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China Digs It

How Beijing Cornered the Rare Earths Market

Smelting lanthanum in Inner Mongolia. (David Gray / Courtesy Reuters)

In September 2010, after Japan arrested a Chinese fishing boat captain in disputed waters in the East China Sea, Beijing allegedly retaliated by holding back shipments to Tokyo of rare earths, a group of 17 elements used in high-tech products. Arcane names such as cerium, dysprosium, and lanthanum -- elements that populate the bottom of the periodic table and whose unique properties make them ideal materials in the batteries that power iPhones and electric vehicles -- suddenly commanded global attention. It mattered little whether Beijing actually carried through with the threat (reports are murky), the damage was already done: The world had awoken to the fact that overreliance on China for rare-earths supplies could put the international high-tech supply chain at risk. 

Today, China produces more than 90 percent of the global supply of rare earths but sits on just about one-third of the

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