Last month, in a strange by-product of the Ukraine war, the US and Ukraine signed a deal giving the US access to that country's critical minerals and rare earths. Apparently, President Trump's unusually keen interest in Greenland and Canada also has a rare earth component. Put bluntly, this stuff is needed for a lot of modern tech, and China has cornered the market, which strategically is not a welcome development.

So what are rare earths? Where are they? And can the rest of the world compete with the Chinese? Step into the briefing room and together we'll find out. First, what are these rare earths and minerals? I'm joined by Eli Saklatvala, who's head of non-ferrous metal pricing at Argus, a provider of market intelligence for the global commodity markets. Eli Saklatvala, let's talk about rare earths first. What are they?

So rare earths refers to 17 specific minerals or elements. If you were to look at the periodic table, you'd find them largely grouped together. They comprise the lanthanide series plus yttrium and scandium. So it's a group of elements that are chemically similar in properties.

although they perform a very diverse range of functions. And we also tend to find them geologically grouped together in the ground. And they're used for all sorts of things. They've become quite famous because we can make very strong magnets out of them, which go into electric vehicles and offshore wind turbines. But they also have loads of other uses in electronics, for example, lots of military applications.

and then quite traditional uses like glassmaking and ceramics and so on. So it's a really diverse group of products.

And very quickly, is there any reason why we call them rare earths? Well, they are famously, or famously within the metals industry, not actually rare. You can find quite sizeable rare earth deposits in most continents. They become rare when we actually try to get them out of the ground, process them, refine them and utilise them. Let's talk about critical minerals. When people are talking about critical minerals, what do they mean?

So critical minerals, it's not really an official term, but roughly we're talking about 50 different minerals, of which the rare earths are 17. So rare earths are a subset within the critical minerals group. These minerals, they're called critical because governments around the world consider them absolutely essential to economic and national security. Essentially, we've got a really big problem if we lose access to them.

Let's talk about the rare earths and the critical minerals together. As you say, the rare earths are a subset of critical minerals. Where do we find them mostly? Where would we need to extract them from? Well, rare earths production, and if we're talking about the minerals themselves, China, obviously, huge amount over there. And China supplements its own deposits by importing some ores and concentrates from Myanmar, or

Also Laos in Southeast Asia. China's also been importing some rare earths from the US as well. Australia has a lot in the ground. There's definitely a lot of potential there. Scandinavia, if we're thinking about Europe, has some massive rare earth deposits, but they're not utilised today.

Brazil, and then North America as well. They're always just on the rare earths. If we think critical minerals, we've also got to start thinking about Central Africa, for example, the DRC, major source of things like cobalt. The Democratic Republic of Congo.

That's correct. Major source of things like cobalt and tantalum. Indonesia, really important for nickel and cobalt as well. Russia, still in the mix. If we think about something like titanium, very, very difficult still to unlink Russian titanium from supply chains. So that's where they are. Now let's talk about how that corresponds to how they get used. Is it hard to process...

these minerals and rare earths? In a nutshell, yes. You're talking about high expenditures. Just to get new refining plants, new processing plants built can be very, very costly. A lot of environmental considerations, which also then collides, of course, with red tape. You can get stuck in long queues waiting to develop permits and things like this.

So, yeah, it can be a huge issue across the critical mineral supply chain, developing that processing and refining. And that is why so much of it to this day still happens in China. So how much of the market does China currently command? It really varies depending on the mineral. For gallium, for example, and rare earths, we are talking about, gosh, 80 to 90 percent of global supply globally.

Gallium is increasingly used to create very high-tech compound semiconductors. That's basically like a microchip that you'll find in all sorts of different things. Then you have a bit of a sliding scale. You have some other minerals like rhenium and hafnium where the vast majority of production is outside China, but China really steps in as a major consumer and buyer. I would say if we look at critical minerals as a whole, China is extremely dominant in

So can you take me through possibly a rare earth that takes a lot of processing once you've got it and what you'd have to do to make it into something useful? Okay, so if we think about rare earths, you dig some stuff out of the ground and what

And what you'll usually have in this material that you're holding is a whole combination, a cluster of different rare earth elements that are sort of stuck together. Interwoven in that, you'll also have various impurities. You might also have some radioactive material, which is difficult to handle. And then you've got to go through this process, which we call separation, where you literally have to essentially untangle the rare earth elements from each other because they're so interwoven. And I make that sound fairly simple. It's not.

There are lots of very technical processes for this involving things like acid leaching and so on. It's a really multifaceted process and each bit very expensive.

Am I right in thinking that not only is it expensive, but it can be quite a dirty process? Historically, yes, absolutely. That is, I think, one of the reasons why a lot of Western countries in particular have shied away from doing it sort of on their own ground. We have, to be blunt, allowed China in particular to pick up that environmental footprint, while we have then imported the finished products further down the line. I would say that processes are improving.

There is absolutely a drive within the metallurgical industry to clean up the way things are happening. So environmental standards are going up, but it is definitely still a big challenge.

How important are these substances to the move towards renewable energy? They're absolutely essential in any number of ways. The battery industry has been very high profile in recent years. We make batteries in large part out of critical minerals like lithium, cobalt, manganese, graphite and nickel.

We need those batteries both to put into electric vehicles, but also to underpin the energy grid. We also need to think about how solar panels are made, for example. In order to make a solar panel, you're going to need things like tellurium. Again, a very niche, strange sort of minor metal. It's absolutely essential. So, yeah, critical minerals are absolutely crucial to the energy transition. And that has been one of the driving forces of investment into the mineral space over the past five years. Elisak Latvala.

Now, before we carry on, just a quick reminder that you can subscribe to the Briefing Room podcast by visiting BBC Sounds and you'll get access to the entire back catalogue, which includes the one which asks why special educational needs are costing so much and the very recent one which examines the tensions between India and Pakistan. Back now to minerals and the geopolitics of the industry. Why is China dominant and can the rest of the world compete?

I'm joined by Olivia Lazard, a senior fellow affiliated with the think tank Carnegie Europe and the Berggruen Institute, Henry Sanderson, author of Volt Rush, the Winners and Losers in the Race to Go Green, an associate fellow at the Royal United Services Institute, and Sofia Kalantzakis, Global Distinguished Professor in Environmental Studies and Public Policy at New York University in Abu Dhabi and the author of China and the Geopolitics of Rare Earths.

Henry Sanderson, if I could start with you, let's talk about America and the recently agreed Ukraine minerals deal with the US. What do we know about the mineral deposits in Ukraine and how significant they are? So Ukraine has lots of different minerals, but really has competitive positions in lithium, graphite, titanium, and potentially rare earths. But the problem is,

In the case of rare earths and some of the lithium, these are behind front lines in Russian occupied territories. So we really need to see how any peace deal pans out to see what actually Ukraine is going to be left with.

But also, these assessments of deposits are quite often years old, and we really need to see more investment, more exploration before we actually know how economic they are, what kind of investment is needed. But potentially, Ukraine, it has been in the past, a producer of minerals and other industrial goods, and it could be

again. But at this point in time, it's hard to say exactly what they could produce. Sophia Kalantzakis, do you think there are significant amounts of rare earths in Ukraine that are gettable? I think that we don't know anything.

That's the truth. We know that there are indications that there are minerals here, there, all around Ukraine, especially in areas that are already occupied by Russia. Whatever the case may be, this is a project that will require tremendous financing, very long lead times just to figure out what is actually there.

Olivia Lazada, among people who know about these sorts of things, do they think that the issues of Greenland and Canada also have a mineral deposits element to it? There is no question, essentially, that in the Trump behavior at the moment, we're seeing a new type of behavior on the part of the U.S., which is more akin to imperialistic behaviors than anything that we've seen before.

And that applies indeed to Greenland and to Canada. The critical mineral question is very prevalent in the Greenland question, for sure, potentially as well as in Canada.

Henry, do you agree? Yeah, I agree. I think this is a change in strategy. And essentially, it does hark back to sort of imperial empires. But at its heart, really, is trying to play China at its own game and try and secure supply chains to make the US industrially sufficient. So if there is a future war with China, the US doesn't rely on Chinese supply chains and Chinese critical minerals. And I think...

Trump often hasn't studied the details of which critical minerals, etc., but he just wants to secure resources. So in essence, China doesn't secure them. Sophia, what's your view? Well, I mean, we've been seeing the securitization of critical minerals for quite some time now. This is next level securitization, a very transactional approach. This has been sort of an ongoing strategy. But before, the idea was that

In order to ensure that there are alternate supply chains, that there is access to critical minerals, the previous U.S. administration wanted to create various partnerships with allies and with nations with which it could really work together. This is very different because this is America alone, in a sense, approach without the kinds of

help and the cooperation with traditional American friends and allies. The point that Sophia is making there, Henry, which is that in the past, you'd have looked at this securitization, in other words, the need to secure these things for your own strategic position.

was a matter of dealing on an equal basis with others and drawing them into your orbit, and that this seems to have changed. Yeah, so I think, you know, the way it used to work in the past was countries that are good at mining, Australia, Canada, et cetera, you know, would mine, and the free market would use those minerals. And I think...

What's changed, as was just pointed out, is under Biden, there was this concept of friend-shoring, of bringing in... Friend-shoring. Friend-shoring, which is creating new supply chains that don't involve China, but involve US allies. And the big strength of the US is they have allies and China doesn't have many allies. So this was the concept of Biden. But under Trump, well, we know it's US first, America first.

And so therefore he wants America to secure its own critical minerals, to build its own supply chains, and it doesn't seem to be involving allies. In fact, he's alienating allies, right? So it's a very different approach. But if you're just looking at minerals, the West already has a massive trump card, which is Australia. It's a Western ally. It's a huge mining country. So, you know, it's not as if we lack access to minerals.

Well, I was going to ask, Olivia, about Europe's position in all this before we go on to talk more about China. Europe sees itself as a competitor in these self-same industries, very much so, and therefore needs access to very much the same sorts of minerals.

What's Europe's strategic approach?

to try and create essentially a sort of a group of middle powers, which was originally about trying to reduce risks of over dependencies over China and Russia, but which today may also be a way to de-risk away from the US. That remains to be seen.

Okay, let's talk now directly about China's dominance. We've heard that it dominates the minerals market. But Henry, how did they get there? What did they lever in order to get to the position they've now got? So if you look at minerals, it's really also about China becoming a manufacturing superpower. And China is an extraordinary manufacturing success and it produces minerals.

Not only most of the basic goods we use, but it's also massively moved up the value chain and produces most of the world's electric vehicles, solar panels, wind turbines. So it really started from China's roots as a very poor country opening up in the late 70s, in the 80s.

And really the only thing it could do was get some of the lower ends of these supply chains using its endless supply of cheap labor. And the West and other countries encouraged this. They wanted to offshore to China. And so then when China started to manufacture it,

things for the world, it needed minerals. So then it started to process the minerals, which is a dirty, energy intense industry. And then China found that, well, it was kind of vulnerable to mineral supply chains. So a lot of these companies that processed or produced

went out and tried to secure the minerals rather than paying foreign middlemen, traders or foreign companies. So they went to Africa, to Democratic Republic of Congo. They went to Latin America, to Australia, and they secured and invested in mines. This was twofold. One was a big stockpile.

state-owned push where the government encouraged big companies to go out and secure minerals. But you also had these private companies who were adventurous, fast-moving, who went and also invested in mines. Olivier, how far has the essential political structures of China as well been an advantage in it being able to do these things? We know that over the last 15 years, China has invested over $56 billion in acquiring mining assets across the world. $56 billion? Mm-hmm.

Mining was seen as one of the potential sunk costs, essentially, of Chinese ability to compete within high tech sectors and sort of innovation sectors that are now driving a lot of the tech race around the world.

Sophia, this is very much your area of expertise. How do you see it? I think that China had a clear industrial policy and a strategy and a plan at a time when globalization had made it very easy for the West to believe that the supply chains could be fragmented as long as there was uninterrupted access.

And I think that China realized because of its geography, because it was growing so quickly, because it was rising up the ladder so quickly, and because it knew that once everybody realized how much of a powerhouse and superpower it had become, they might be constricted. So they used the toolbox. They built relations with Africa.

And then later under Xi Jinping, they also created the Belt and Road Initiative, which was meant to reunify Eurasia and Africa and loop in South America in order to be able to ensure that these supply chains would be uninterrupted and unobstructed and working in their interest.

Olivia, can we now move to the question about what the rest of the world is supposed to do or the country certainly that would wish to compete? Where do we start with trying to challenge China's supremacy? It's going to take a long time, but it requires essentially empowering other middle powers, by which I mean essentially any country which is not the United States.

the US, Russia and obviously China, and which is mineral endowed, but which is also very challenged by a number of different things ranging from ecological insecurity or ecological fragility to governance fragility to conflict. So when it comes, for example, to, let's say, lithium and copper, you member states need to invest essentially into the ability of a country like Chile to keep extracting in copper and lithium in responsible manners.

but also to invest in their ability essentially to mitigate the impacts of mining extraction on water resources, on ecological fragmentation. When you look at the maps essentially of key deposits, quality deposits that will constitute the future of extraction, we see that a lot of them are located in fragile countries, but they're also hosting a number of biodiversity hotspots.

of ecosystems that are absolutely key for the fight against climate change, the fight against the collapse of biodiversity, etc., etc. And the more fragile a country is, the less able it is to actually commit to environmental protection and ecological maintenance and responsible mining. Sophia, that creates kind of two thoughts in my mind. The first is...

A country like the United States actually does have its own capacity to mine in its own territory, but for various reasons finds that very difficult to do. So that's number one, and you can maybe address that. And then the second one is that where you find it easier to do, those will tend to be in the more fragile countries, which will then bear the environmental cost of the thing that you want to do. Is that broadly right?

Well, yes, but there's some nuance here, too. I mean, I think in the United States, it's a question of investment and permits. Of course, there are strict regulations.

environmental regulations. I don't know for how long these regulations will continue to be strict because the new government would like to see more mining happening domestically. It's also a question of just because there's something there doesn't mean that it makes economic sense to mine it, apart from the fact that there's a citizen demand to not mine because mining has never really been thought of as a

a business that doesn't raise questions and doesn't have an ecological impact. I agree with Olivia. I mean, this is a huge issue, but I think the European Union, for instance, has a very big opportunity and is already doing that by promoting these more advanced ESG standards. ESG, environmental... Sustainable governance. I think that these standards will help...

at the very least, maintain some of these checks and balances so that these countries that are more vulnerable can do mining in a much more responsible way. And that will be to the advantage of the countries themselves, of course, and it's something they want. Olivia, you wanted to come in. Let's think of different locations in this race to critical minerals as different book chapters.

At the moment, we've heard a lot, for example, about Chile, Peru, Argentina, places that have a long history, essentially, in terms of mining. The same goes for Namibia. The same goes for Kazakhstan. That's where countries, particularly belonging to the OECD, try to sort of focus their efforts when it comes to investing into responsible mining because the general structure of governance is there to favor that kind of mining.

But there are other places that fall through the cracks. So I mentioned, for example, the Central African Republic, which we hear very little about, but which has been essentially one of the playing grounds of Russia and China for some time already, and which indicates that there is a long term view, a long purview to this sort of race towards critical minerals, which will play out, which will have different sequencing.

There is another area, which is indeed, you know, like the cryosphere. We mentioned Greenland. You know, there are like some powers eyeing Antarctica as well. And then obviously there are places like the deep seas, like outer space as well. Right. And so all of these different places are new places.

new chapters, new potential for extraction slash conquest slash, you know, territorial projection of power. Henry, as we've heard, extraction is only one part of this. You've also then got to create the industries and the background for those industries. Am I right in thinking that whatever we're talking about here will take some time?

Yeah, this is the fundamental problem with all this talk about critical minerals. If you open a mine tomorrow in Europe or America, you are shipping those minerals to China. You need to have demand for the minerals. They're useless without being turned into a product. This is a fundamental issue. At the heart of Trump's project is re-industrializing the US. Until you create the demand...

the minerals will be just shipped to China and will actually be helping China. So if we open a mine in Ukraine for lithium, it will go to China. And China will say, great, another mine you've added to the global supply. We need to create the industries of the future. Now, the question is about Trump's agenda is,

Does he actually want to create the industries of the future or does he hark back to an imagined golden age of middle class American auto workers? Because unlike Biden, he's killing a lot of the subsidies for industries of the future like clean energy.

Are you saying that there is a desire there for the critical minerals for security reasons, but that the strategy for actually using these minerals creating the demand has been lost? Yeah, precisely. I think what Biden tried to do was incentivize the demand through tax credits, which is an incredibly powerful tool in the U.S.,

So batteries, factories were built all across the US. That creates demand for minerals by filtering through the supply chain. But Trump has created massive uncertainty around green energy transition. He's talked about reopening coal mines, drill, baby, drill. So if that uncertainty is there, very few people want to invest in processing plants or the battery plants that will actually use energy.

On the other hand, Sophia, you could argue that it might set up a real opportunity for the Europeans. I definitely believe that the Europeans have...

have to continue and they have announced that they will continue along these lines, that they will transition, they will deploy renewables and the electrification of transport for sure. They will also invest in the digitalization of the European economy, participating in AI and all of that.

I think that the picture on what the Trump administration is trying to do regarding critical minerals is still very murky. But we should not underestimate that in the U.S., what is now taking a lot of preeminence is the role of big tech actors, which are themselves also investing into, you know, sort of renewable parks and various forms of electrification, as well as digitalization products and sort of new infrastructure, which is in and of itself driving a lot of the demand.

And let's also not forget that critical minerals and metals are really important for the defense industries. The U.S. is one of the countries where the Department of Defense itself is invested into a number of mining projects, right?

But I would not necessarily yet throw in the towel saying that the demand in the US is dead, right? That's very interesting, Henry, because what has been suggested there is ideally you would have a clear long-term strategy which would encourage all the various demands for the use of these minerals.

and create the supply chain for them and do it over a period of time. And the question mark over countries other than China, frankly, is whether they have the capacity or the will to do that. Well, I do think what you're seeing now from Trump's first term to now is there is, in essence, a long-term policy in the US which regards China. And that's become a consensus long-term policy, which is de-risk or decouple from China. So I do think you have that possibility.

massive motivational factor that is quite constant now in the US. The problem is the Trump administration, they don't believe in clean energy. That's been wrapped up in the politics. It's assumed to be a left-wing thing.

But I do think if the U.S. can maintain that policy of de-risking, decoupling from China and somehow keep other policies intact, then it could, as Olivia said, you know, the demand is there. It's a massive economy, right? It's got minerals demand for data centers, for all sorts of other things. But I think the problem is the U.S., as Trump has put his finger on, has de-industrialized. You need to work out what industries can the U.S. rebuild that will require minerals.

And that's all we have time for. My thanks to Henry Sanderson, Sophia Kalantzakis and Olivia Lazard. We'll be back at the same time next week. Goodbye. You've been listening to The Briefing Room with me, David Aronovich. The producers were Kirsteen Knight, Nathan Gower and Caroline Bailey. The production coordinator was Gemma Ashman. The sound engineer was David Crackles. The editor is Richard Varden. Another edition of this podcast will be along again really soon.