According to geologists, rare earths are precious elements that naturally occur on Earth. Comprising 17 elements such as europium, cerium, lanthanum, lutetium, and erbium among others, these are used extensively in the production of consumer electronics and defense equipment. Rare earth elements were first discovered and used in the United States, however, production gradually shifted to China where there were lower labor costs, generous state subsidies and less concern for environmental impacts. Gradually, China began to account for over 90% of the world’s mining and refinement of rare earth elements. In 1997, Magniquench, an American rare earths company, was sold to an investment consortium headed by Archibald Cox, Jr., with two Chinese state-owned metals firms, San Huan New Materials and China National Nonferrous Metals Import and Export Company. The chairman of San Huan, son-in-law of paramount leader Deng Xiaoping, became chairman of the company. Magniquench was shut down in the United States, moved to China, and reopened in 2003, where it fit in well with Deng’s Super 863 Program to acquire cutting-edge technologies for military applications, including “exotic materials.”
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