So-called “rare earth elements” (“REE”) are extremely important to our daily lives and our economy. REE are a set of seventeen chemical elements. They are used in cell phones, batteries, computer disk drives, flat panel TVs, fiber optics, lasers, radar, solar cells, etc. There has been an explosion of demand for REEs given the huge increase in the production demand for rechargeable batteries, cell phones, and TVs. REEs are used in nuclear bombs, guided missle systems and GPS, and thus are very important for national defense.

Note that despite having the word “rare” in their name, most REEs are not rare and are abundant in the earth’s crust, but they are hard to find in economic concentrations.

Here’s a table of each rare earth element and its common use:

The vast majority of REEs are mined in China and, as such, key parts of the U.S. economy and technology are dependent on imports from China of REEs. Here’s a great diagram produced by the Congressional Research Service:

Here’s a graph showing the production history of REEs since the 1950s thru 2017.

Having a single country control the vast majority of these critical elements is dangerous and especially with a country with which we are embroiled in a trade war. In September of 2018, REEs were initially included in the list of goods subject to tariffs upon import to the U.S., but were removed from the list at the last minute. Truly, REEs may be our Achilles’ Heel when it comes to a trade war with China. Past announcements to limit production of REEs by China (such as in 2009 and the second half of 2018) has been met with near panic across many industries. According to a story in Reuters, “the U.S. military is worried about China’s dominance of the rare earths market, calling it a ‘significant and growing risk,’ according to a Pentagon study released earlier this month.”

One possibility being explored by various entrepreneurs is whether mining REEs and other metals from asteroids or the moon is feasible.

Of course, China makes a lot of money selling REEs to the U.S. It would be a major economic hit for them to just stop selling REEs to the U.S.