A new level of accumulation of political tension and potential cyberattacks has been forming in the past few months – the issue of rare earth mining. The dispute, mainly between the US and China, could affect the market for electronics, electric vehicles and renewable energy technologies.
The rare earth elements are a group of 17 chemical elements that include 15 so-called lanthanides plus the elements scandium and yttrium. They are needed to make more than 200 products with a wide range of applications, especially high-tech consumer products such as cellular phones, computer hard drives, electric and hybrid vehicles, flat-screen monitors and televisions, solar panels and wind turbines.
Although the amount of REE used in a product is usually a tiny fraction of its weight, the use of the specific material cannot be avoided. For example, magnets made from REEs often represent only a small fraction of the total weight of electronics, but without them the voice coils of desktop computers and laptops could not function.
REEs are also used in defense. They form the basis of electronic displays, guidance systems, various laser and radar and sonar systems.
The main producer and supplier of rare earth elements in the world is China. The country is the source of about 90% of the REEs used in global industry. And that’s a problem now.
Years of tension
The dispute over rare earth elements and China’s role flares up periodically in the arena of world economic and political relations. With the development of the market for electronics, mobile computers and cellular networks, and in the last few years also for RES, rare earth metals are becoming more and more in demand. This puts China in a position of extraordinary power.
On the other hand, the extraction of the specific metals is a process that greatly damages the environment. The so-called developed countries do not want to put their nature at risk. China, on the other hand, is infamous for its poisonous lakes – huge craters (most often old open-pit mines) filled not with water, but with toxic sediments from the processing of ores.
In 2012, China tried to impose REE export quotas on countries that buy from it, saying the measures were aimed at protecting the environment and ensuring supplies. The policy in question has forced the US, Europe and Japan to complain to the World Trade Organization (WTO) that China is deliberately trying to inflate prices for rare earths.
After prolonged disputes in 2014, the WTO came out with a decision that China has no right to impose restrictions on the export of rare earth metals. China appealed this decision, but lost the case.
In the past year and a half, the US has taken a number of steps to reduce its dependence on China for REE imports. A nationwide “vulnerability assessment” of the rare earth supply chain began in early 2021. In June, Joe Biden’s administration released the results of the analysis and declared that there was “overdependence on outside sources and adversary countries for critical minerals and materials” that posed a “threat to national and economic security.”
Earlier this year, the Biden administration secured solid funding for American corporations tasked with developing domestic production of rare earth elements. A special regulation was enacted, the US Defense Production Act (DPA) of 2022, Title III. The act was signed by President Biden “to promote domestic production of rare earth elements and other materials.”
Already cyber attacks
A few days ago, the US government announced that it had detected a large-scale disinformation cyberattack emanating from China targeting domestic rare earth mining in the US. The attack was announced by the Ministry of Defense, citing the results of joint work with the private cyber security firm Mandiant.
According to the announcement, there is a Chinese hacking group called Dragonbridge that targets and “affects the IT systems of mining companies, encourages protests and seeks to disrupt production.” According to Mandiant researchers, China has “crossed the line” with its new online campaign.
The cyberattacks are aimed at maintaining China’s leading position, the state department said in a statement. The registered campaign is a “disinformation program focused on damaging rare earth facilities.”
Dragonbridge is a group cited as “an advocate for the political interests of the People’s Republic of China, working to disrupt REE suppliers and processors outside the country,” the analysis said.
“Dragonbridge is a huge network comprising thousands of profiles across multiple social networks and communication channels,” Mandiant said. After several initial forays into Australia, Dragonbridge has now turned its attention to Canada and the United States, US analysts believe.
“This month, the disinformation group was involved in propaganda activities aimed at smearing the reputation of Canada’s Appia Rare Earths and Uranium Corp., as well as the US-based Rare Earth. Specifically, the group promotes material critical of new mining and production facilities. Appia has discovered a potential mining site in North Saskatchewan in Canada, while US-based Rare Earth intends to build a new facility in Oklahoma later this year.”
“The disinformation network operates thousands of fake accounts on platforms including Facebook and Twitter. “The majority of the content was posted by fake concerned US ‘citizens’, in English,” the US authorities’ analysis added. They note that “the companies targeted by Dragonbridge are large enough to potentially threaten China’s dominant position in the future.”
“Economic disengagement from China will only serve to further victimize Chinese players in the US private sector,” commented John Hultquist, vice president of Mandiant Intelligence. “Unfortunately, business will be on the front lines of a battle that may be too unfair.”