Fact Check: Trade in Rare Earths Likely to Remain Constrained Despite New Agreements
What We Know
The claim that "trade in rare earths likely to remain constrained despite new agreements" suggests that recent agreements or developments in the rare earths market will not significantly alleviate existing trade limitations. Rare earth elements (REEs) are critical for various technologies, including electronics, renewable energy systems, and military applications.
Recent reports indicate that the global demand for rare earths is increasing, driven by the transition to green technologies and the growing electric vehicle market. For instance, the International Energy Agency (IEA) has noted that the demand for rare earths could increase significantly as countries strive to meet climate goals (source-1).
Furthermore, geopolitical tensions, particularly between the U.S. and China, have led to concerns about supply chain vulnerabilities. China dominates the global supply of rare earths, accounting for approximately 60% of production and over 80% of processing capacity (source-2). This concentration raises the risk of trade disruptions, which could keep the market constrained despite new agreements aimed at diversifying supply sources.
Analysis
The assertion that trade in rare earths will remain constrained is supported by several factors. First, while new agreements may facilitate some level of trade, the underlying issues of supply chain dependency and geopolitical tensions remain unresolved. For example, the U.S. has been working to establish partnerships with countries like Australia and Canada to create a more resilient supply chain (source-3). However, these efforts are still in their early stages and may not yield immediate results.
Moreover, the production of rare earths is not only about extraction but also involves complex processing, which is currently dominated by China. The lack of processing facilities outside China means that even if other countries increase their mining activities, they may still rely on Chinese processing capabilities, thereby limiting the effectiveness of any new agreements (source-4).
Additionally, environmental concerns related to rare earth mining and processing could further complicate efforts to ramp up production in other regions. Many countries are hesitant to expand mining operations due to the potential environmental impact, which could lead to regulatory hurdles and public opposition (source-5).
Conclusion
Verdict: False. The claim that trade in rare earths is likely to remain constrained despite new agreements is supported by the evidence of ongoing geopolitical tensions, supply chain vulnerabilities, and environmental concerns. While new agreements may provide some opportunities for trade, they do not address the fundamental issues that contribute to the constraints in the rare earths market.
