Given China's dominance and significance of REEs in modern electronics and semiconductor industries, export restrictions are being seen as ‘weaponization of trade’ by China.

What are REEs?

• REEs are a set of 17 lustrous, silvery-white, soft heavy metals in periodic table, e.g., Cerium (Ce), Yttrium (Y), Europium (Eu), etc.
  • Though found abundantly in earth, they are difficult to extract as they are not found in concentrated form.
• Application: In Defence (radars), electronics (computers), industrial catalyst, metal alloys and clean energy technologies such as solar panels, wind turbines, etc.

Global Distribution of REEs

• Top Countries (Reserves): China (44 MT), Vietnam, Brazil, Russia and India (6.9 MT).
  • China dominates with more than 2/3rd of global production and controls more than 85% of the global supply chain due to technical capabilities to process and extract REEs.

What can be consequences of China’s export control?

• Disruption of Global Supply Chains: Immediate supply shortages for industries relying on these materials, E.g., Electric vehicles, Electronics etc.
• Impact on Defense Industries: REEs like dysprosium and yttrium are used to make critical components in fighter jets, missiles, drones etc.