Rare earths: Beijing threatens a new front in the trade war

China believes its near-monopoly gives it leverage over the US but supply cuts would spur rival producers

What rare earths are used for ELECTRIC CARS: Powerful rare earths such as neodymium, terbium and dysprosium are used as magnets in electric vehicle motors. Hybrid car batteries also use the rare earth lanthanum. PHOTO: REUTERS, AGENCE FRANCE-PRESSE

BEIJING/LONDON • Nine years ago, Ian Higgins' company in the north-west of England was jolted by bad news from Volkswagen. Prices for rare earths were rising, so Europe's largest carmaker warned it was planning to discontinue use of all rare earth alloys in its magnets.

Mr Higgins braced himself for other clients to take a similar step, threatening his metal alloy maker Less Common Metals if the car industry moved away from the technology. Instead, to his relief, the scare died down.

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A version of this article appeared in the print edition of The Straits Times on June 06, 2019, with the headline 'Rare earths: Beijing threatens a new front in the trade war'. Subscribe