Greenland interest exposes US rare-earth deficit

By Wang Jiamei Source:Global Times Published: 2019/8/21 20:03:47

US President Donald Trump's interest in buying Greenland, the autonomous territory of Denmark, has been making headlines.

For the general public, the president's bizarre idea of buying an ice-covered island seems like a joke. Many are wondering why Trump suddenly proposed buying a sovereign nation's territory. One guess is that Greenland is abundant in natural resources, including some of the largest deposits of rare earths. A Chinese company has already been engaged in a rare-earth mining project in Greenland by acquiring a stake in an Australian company called Greenland Minerals.

So even if Trump is joking, the fantasy has exposed his anxiety about China's dominance over production of rare-earth metals, which are broadly used in high-technology products from smartphones to electric vehicles.

Since the start of the US-China trade war, rare earths have been touted as a Chinese countermeasure against the US. It is totally justified for the US government to be concerned about its rare-earth supply chain. After all, China is the world's largest producer and exporter of rare earths, and from 2014 to 2017, it supplied about 80 percent of US rare-earth imports.

Although the Trump administration has been busy seeking out and taking control of rare-earth resources globally, observers generally noted that due to the lack of rare-earth processing capacity, the US can't really diversify its source of rare-earth supplies away from China.

If anything, US pursuit of global rare-earth mines may serve as a reminder to China that it must ensure its continued dominance of the global rare-earth industry.

While China possesses the most advanced rare-earth processing technology and the biggest refining and processing capacity in the world, the country still needs to upgrade its processing technologies to enhance competitiveness in the global market. In years to come, companies in China's rare-earth industry may still purchase some mining resources around the world, but it shouldn't necessarily be their top priority. 

The most important step in securing China's dominance of rare earths is to maintain a leading position in technology by continuously improving and upgrading. After years of effort and heavy costs, China has developed a clean and efficient rare-earth processing technology system. But the rare-earth industry still has some environmental problems that need to be addressed, which is one of the important aspects of technological advancement. 

In the meantime, Chinese rare-earth producers should strive to set up a global network to better compete with overseas rivals. The government should give priority support to these areas, as China cannot afford to lose its dominant position in the rare-earth industry.

The author is a reporter with the Global Times.


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