00:00China has the US in a periodic table chokehold. 17 of them, really. One for each of the so-called
00:06rare earth elements found in nature. China has a monopoly on space-age sounding stuff like
00:12promethium and gadolinium and dysprosium, and without which you cannot make things like today's
00:19fighter jets and submarines, smartphones and TVs, wind turbines and nuclear reactors, radar, sonar,
00:26camera lenses, fuel cells. You want those things. You have no choice but to go to China.
00:31Because let's set aside for a moment that just to find these rare earth elements underground,
00:36there's no better place to go than China. Brazil has less than half what it has,
00:42and no other country comes close, including the United States, by the way. And just to put that
00:47inequality in context, if the US mined what China mines in a year, it would completely exhaust its
00:53own reserves in well under a decade. Not good if you still want to be in the fighter jet business
00:5810 years from now. But more important than where you can find these rare earths is where you can do
01:03the much more difficult job of turning those clumps of dirt, rock, and metal that you dig up
01:09into something pure enough you can actually use. China is one of the only places in the world with
01:16the expertise and the infrastructure to do that kind of processing. 90% of the world's rare earth
01:23refining happens in China. And this is enormous leverage.
01:28China is doing that with rare earths. It's limiting this critical ingredient that no one else is
01:33producing. This is why we need to be able to make our own chips and our own computers and our own
01:36products downstream, because it takes away leverage from China. They do have a lot of leverage right now.
01:41Among Donald Trump's many day one priorities, start playing catch-up. But the US is so far behind,
01:49it's worth asking, exactly how did China win the rare earth race so decisively?
02:00China gave itself such a huge lead. First, by realizing there was something worth racing
02:05four. One of the most important and easily the most valuable uses of rare earth elements is making
02:12magnets. Except these aren't just like regular iron magnets. They're many, many times stronger.
02:1810, 15 fold. And magnets are important because they're like the little invisible muscles that make
02:25everything in modern technology move. In a motor, for example, magnets can make things spin. If you make
02:32one strong enough, you can make a maglev train float. Make one small enough, and you can pack
02:39more and more electronics into something like this. And if you combine strength with small size, that's
02:46called efficiency. Now, all of a sudden, you can make something like a wind turbine spin with less wind.
02:53These rare earth magnets are what make modern, increasingly miniaturized technology possible. They're what make
03:00clean and green technology possible. And they're what make the world's most powerful military technology
03:06possible. Consider just some of those rare earth elements China locked down back in April under strict export
03:14controls, picking and choosing which countries get access to them. Something like samarium, a critical element of
03:20samarium cobalt magnets, incredibly reliable at high temperatures, so you might use one in a missile guidance
03:26system or an F-35 jet engine. Are both China and the US keenly aware of what this kind of dependence means?
03:35Yeah, absolutely. Or how about terbium? If you're a US Marine carrying out a nighttime raid, that's useful
03:41in night vision goggles, turning infrared light into something visible. Scandium used in ultralight applications,
03:48where weight matters. So aircraft, naval, aerospace applications. Because scandium is strength,
03:55durability, resistance to fatigue. The same way that we competed for oil and energy sources in the 19th
04:03and 20th centuries is how we are going to and how we already are competing for these minerals in the
04:1021st century. We are in a competition for these minerals now and that competition is going to last
04:15probably the rest of my lifetime. So you can start to see why controlling the elements that allow the
04:20manufacture of everything from fiber optics to semiconductors to MRI machines, why that might
04:26be helpful to the national security interests of one of the fastest growing and most important economies
04:32in the world. Especially when they start to notice a glaring weakness in their most formidable competitor.
04:39If step one for China in establishing rare earth dominance was recognizing potential, step two was recognizing
04:52opportunity. From the early 1960s to the mid-90s, the US was the global leader when it came to rare earths. But what
05:01gradually began to take hold was this view that some work was just too dirty to do. And maybe it was better to let other
05:07countries do that dirty work. We were always very happy for this environmentally
05:15negative industry to take place somewhere else. And China does not have the same environmental restrictions.
05:20So China went all in, making it all but impossible for the US to even compete. Because China didn't worry
05:27as much as the United States about just how damaging to the land, to the soil, to crops, to groundwater that this
05:34mining and refining of rare earths might end up being. Were there intellectual development disorders
05:40among children? And even 15 years later, potentially harmful levels of rare earths in their urine? Sure.
05:47And this would become a real focal point of recovery later on. But at the time, it was a cost of doing business.
05:54You can look at every single five-year plan China has put out for the last 30 years. Every single one,
06:02China talks about the importance of strategic industrial capacity, which is almost entirely
06:08a code word for this type of refining capacity. At first, it was purely an engine of economic
06:14development, and now it is a strategic asset. China also realized very early on how demanding it would
06:20be. Because there's a saying when you talk about rare earths, that they're more earth than rare,
06:26meaning you can find them in lots of places. The difficulty is in separating out these sometimes
06:33trace elements from all the other junk that you dig up. Because it's not like you just find a pure vein
06:38of praseodymium somewhere. It's more like you have this mound of material that you need to crush, you need
06:44to grind it up and then chemically separate and then refine and reconstitute it as something useful.
06:50This is hugely energy intensive. Just for some context, separating rare earths takes 9 to 13
06:57times as much power as simply taking them out of the ground. Good thing then for China that it could
07:03rely on its expansive and expanding network of coal-fired power plants. Energy costs in China are
07:11much lower because it is super low cost coal power. And all of this only begins to hint at the massive
07:18scale on which the Chinese government built this industry from nothing, providing land, research
07:25funding, subsidies, loans, tax credits. The state also built a lot of the infrastructure that you need.
07:31The mining industry and especially the rare earths industry is extremely energy intensive,
07:35water intensive. It requires transportation infrastructure. So the Chinese state played a
07:40very active role in that. It also developed a series of rules designed to keep all of its talent
07:47inside Chinese borders. China has essentially banned that Chinese nationals from being able to work on
07:54rare earth projects anywhere in the world without explicit authorization from the Chinese government.
07:59So what China is really doing is locking down on any leakage of technology or human capabilities.
08:05This is a huge problem for the United States in particular. When you consider that according
08:10to one Washington think tank, more than half the current domestic mining workforce will need to be
08:15retired and replaced by 2029. That's an overwhelming challenge compared to the just 327 degrees awarded in
08:242020 in mining and mineral engineering. And in stark contrast with China, where just one program at one
08:31university has 1000 undergraduates and 500 graduate students alone. The net result of this all-in hyper
08:40competitive approach? Complete top-down dominance. This innermost ring, China's share of all rare earth
08:47mining worldwide, close to 60 percent. Not even the US comes close here. And as you go further down the
08:53supply chain, separating, refining, and making magnets of the rare earth that's pulled from the ground,
09:00China owns a whopping 92 percent of global magnet production. Not only do they have the minerals,
09:06they then separate them, and they actually manufacture them. So what China has done is
09:11managed to master the entirety of the supply chain. China understands full well what leverage it now has
09:22over the US. China has expanded export controls on rare earth elements. This measure is aimed at
09:29industries such as defense and semiconductors. This as the White House plans to hit an additional 100%
09:34tariff on Beijing starting November 1st. The US and others have stockpiles, but they will go through those
09:41stockpiles relatively quickly. And the Chinese are counting on this being one pressure point. And Donald Trump likely
09:47understands this critical weakness, which he has tried to shore up with his early obsession with Greenland.
09:54To guarantee access to these precious materials, Trump wants to buy Greenland. And if that doesn't work,
10:01simply take it. We need Greenland for national security and even international security.
10:08And his insistence that American involvement in Ukraine come with mineral deal strings attached.
10:14We want something for our efforts. And we said rare earth. They're very good rare earth. We're looking
10:20for rare earth all the time. And they have a lot. But even on this global scale, searching for
10:26advantages abroad, China has a years long head start. It's Belt and Road Initiative, this massive
10:33infrastructure project spanning basically the entire eastern half of the world, building railroads, pipelines,
10:39ports, shipping lanes. It's become this trillion dollar project that's really now about extending Chinese
10:46influence and investment around the world. Its biggest expenditure under this umbrella is in energy.
10:52But mining comes second. Since 2013, China has pumped over 96 billion dollars into the mining industry
11:00globally. And last year in 2024, it hit an all time high with 12.6 billion dollars in investment
11:08for the mining industry through the Belt and Road Initiative.
11:12So not only has China made the most of its own natural abundance of rare earths and leaned hard
11:17into extracting and processing and making things with it, it's also managed to increasingly tap into
11:24the rest of the world's capacity to produce rare earths as well, sourcing raw materials from Africa,
11:30from Latin America, and from the rest of Asia.
11:32As much as folks would like to reduce interdependence and vulnerabilities, you can't do that at the snap
11:38of a fingers or the signing of a pen. So we're warp speeding our capabilities now at a time when we
11:43should have done it 15 years ago, when China first gave us the wake-up call. This is China's chokehold
11:50on America that the U.S. is desperately trying, but has so far been unable to break.
