The technology-driven modern living – from smart phones to smart homes – has revolutionized every aspect of our life. Rare earth is the primal matter for manufacturing these hi-tech items, from smartphones and electric vehicles to drones and missiles. Why is the world chasing the rare earth? It has unique attributes. Once purified, they can be processed into oxides, phosphors, metals, alloys and magnets having unique electrochemical properties and  are of strong and lightweight and used as a raw material in the manufacture of valuable high-tech products.
 China is the world’s dominant producer of rare earth. To supplement its huge   trade tailwinds in these items, it imports the minerals from abroad, primarily from Myanmar, Malaysia and Vietnam. Imports accounted for 47,000 tons, or about a quarter, of China’s rare-earth market in 2020. Importantly, it has upped its production quota for rare-earth metals by close to 30% for the first half of this year to reach a production target of 84,000 tons, a major jump.
That is only a part of the unfolding game. China has recently introduced new regulations on their production and export amid growing tensions with the U.S. This has to be seen against the context of evolving geopolitical developments and its impact on trading patterns. There is a huge shortage of many items that go into the production of electronic items, particularly semi-conductors in the world as reports emerge from countries like the US, the UK and India. This may continue since China will have an upper hand in managing or manipulating the supply side of these products.
Let us look at some of the revealing numbers. China produces almost 60% of the world’s rare earth, processes, and refines around 80%. It supplies 80% of rare earth imports of the USA and 98% of the EU. Indian imports are also quite substantial and most of them are used for manufacture of electronic goods valued at US$ 200 billion or so. This overwhelming dominance of China has got the leading countries worried. Any disruptions to the supply of the commodity can harm their economies as seen last year when a short supply of rare earths hit many sectors across the globe. For instance indium and gallium, are vital for the production of semiconductors, which are considered the backbone of high-tech industries.
Further, China’s tendency to use supply of rare earth as a trump card to intimidate the USA has made all importing nations keen to look for new sources of production. It may be recalled that China used this against the US in 2019 with regard to the controversial issue on Huawei. There are reports about Chinese interests in minerals including rare earth in Afghanistan.
This global quest for an alternate source for rare earth offers a tremendous opportunity for Africa to emerge as a production base. The continent is rich in numerous rare earth deposits. African countries like South Africa, Madagascar, Malawi, Kenya, Namibia, Mozambique, Tanzania, Zambia and Burundi are home to several types of rare earth. A few African countries have started moving in this direction with new extraction projects. The Gakara Rare Earth Project in Burundi has gone on stream. Some more projects are in different stages in Namibia, Malawi, Angola, Tanzania, Uganda Madagascar, Mozambique, Nigeria and South Africa.
Despite the huge potential, Africa has a long journey ahead to emerge as a significant producer of rare earth. The projects encounter challenges such as high investment costs, market laws, political underpinnings, environmental, and social issues, and so on.
 Developed countries  like the US, Europe, Japan, etc are determined to minimize their dependence on China for the supply of the rare earth and are scouting for  strategic partnerships with Africa and countries in other regions like India, which has the fifth largest rare earth deposits in the world,  for sourcing alternate supplies. Interestingly, China,  is far ahead of other economies in the race for rare earth in Africa. It is also deepening its presence in Africa to guarantee supplies to meet its rising domestic demand.
The situation undoubtedly offers economic gains for both Africa and the leading economies. To reap the benefit, the continent has to have a decisive political will to develop the sector through appropriate industrial policy and incentives. At the same time, the importing economies will have to offer an attractive package to African nations to  motivate them into partnership. For instance, a country like India can barter some of the rare earth that is found in the country, such as Ilmenite Rutile Zircon Garnet Sillimanite Lanthanum carbonate Cerium(III) carbonate Ndpr Oxalate Thorium(IV) nitrate Trisodium phosphate, etc for raw materials that it needs for its growing electronics industry. There can be many other ways of sourcing such products to ensure a balanced global trade in rare earths since a skewed global trade pattern will adversely affect most of the countries.
