Rare earths: what they are, who produces them and why they are key to Trump's peace proposal to Ukraine

The United States is the world's largest economy and the main producer of oil and gas, the fossil fuels that still dominate the planet. But the raw materials of the future are different and are not in the United States but in its great competitor for the leadership of the 21st century, China. The Asian giant is the great producer of the so-called rare earths, a set of 17 chemical elements that are essential in the technological industry, in the arms industry, in renewable energy and also in health. Donald Trump knows this and in the first days of his hectic mandate he has already put the focus on two of the places from which the United States could secure its supply, Greenland and Ukraine, even if that means threatening policies of territorial annexation or even plundering of other people's natural resources.

Control of rare earths is at the heart of Trump's proposal for the pacification of Ukraine. Washington is making its involvement in securing Kiev after the fighting conditional on an agreement to allow the exploitation of its minerals , with US investment. Trump's stated aim is to recoup the military and financial aid provided by the US to Ukraine during the war, which the US president estimates at no less than $500 billion worth of rare earths . The problem is that in Ukraine, although there is evidence of the presence of valuable strategic raw materials, there is no certainty about the availability of rare earths. They are also elements that are difficult to extract and process and very difficult to value.

“Their value depends on availability; there are products that could not be manufactured without rare earths. It is estimated that each inhabitant of the planet consumes around 17 grams of these materials annually,” explains Enrigue Feás, principal investigator at the Elcano Royal Institute. These are minimal amounts, a drop in the ocean compared to the annual consumption of oil or gas, but they are crucial in the daily life of developed economies. For example, yttrium is used to produce low-consumption light bulbs and cancer treatments; neodymium is used in electric car motors, high-power lasers or headphones; gadolinium is the best contrast for magnetic resonance imaging in medicine; lutetium is used in positron emission tomography (PET, key to diagnosing cancer); terbium and yttrium enable the vibrant colours of smartphones and televisions and praseodymium, together with neodymium, also helps turn the wheels of an electric car or the blades of a wind turbine. They are also important in defence: an F-35 fighter contains 400 kilos of rare earths and a nuclear submarine, four tons, explains Feás.

Although their names are not very common, rare earths are used on a daily basis and are more common than one might think. They are not rare because they are scarce, but because they are never found in a pure state. They are always contained within other minerals or mixed together, sometimes in combination with highly toxic elements such as uranium. It is therefore necessary to find them in deposits with a high concentration so that their extraction is profitable, also assuming a high environmental impact of their processing. China, which lacks other basic raw materials such as oil or gas, is its main producer , with 70% of the total, and also dominates the process of refining rare earths for industrial use.

According to data from the United States Geological Survey, China will produce 270,000 metric tons of rare earths in 2024, having doubled its production in the last five years, while the US is in a distant second place with 45,000 tons. The United States has about 1.9 million tons of reserves, although little processing capacity, while the total world reserves are estimated at 120 million tons. The same US Geological Survey has no evidence that Ukraine has rare earth reserves, despite Trump's statements, although it does have many other minerals considered strategic and of obvious value to Washington. In fact, the geopolitical struggle for the raw materials of the future goes beyond rare earths and includes other materials that are equally key to the energy transition or defense, such as lithium, graphite, cobalt or manganese, of which China also stands out as a world producer. Thus, cobalt and lithium are essential for the manufacture of batteries and for electric cars.

“Ukraine has at least 20 of the 30-plus commodities considered strategic, such as lithium, but no rare earths,” says Beatriz Villafranca, an analyst at CaixaBank Research. According to S&P Commodity Insights, Ukraine’s alleged rare earth potential is based on Soviet-era analysis that has not been updated and that ignores the economic viability of extraction. “I am not aware of any significant rare earth assets or reserves in Ukraine. This is just another exaggerated fantasy that we will magically solve our critical mineral constraints through a country at war. The closest analogy for me is the very similar hyperbole about the trillions of dollars of minerals lying beneath Afghanistan,” says Morgan Bazilian, director of the Payne Institute for Public Policy at the Colorado School of Mines, quoted in an article by S&P Commodity Insights.

Beyond rare earths

The concept of rare earths lends itself to deliberate confusion and these types of elements are included in a much broader group, in what are called fundamental and strategic raw materials, which China exports to the entire planet. Thus, and according to data from a report carried out in 2023 by the EU, the Asian giant produces 100% of rare minerals such as ytterbium, yttrium or lutetium but also 67% of graphite, 91% of magnesium or 60% of refined cobalt. And its status as an undisputed world power in the extraction and processing of critical raw materials is also leading Beijing to use this power as an economic weapon against the US.

China already tightened export controls on germanium and gallium in 2023 - both used to make chips although they are not rare earths - and in 2024 banned the shipment of these two minerals to the US, along with antimony. Chinese authorities now plan to restrict mining activity related to rare earths to state companies, a further twist in a sector of high strategic value and in the midst of a trade war unleashed by Trump.

And in Spain? Are there rare earths or strategic raw materials? Our country produces 31% of the world's strontium (used in magnets, alloys and medical material) and is the only European supplier. It is also a large potential producer of rare earths, according to Enrique Feás. An EU investigation in 2017 on the presence of rare earths in Europe identified at least four areas in Spain: in Campo de Montiel (Ciudad Real, where there is monazite with neodymium, lanthanum and cerium), in the Galiñeiro mountain range (Pontevedra), in the Rambla de las Granatillas (Almería) and in the basal complex of Fuerteventura (Las Palmas). In addition, significant proportions of lanthanum and cerium are believed to be present in Domo del Tormes (between Salamanca and Zamora) and three submarine deposits (studied by the Geological and Mining Institute of Spain) in the Gulf of Cadiz, the Galicia Bank and the Trópico Seamount in the Canary Islands.

“Europe abandoned mining in the 1990s. It is a very capital-intensive activity, with a great environmental impact and which does not generate many jobs. Now the EU imports strategic raw materials from China, reducing this dependence would require opening mines,” says Feás. Wherever the new mines are located, the International Energy Agency has already warned that a significant increase in the production of strategic minerals will be necessary by 2030 to meet the decarbonisation objectives. Specifically, 50 new lithium mines, 60 nickel mines and 17 cobalt mines will have to be opened to achieve this.