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China’s recent decision to restrict exports of rare earth minerals has disrupted global supply chains and imposed an estimated cost of $34 billion per decade on the U.S. economy. The move, which directly impacts the production of semiconductors, optical fibers and batteries, highlights the Asian giant’s strategic dominance over materials essential to modern technology.
China accounts for a staggering 94 percent of the world’s production of gallium and 83 percent of germanium (a rare mineral), two elements crucial to industries such as electronics, telecommunications and renewable energy. With Russia as the only significant competitor in the gallium market, China’s global dependence on other countries makes other countries highly vulnerable to such moves.
The decision is not only strategic, but symbolic. Gallium and germanium are essential for the manufacture of semiconductors, which form the basis of devices such as smartphones and advanced computing systems. Germanium is also used in the production of fiber optic cables and solar cells, while antimony, another material affected by the restriction, is essential for ammunition and electric vehicle batteries.
Billion-dollar impact for the US
According to the US Geological Survey, the restriction could reduce US GDP by $3,4 billion per year. Over a decade, this represents a cumulative loss of $34 billion, compounded by shortages of other strategic materials. This disruption to supply chains is forcing companies to seek alternatives, but the process requires significant investment and can take years.
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As mineral markets expert Nedal Nassar explained, developing new or substitute sources of supply is time-consuming and expensive. Until then, the U.S. and other affected countries will face significant challenges in maintaining their competitiveness in the global marketplace.
Challenges for global industries
China’s export restrictions are adding pressure to industries such as the automotive industry, which is already struggling to transition to electric vehicles. Limited access to graphite, another critical material, is also contributing to higher costs and more complex supply chains.
Tech and automakers will have to rethink production schedules and invest in innovation to reduce reliance on limited materials. Meanwhile, consumers could face higher prices and a possible slowdown in the adoption of new technologies.
The strategic role of the rare mineral
China’s decision highlights how control over the rare earth mineral can profoundly influence markets and geopolitics. For countries like the US, the challenge is not just economic but also strategic: diversifying sources of supply and investing in research to reduce dependence on a single nation.
With an estimated impact in the billions and far-reaching consequences, China's dominance over these essential materials it's a reminder how the global economic balance can change rapidly in the face of strategic decisions.
How wonderful to see this news! The American beasts and their dogs (NATO and UN) thought they could create so many restrictions against China and they would accept it lightly? I can only imagine those animals getting hardened because the Chinese dared not to bend the knee to them and pay them a blowjob.
My friend, I make your words mine, the Americans think they are the best, the Chinese are going to bring the USA to its knees, and also win the biqu€t€.
The Trump era has already started to sink China's ship, congratulations