Due to the skyrocketing price of gold and precious stones in recent years, it would be easy to assume those are among the rarest minerals in the world. The truth is far more complicated. Diamonds are actually as rare as suppliers would like to make you think, which is why the market is tightly controlled by just a handful of cartels that control supply while artificially increasing demand.

While gold may owe its status as a precious metal due to its rarity, there are other minerals that are even rarer and rather than just being used in jewelry and trinkets, these metals are a fundamental part of our modern world.

These are the rare-earth minerals or lanthanides that include a set of 17 nearly indistinguishable lustrous silvery-white heavy metals. Scandium and yttrium may not have the luster of gold or the clarity of diamonds, each of those have unique – yet different – electronic and magnetic properties that are crucial in modern electronic devices.

Over the past quarter of a century, China has sought to become a strategic leader in rare earth minerals – and it now controls the global supply of those 17 minerals. What is worrisome is that those minerals aren’t just used in smartphones and electric vehicles. They are also used in many military weapons systems including those in Lockheed Martin‘s F-35 Lightning II Joint Strike Fighter. A Congressional Research Service report said that each F-35 required 417kg of rare-earth materials for critical components including the aircraft’s electrical power systems.

Beijing controls the market, and has demonstrated a willingness to leverage its weight in pursuit of its political objectives.

“Those systems are made with materials that come from other parts of the world including Asia and Africa,” Dr. Robert Sanders, chair of the National Security Department at the University of New Haven told ClearanceJobs. “Those rare earth minerals are used in the things we use every day, including computers and cellular phones, but those are also used in components in our stealth aircraft. The minerals come from China.”

The White House plans to conduct a review of key U.S. supply chains, including those for semiconductors, high-capacity batteries and rare earth metals, according to recent reports. Part of the Biden Administration plan will be to review gaps in domestic manufacturing and supply chains that are dominated by or run through “nations that are or are likely to become unfriendly or unstable.”

Rare and Valuable MiNerals

The global rare earth mineral trade is actually small compared to other commodities. According to data from the Center for Strategic and International Studies’ ChinaPower, the value of worldwide earth imports stood at just $1.15 billion, a small fraction of the $1 trillion in global crude oil imports for the same year.

However, the total value of goods produced using the minerals is massive. And while China may not be an exporter of oil, it does control 80% of the global supply of those rare-earth minerals.

And while gold and diamonds are known to be rare, few understand the value of materials that at times can be difficult to pronounce – such as dysprosium, praseodymium, and the aforementioned yttrium. Yet, in 2019 China exported 45,552 metric tons of the stuff with 36% going to Japan and 33.4% heading to the United States.

Rapid Growth in the Mineral Market

China’s dominant control of the minerals is the result of a decades-long strategy to leapfrog over nations in certain sectors. Beijing not only sought to reform the industries, including mining, to enhance the efficiency, but also addressed environmental protections. China also issued export tax rebates in the 1980s, which in turn lowered costs for mining companies and in that time took over the market.

“Beijing understands the environment under which if they stopped allowing access to these things,” added Sanders. “The playing field was far more level 30 years ago, and China accounted for just some 30% of the market, which was on par with the United States. Now they’re closing in on controlling 90% of the market, so the United States needs to scout out new markets.”

The truth is that the rest of the world now produces more rare earth minerals than it did 30 years ago, as does the United States. The problem is that those minerals are used in so many devices that it is hard to keep up with the demand. China has steadily tightened export quotas, which has caused the average price of global rare earth imports to skyrocket. Now Beijing is in the driver’s seat and that could threaten U.S. defense interests.

“There is a real danger, it may not be a present danger, but it means that the U.S. must find other sources to obtain those minerals,” added Sanders.

However, as a recent report from The Financial Times suggested, if Beijing limits the exports too much, it will just motivate China’s rivals to accelerate their own production capabilities – and in turn undermine China’s dominance in the industry. Already the Pentagon has signed contracts with American and Australian mining firms to boost onshore refining capacity and reduce the reliance on China. China has in turn begun limiting the exports as it faces a glut of supplies at home.

Mineral Recycling Efforts

A question then often asked is that if the minerals are as rare as suggested, why aren’t there efforts to reclaim them in recycling efforts. The reason comes down to many in the world of electronics – it just isn’t worth the cost. As a result there are limited efforts to recycling those critical elements, because even with skyrocketing prices it is simply cheaper to buy virgin materials.

“This is all about recovery cost vs. the junk cost,” said Sanders. “If the recover cost is more than the junk cost, a businessman will say ‘goodbye’ to the used device. So until there is a way to make it profitable, there is no incentive to reclaim through cycling. It is a money game for the businessman right now.”

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Peter Suciu is a freelance writer who covers business technology and cyber security. He currently lives in Michigan and can be reached at petersuciu@gmail.com.