"This changes everything," exclaimed geologist Li Wei when his team examined in mid-January in Yunnan, a province in southern China, the largest rare earth deposit discovered since the 1960s. It was a huge mine with 470,000 tons of critical minerals valued at 216,000 million euros.
The deposit contained praseodymium, neodymium, dysprosium, and terbium, vital elements for modern technology that power everything from smartphones, semiconductors, and electric vehicle batteries to F-35 fighter jets, drones, wind turbines, radar systems, and nuclear reactors. These are some of the most sought-after resources on the planet.
"China is now even better positioned to control global supply and meet the growing demand," explained Li, from the Geological Survey of the Ministry of Natural Resources of China, referring to how the discovery in Yunnan strengthened his country's control over the important global supply chains of rare earths, a group of 17 metals that are abundant - despite their name - on the Earth's surface, most of them heavy metals. These are the same resources that have now become central in the new trade war initiated by U.S. President Donald Trump.
"China not only dominates the extraction of rare earths but also their processing and refining. This control gives it a strategic position in the global supply chain," the geologist stated. China holds 60% of the world's rare earth reserves (around 44 million tons of deposits) and processes 90%, making the Asian giant a crucial link in the vulnerable U.S. (and Western) high-tech, military equipment, vehicles, or robotics supply chains.
"The discovery of the Yunnan deposit is very significant in strengthening China's advantage in rare earth resources, improving the industrial chain, and further consolidating China's strategic dominance over these resources," Chinese authorities stated in a press release. They also explained that researchers had developed a pioneering, more sustainable technique to increase rare earth production. This technique is based on electric fields formed by electrodes that reduce extraction time and energy use. It also limits the harmful emissions caused by conventional mining, where large amounts of concentrated ammonium salt solutions are used above ground to recover minerals.
Last year, in response to the technological crusade by the previous Biden administration to curb the sale of advanced chips to Chinese competitors, Beijing banned the export of three metals - gallium, germanium, and antimony - to the U.S. The list expanded last week when Chinese authorities approved new restrictions on the imports of five critical minerals (tungsten, tellurium, bismuth, indium, and molybdenum) after a 10% additional tariff on Chinese products announced by the Trump administration came into effect. Although Washington pointed out that some of these new restrictions do not pose a serious threat because the U.S. is a significant producer of metals like molybdenum, used to make steel stronger.
According to a report by Frank Umbach, an energy security researcher at the University of Bonn (Germany), the U.S. depends on China for 60% of its critical raw material supply, crucial for developing advanced weaponry. This leads many experts to point out that this is a weak point where Beijing can inflict significant damage on the world's largest economy if Trump decides to continue hitting first with his trade war.
China has on several occasions used its dominance in the rare earth market as a tool in trade disputes. For example, in 2010, it reduced mineral exports to Japan during a territorial dispute, causing global concern about the security of the global supply chain.
In this rare earth front, one of Trump's latest claims comes into play: Greenland, the twelfth largest territory in the world, two million square kilometers of rock and ice where only 56,000 people live, making this Danish territory the least densely populated on the planet.
Trump's interest in Greenland is closely related to its geographical position as a key passage to control the trade routes opening up in the Arctic due to melting ice, a game in which China is involved. But Greenland is also coveted because it is rich in the much sought-after critical minerals.
According to a report published in 2024 by The Economist, the island has large deposits of these minerals. Last year, U.S. officials pressured the developer of Greenland's largest rare earth deposit not to allow exploitation by any company linked to China.