How China’s rare earth monopoly has the US scrambling from Greenland to Ukraine

China plays a crucial role in the global rare earth minerals market, a position that has significant implications for US economic and strategic interests. Accounting for approximately 70 per cent of the world’s rare earth production, China not only mines these critical elements but also dominates their refining and processing. This control grants Beijing considerable leverage in geopolitical disputes as seen in its imposition of export restrictions on essential minerals such as gallium, germanium and tungsten in response to US trade policies.

Rare earth elements, a set of 17 essential minerals, play a vital role in manufacturing advanced electronics, high-performance magnets, superconductors, military equipment, and sustainable energy solutions.

China has further solidified its control over rare earths by proposing to restrict private firms from mining and processing these materials. According to mining.com, the new draft regulations from China’s Ministry of Industry and Information Technology state that only large state-owned enterprises will be permitted to extract, refine and separate rare earth elements. This move strengthens Beijing’s ability to dictate global supply and impose further export restrictions if necessary.

China has also placed strict controls on the export of rare earth extraction technology ensuring that even if nations like the US find alternative deposits, they may still struggle with processing the materials efficiently.

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A South China Morning Post report says the US is heavily reliant on China for rare earth imports. The US Geological Survey (USGS) reports that 70 per cent of American rare earth consumption is sourced from China. The potential for further restrictions has led the US to actively seek alternative sources of these critical materials. This has driven renewed interest in deposits located in Greenland and Ukraine as well as potential collaboration with Russia, despite ongoing geopolitical tensions.

China possesses the world’s largest rare earth reserves estimated at 44 million tonnes. According to the USGS database, Ukraine is not among the countries with documented rare earth reserves. Russia holds the fifth-largest reserves globally with 3.8 million tonnes—twice the amount found in the US.

US efforts to secure alternative supplies

US President Donald Trump has aggressively pursued rare earth resources to counter China’s dominance. His initial plans included securing Greenland’s vast reserves, estimated at 1.5 million tonnes, as well as tapping into Ukraine’s potential supplies. Trump even suggested that Ukraine compensate the US for wartime assistance through profits from its rare earth reserves. However, the true extent of Ukraine’s rare earth deposits is still a matter of estimate and speculation as they are not well-documented in the USGS database.

Ukraine’s Institute of Geology confirms the presence of rare earth element deposits in the country, though details on reserves remain classified, the South China Morning Post report said. These include neodymium, essential for EV batteries and wind turbines, lanthanum and cerium used in lighting and televisions and erbium and yttrium, found in nuclear power and laser technologies.

With an estimated 500,000 tonnes, Ukraine holds one of Europe’s largest confirmed lithium reserves. Additionally, its graphite reserves—crucial for EV batteries and nuclear reactors—account for 20 per cent of global resources.

However, Ukraine has stated that most of its mineral wealth lies in regions occupied by Russia since the 2022 invasion.

Russia’s role in the rare earth equation

While the US has sanctioned Russia over its invasion of Ukraine, Moscow has emerged as a potential alternative supplier of rare earth minerals. Russian President Vladimir Putin recently indicated that Moscow, whose rare earth reserves is double that of the US could collaborate with Washington if sanctions were lifted. Prior to the sanctions, Russia was a significant supplier of aluminium to the US, highlighting a history of resource trade between the two nations.

If an agreement were reached, it could diversify the US rare earth supply chain and reduce dependence on China. However, the feasibility of such a deal remains uncertain given the current state of US-Russia relations although they have started being on talking terms at least of late.

Greenland factor and mining challenges

Greenland has become a focal point in the US strategy to secure rare earths. With an estimated 1.5 million tonnes of reserves, the island is rich in critical minerals including lithium, titanium, cobalt and nickel. However, mining operations face regulatory challenges, environmental concerns and opposition from local communities. Climate change is making resource extraction easier, but Greenland’s harsh terrain still presents difficulties.

Greenland holds strategic importance for US national security as both Chinese and Russian icebreakers and vessels frequent its waters in greater numbers than those of the US. The island is crucial for missile defence, submarine operations and northern shipping routes.

Beyond its geopolitical significance, Greenland is also rich in untapped critical minerals including rare earth elements. In addition to these, its vast mineral wealth includes lithium, titanium, cobalt, niobium, graphite, nickel and zinc. However, mining for uranium, as well as new oil and gas exploration has been banned.

Future of US rare earth strategy

The tussle for rare earth minerals explains US President Donald Trump’s strong pitch for the control of Greenland or a deal with Ukraine for the supply of these minerals. This emerges from the ground reality that the US faces a tough challenge in securing rare earth supplies due to China’s tight grip on global production and distribution. For the US, exploring deposits in Greenland and Ukraine would take time. However, Russia’s latest offer might work in the US’s favour if a favourable Ukraine deal is agreed upon by the stakeholder nations. Russian supplies may provide an immediate fix to the US’s critical mineral problem, and give it a strong foothold to challenge the monopoly of China in the sector.