The Silicon Supremacy

In the grand theatre of global politics and economics, certain commodities have always played starring roles. Crude oil, with its petrodollars and OPEC cartels, has dictated the fortunes of nations for a century. Gold and diamonds have fuelled empires and conflicts. But in the 21st century, a new, far more obscure class of materials has ascended to this elite stage, not with the brute force of energy but with the subtle, pervasive power of technology. These are the rare earth elements (REEs), 17 metallic elements whose unique magnetic and electrochemical properties are the silent, indispensable enablers of our modern world.

A recent, seemingly mundane news item offers a profound window into this new reality. In early 2024, as Chinese Foreign Minister Wang Yi prepared for a visit to India, Beijing announced the lifting of export bans on a range of goods, including fertilisers, tunnel-boring machines, and, most significantly, rare earths. On the surface, this was a routine diplomatic gesture, a de-escalatory move ahead of high-level talks. But to the trained eye, it was a masterclass in geopolitical signalling, a demonstration of a form of power that is as nuanced as the elements themselves. This act was not about granting access to a luxury; it was about temporarily easing a stranglehold on a critical necessity.

To understand why this move was so significant, one must first grasp what rare earths are and why they are so vital. Despite their name, they are not particularly rare in terms of geological abundance. Their challenge lies in their chemistry. They are almost never found in concentrated, economically viable deposits and are fiendishly difficult and environmentally hazardous to separate from the ores in which they reside. This complex extraction and processing pipeline is where China’s dominance is not just pronounced; it is near-total.

For decades, the West offshored this dirty, difficult work. China, with different cost calculations and regulatory environments, embraced it. Today, it controls over 80 per cent of the world’s rare earth refining capacity and a significant portion of its mining. This dominance means that every major technological and green industry on the planet is, to some degree, tethered to Chinese policy.

The device you are reading this on — if at all — is a testament to their irreplaceability. Neodymium and praseodymium form the incredibly powerful miniaturised magnets that vibrate your phone, power its tiny speaker, and enable its hard drive (if it has one). Europium and terbium provide the vibrant red and green phosphors in its screen. Yttrium is crucial for its camera lens. Beyond consumer electronics, they are the bedrock of the green energy transition. Permanent magnets made from neodymium are what make modern wind turbine generators efficient and viable. They are essential in the motors of virtually every electric and hybrid vehicle, giving them their power and range.

The military-industrial complex is utterly dependent on them. Precision-guided munitions, satellite communications, sonar systems, radar displays, jet engines, and stealth technology all require rare earth magnets and alloys for their functionality. A nation cannot build a 21st-century fighting force without a secure supply of these materials. This confluence of civilian and military criticality elevates rare earths from a mere trade commodity to a strategic asset of the highest order.

This brings us back to the diplomatic manoeuvre of lifting the export ban. China’s control over rare earths is not a passive fact; it is an active instrument of statecraft. The 2010 incident, when China abruptly slashed rare earth exports during a territorial dispute with Japan, sending global markets into a panic and forcing Tokyo to capitulate, was a stark wake-up call to the world. It demonstrated that rare earths could be a tool of coercion, a non-kinetic weapon in geopolitical disputes.

In the context of India, the message embedded in the recent news is multifaceted. India itself possesses significant rare earth deposits, particularly in coastal sands. However, like much of the world, it lacks the sophisticated and environmentally compliant processing infrastructure to turn ore into usable material. By imposing and then lifting a ban, China performs a delicate dance. It reminds New Delhi of its vulnerability—its burgeoning tech and green industries, and even its defence modernisation, could be hamstrung by a supply cutoff. Simultaneously, by lifting the ban as a diplomatic courtesy, it offers a carrot, a gesture of goodwill that suggests a stable and cooperative relationship is possible. It is a demonstration of power through the granting of access, not just the denial of it.

This "rare earth diplomacy" is a potent form of leverage precisely because it operates below the threshold of traditional conflict. It is not a naval blockade or a sanctions regime that would trigger an international response. It is a regulatory delay, an export quota, a customs inspection, or a suddenly imposed environmental audit on a processing facility—all plausible, deniable actions that can create debilitating bottlenecks for adversaries while maintaining a veneer of domestic policy prerogative.

The world is not blind to this vulnerability. The episode reported by WION is precisely the kind of event that galvanizes efforts to break the monopoly. The United States, through its Department of Defense, is actively funding projects to restart and secure domestic rare earth supply chains, from mining to magnet production. Australia, with rich deposits, is racing to build its own processing facilities. Japan, scarred by the 2010 experience, has invested heavily in recycling technologies and seeks to diversify its sources.

The challenge, however, is Herculean. Building a mine is a decade-long endeavour fraught with environmental opposition and regulatory hurdles. Establishing a separation plant is a capital-intensive chemical engineering nightmare. China’s head start, economies of scale, and control of the entire value chain create a formidable moat. Furthermore, China is not standing still; it continues to consolidate its own state-owned enterprises in the sector, invest in higher-value downstream products like permanent magnets, and secure mining rights in Africa and elsewhere, extending its influence further up and down the global supply web.

The story of rare earths is, therefore, a defining narrative of our era. It is a story about the hidden material foundations of our digital and green utopias. It is about how environmental choices in one part of the world can create strategic dependencies for all. It demonstrates that in a globalised world, economic interdependence can be a source of vulnerability as much as a cause for cooperation.

The brief news item about China lifting a ban is a single frame in a much longer film. It reveals a world where diplomacy is increasingly conducted not just with words and treaties, but with control over the very elements that make modern life possible. The silken thread of rare earth supply, as delicate and powerful as a spider’s web, now binds together international relations, technological progress, and national security.

The great power competition of the 21st century will not be fought only in the cyber domain or the South China Sea; it will be fought in remote mines, in complex chemical separation plants, and in the boardrooms of companies seeking to secure the magnetic heart of their future technologies. As nations scramble to build resilient alternatives, the goal is no longer just autonomy from Chinese supply; it is autonomy for a future where technology—and thus power—is built on a foundation that cannot be switched off by a regulatory change in a single capital. The age of rare earths is here, and with it, there is a new, more intricate, and more fragile chapter in global geopolitics.

The writer is PhD Research Scholar, School of International Relations & Strategic Studies, Jadavpur University, Kolkata. Views expressed are personal