, the energy transition falls into the water as well as the production of chips, the desired armaments offensive would come as well as the production of machines and tools. The Beijing was willing to play this power strategically in the summer of 2023 when export controls for gallium and Germanium imposed. The annual production of both metals is low in comparison, but they are immensely important for the production of semiconductors and numerous other tech products. From now on, exporters had to obtain approval from government agencies. This was still granted for a long time. “However, the Chinese made it clear that they have quite a pound in their hands,” says a German industrial representative. Why the element Wolfram is so important for the time of this year, Beijing expanded the list significantly to 25 critical metal products and technologies for their production. This measure looked like a poisoned inaugural gift to US President Donald Trump. The list now also includes Wolfram, which plays an important role in the hardening of metals in connection with carbon and is just as important for the production of cutting tools as for sports equipment or special penetrating ammunition. More than 80 percent of the tungsten offer currently comes from China, alternatives are therefore in great demand. In the second quarter of 2025 in Sangdong in Korean, the mining company Almonty wants to put the largest mine outside of China into operation with a volume of 2300 MTU (metric ton units) Wolfram trioxide in the first year and almost 4800 in the second year. CEO Lewis Black knows that this will only be a drop on the hot stone. “It is clear to me that I have to say to many interested parties that I unfortunately cannot supply them immediately.” Until in two years, the United States wants to build complete supply chains that cover their military need for rare earths. The necessary systems are currently being built in California and Texas. However, these would come to less than one percent of Chinese capacities. CSI’s experts doubt that the plans are sufficient so that the US Ministry of Defense can really become independent of deliveries from China.
Rare earths: China’s trump card in the business clash
