Rare earths give China leverage in the trade war, at a cost

IT LOOKS AT first like a classic Chinese painting: water-soaked paddies nestled against endless green hills. But then the brown begins. Abandoned brown pits on the hilltops. Brown gashes down their sides. Brown sludge in the streams. Ganzhou, until a few years ago, was southern China’s mining country. The damage done in the name of economic growth involves an industry that has given China leverage in its trade war with America. The rocks extracted are rich in rare-earth minerals, used in everything from planes to smartphones. It is a dirty business that China dominates.

Rare earths, covering 17 elements on the periodic table, are in fact common. But China holds two-fifths of global reserves. In 1992 Deng Xiaoping quipped that “the Middle East has oil, China has rare earths.” The chemicals used to extract them from the ore create toxic run-off, and for years China was more willing to bear that cost than other countries. By the early 2000s it accounted for almost all the world’s production. “There were no laws back then and everyone here was digging up the ground,” says Xie Yizhen, a local who worked in mining for 18 years.