Why This Matters
- Rare earths are critical to clean energy technologies, defence systems, and consumer electronics – a supply disruption would ripple across multiple industries.
- The Trump-Xi summit could determine whether China follows through on its threat to ban rare earth exports, which would intensify global supply chain pressures.
- Efforts to diversify supply, such as the Brazilian demo plant, are still years from commercial scale, meaning dependence on China will persist in the near term.
Background
Rare earth elements are a group of 17 minerals essential for magnets, batteries, and advanced electronics. China has dominated both mining and processing for decades, giving it significant geopolitical leverage. Previous trade tensions have seen Beijing threaten export controls, most recently in response to US technology restrictions. The upcoming summit is the second between Trump and Xi this year, with trade and technology at the top of the agenda.
Key Perspectives
[Rafael Moreno / Viridis Mining]: Argues breaking China's stranglehold is essential for supply security and that a deal at the summit is needed to avoid escalation. His company's demo plant in Brazil represents a potential alternative for EU buyers.
[EU and Western governments]: Facing pressure to secure access to rare earths without relying on a single, potentially adversarial supplier. The EU has identified critical raw materials as a strategic priority.
[China]: Holds a commanding position in the rare earth supply chain and may view export restrictions as a bargaining chip in broader trade talks. Its government has not commented publicly ahead of the summit.
What to Watch
- The outcome of Thursday's Trump-Xi summit – any joint statement on rare earths or trade concessions.
- Whether China renews or modifies its threat to ban rare earth exports in the weeks following the summit.
- Progress at the Brazilian demo plant – milestones in scaling toward commercial production by 2028.