Volume 7, Issue 2, 16 February 2024, Pages 242-252 Journal home page for One Earth
Article
Interdependence in the rare earth element supply between China and the United States helps stabilize global supply chains
Author links open overlay panelWei-Qiang Chen 1 5 6, Matthew J. Eckelman 2, Benjamin Sprecher 3, Wei Chen 1 4, Peng Wang 1 5 6 7
1 Key Lab of Urban Environment and Health, Institute of Urban Environment, Chinese Academy of Sciences, Xiamen, Fujian 361021, China
2 Department of Civil & Environmental Engineering, Northeastern University, 360 Huntington Avenue, Boston, MA 02115, USA
3 Faculty of Industrial Design Engineering, TU Delft, Landbergstraat 15, 2628 CE Delft, the Netherlands
4 Department of Environmental Science and Engineering, University of Science and Technology of China, Hefei 230026, China
5 Ganjiang Innovation Academy, Chinese Academy of Sciences, Ganzhou 341000, China
6 University of Chinese Academy of Sciences, Beijing 100864, China
Received 3 February 2023, Revised 18 April 2023, Accepted 13 January 2024, Available online 5 February 2024, Version of Record 16 February 2024. Published: February 5, 2024
We mapped global REE flows from minerals to market annually from 2000 to 2022
• REE trade between China and the United States has grown increasingly intertwined
• Trade benefits all participating nations along global REE supply chains
• We suggest incorporating REE trade agreements into climate cooperation
Science for society
Rare earth elements (REEs) are strategic resources and vital components of many technologies, especially those key to the low-carbon energy transition (i.e., wind turbines and electric vehicles). There is an unvalidated perception that REE supply is heavily concentrated in a handful of nations, particularly China. This assumed threat to REE supply chain security has raised concerns, particularly in the United States, and has led to domestic resource exploitation and even national alliances, which could have undesirable socio-environmental ramifications. A dynamic material flow analysis, which can trace REE flows across global networks from resource mining to product sales, reveals that between the years 2000 and 2022, the United States has, in fact, become a net exporter of REEs, with China as its largest customer. The growing interdependence of REE trade between China and the United States has stabilized rather than disrupted global REE supply chains, benefiting both importer and exporter alike.
Summary
Rare earth elements (REEs) are vital to the development of low-carbon technologies. There are rising concerns in the United States and elsewhere about REE supply chain stability and risks given the unvalidated perception in the heavy reliance of China by far the largest REE supplier. However, the relationship between key countries at different stages of global REE supply chains remains unclear. Here, we use a dynamic flow analysis to explore supply dependence between the United States and China by tracing REE flows from mineral mining to market between 2000 and 2022. Our results indicate complementary and cooperative US–China interactions, especially after 2018 when the United States became a net exporter of REE and China’s largest supplier, and China became the largest importer of the US REEs and manufacturer of REE-enabled low-carbon technologies. This intensifying interdependence stabilizes REE supply chains and highlights the importance of cooperative REE trade networks.
Introduction
Rare earths (REs) are a group of 17 elements with distinctive and versatile functions that are critical to key technologies for a global sustainable transition.1,2,3,4 Products like mobile telephones, wind turbines, electric cars, and military hardware5 are heavily REs dependent. REs also play a crucial role in the innovation and development of emerging high-tech and green applications.6 Consequently, there has been a dramatic increase in global production of REs,7 and their future demand is expected to accelerate to match the global expansion of low-carbon technologies required by net-zero climate targets.8,9,10,11 However, REs mineral deposits are not equally distributed from a geographical point of view, and in the past few decades, nearly all REs products have been supplied by China.12 This situation, coupled with occasional disruptions in REs supply and trade flows,13 has led to concerns regarding the supply chain stability of REs, including recently in the United States as emphasized in the Executive Order 1381714 and the following Executive Order 14017 for 100-day review on its critical supply chains.15,16
International trade helps to close the substantial imbalance between the supply and demand of critical minerals across nations. In the past decades, increasing mineral trade volumes and reductions in tariffs have led to improving resource availability for importing nations.17 Nevertheless, the dependence of mineral trade is still viewed as a potential risk to national security,18,19 especially for metals with a so-called “China-concentrated” supply chain.20 The latter relates to the 2010 Chinese export embargo of REs to Japan, which is widely considered to have caused a price spike and global panic in manufacturing supply chains.12
Given the perception that the United States is heavily reliant on Chinese supply,16 REs are at the frontline of the US–China trade disputes and other geopolitical developments such as recent “de-coupling” or “friend-shoring” strategies.21 Despite the long-term trend toward globalized trade and resource availability, trade restrictions are still frequently applied by exporting nations.22 Conversely, under the assumption that reliance undermines security, there have been growing efforts in the United States and elsewhere to reduce dependence on critical mineral imports by requiring product supply chains to rely on domestic resources or allied nations.14,23 However, these efforts may risk reducing efficiency and boost extraction activities in some areas, which are both economic costly and environmentally damaging.19 Friend-shoring on some emerging suppliers is also likely to fuel competition and bring new risks, such as the case of Indonesia to ban the export of nickel ore. Given the delay in opening new supply sources, this pattern ultimately jeopardizes the speed and cost24 with which technologies crucial to the energy transition can be implemented at scale. Thus, it is imperative to have a comprehensive understanding of critical mineral flows across supply chains. Quantifying the interdependence among nations makes it possible to formulate policies that mitigate these risks to global sustainability.
Previous criticality assessment studies25 have provided a snapshot of the trade flows based on indicators such as net import reliance. One recent effort26 highlighted that the United States is 100% reliant on foreign sources for 20 different minerals, including REs from China. Other studies have applied complex network approaches to probe the status and stability of REs supply.27,28 However, those studies fail to systematically explore the dynamic interactions of nations along global REs supply chains.29 In 2018, the US National Science and Technology Council emphasized the need for comprehensive analyses using material flow analysis (MFA).30 However, as can be seen with some recent MFA efforts,31,32,33, such analysis is still hampered by the lack of data transparency along supply chains. This is particularly true for REs supply chains, which are characterized by relatively extensive unregistered flows.34,35
Here, we map the global REs flows from minerals to metals across regional boundaries annually from 2000 to 2022 to better understand the degree to which regions are interdependent on one another. To address the reported issues in terms of data quality and availability (e.g., unregistered production, trade), we perform dynamic MFA that covers all potential flows, with specific efforts in the clarification of (1) supply chain routes, (2) the harmonization of trade records from different regions, (3) the estimation of unregistered flows, and the (4) collection of dispersed data on REs mining, refinery, and demand from various sources. Details for our approach and datasets can be found in the experimental procedures, supplemental information, and database: https://zenodo.org/records/10396895. Building upon this foundation, we delve into the dynamics of disparities and linkages between China and the United States within the global REs supply chains over a period of rapid growth technologies that rely on these critical elements and further explore the need for international cooperation in boosting the critical mineral supply for a globally sustainable future. Our analysis reveals intensifying cooperative interactions between these two nations, as China emerges as the primary refinery centre for the United States, leading to a notable increase in mineral imports from the United States. This evolving complementary pattern is accompanied by the formation of a more diversified and dynamic regional REs supply chain. Accordingly, this result urges us to reexamine the role of international trade and global cooperation in boosting the critical mineral supply for a globally sustainable future.
Section snippets
Global RE flows during 2000–2022
Global RE flows from minerals to metals in each year are mapped by Sankey diagrams (Figure 1 for 2022; for the rest of the years and cumulative results, see Figures S1–S23), all flows are measured by RE oxide (REO) equivalents in gigagrams (Gg) or thousand metric tons (kilotons, marked as kt in the following content). Overall, there were ∼3,899 kt of REOs mined globally (Figure S23), and there exist 4 main supply chains (i.e., mining and beneficiation, roasting and leaching, separation and
Discussion
Through MFA, our analysis helps to fill the information gap related to global REs flows and trade with publicly available datasets. In general, we find a fundamental role reversal between China and the United States in their bilateral trade. Such national interdependence will intensify, given the growing efforts in seeking and operating new mineral sources worldwide. Indeed, REs reserve are neither “rare” nor “highly constrained” in China. Figure 5 shows our investigation (for details, see Table S3)
Lead contact
Further information and requests for data should be directed to the lead contact, Peng Wang ([email protected]).
Materials availability
This study generated no new materials.
Data and code availability This paper analyzes existing and publicly available data. All of the data for MFA mapping and trade flow analysis are contained in the supporting data file deposited at https://zenodo.org/records/10396895. Any additional information required to reanalyze the data reported in this paper is available from the lead contact upon request.
MFA
The study traces
Acknowledgments
We thank colleagues from Yale University and the Chinese Academy of Sciences for constructive comments and helpful discussions. This study was supported by the National Natural Science Foundation of China (nos. 71961147003 and 72274187), the Strategic Research and Consulting Project of the Chinese Academy of Engineering (no. 2023-02JXZD-03), the Research Project of Ganjiang Innovation Academy of the Chinese Academy of Sciences (no. E355F004), and the State Grid Project (no.
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