Why China's grip on rare earth minerals gives it leverage

HostEvery time I look at a high tech gadget, like a phone or a drone, I keep hearing about these things called rare earth metals. It sounds like something out of a sci-fi movie, but people seem really worried that one country has a lock on all of them. Why does China having these metals matter so much for the rest of us?

GuestWell, first off, the name is a bit of a trick. They aren't actually that rare. You can find them in most places if you dig deep enough. But here is the catch. Even though they're all over the place, they're mixed in with the dirt and with each other in a way that makes them a nightmare to get out. It's like trying to take a single drop of blue food coloring out of a giant vat of purple soup. China is the only place that has spent the last thirty years really getting it right. They didn't just win because they have the most rocks in the ground. They won because they built the giant kitchen and figured out the best way to cook. They handle about nine out of every ten pounds of these metals that get used on earth.

HostSo it's less about who owns the mine and more about who owns the factory next to the mine?

GuestYeah, you hit on the big secret. Look at the mine in California called Mountain Pass. For a long time, we would dig the rocks up there and then put them on a boat to China. We had the stuff, but we couldn't do anything with it. We had to send it to them so they could use their chemicals and their big machines to pull out the specific metals we need for things like car motors or jets. Even if we have the rocks, we're still sending them over there to be cleaned. If they decide to stop taking our rocks or stop sending back the clean metal, our factories just stop. It's a huge power move because they can turn the tap off whenever they want.

HostBut if they're just metals, why can't we just build our own cleaning plants? We have the money to build them here.

GuestWell, we have the money, but we don't really have the heart for it anymore. Cleaning these metals is a very messy, very dirty business. You have to use tons of acid and you end up with a lot of toxic waste and even some slightly dangerous leftovers. For a long time, the West was happy to let China handle the mess while we got the cheap parts. Now, we're seeing that while we were avoiding the dirt, China was building a wall of tools and secrets. Just recently, they even banned shipping out the tech used to pull these metals apart. So even if you build the factory tomorrow, you might not have the right to use the tools that make it work.

HostWait, so they aren't just holding onto the metals themselves, they're locking the doors to the library so nobody else can learn how to work with them?

GuestHmm, that's a good way to put it. And it goes even deeper than that. The real prize isn't just the clean metal. It's the magnets. There's a special kind of magnet made with these metals that's really strong for its size. You need these for the motors in every electric car and for the parts in wind turbines. China makes almost all of these magnets for the whole world. If you want to build a green energy future, you basically have to go through them. They have turned a hole in the ground into a tool they can use whenever a trade war heats up. They can just tweak the rules on who gets to buy a magnet or a certain type of metal powder, and suddenly a car maker in Europe is in big trouble.

HostIt feels like a massive trap. We wanted the clean tech, but we handed over the keys to the entire house to get it.

GuestPeople are trying to catch up now, but it's hard. The US and other countries are trying to build their own lines from start to finish. But you have to remember, China has been at this since the eighties. They have the schools, the people who know the work, and the special tools. They can keep their prices so low that it's almost impossible for a new company to stay in business. If a new shop opens up somewhere else, China can just drop their prices for a few months until the new shop goes broke. It's a forty year head start that they're not going to give up easily.

GuestThe real test isn't just digging a hole in the ground, but whether anyone else can learn to do the messy work of cleaning those metals as well as China does.

HostThe phone in my pocket and the car in the driveway both seem a lot more fragile when you realize they depend on a single string of factories halfway around the world.