Summary
The Elements of Power explores how our modern high-tech existence relies on a complex and often invisible supply chain of rare metals, such as lithium and indium, found in the deepest corners of the periodic table. David S. Abraham details the geopolitical, environmental, and economic tensions that arise as nations scramble to secure these finite resources, which are essential for everything from smartphones to green energy technologies.
Takeaways
Why Rare Earths Matter
The Eiffel Tower, when built, required 7,000 tonnes of steel. Today, if even a small amount of Niobium is added to the steel alloy, the strength of the steel would be increased enough that only 2,000 tonnes would be needed — a ~71% decrease in raw materials. This is one illustration of a broader pattern: small quantities of rare elements can dramatically change the properties of the materials they touch.
That effect takes different forms depending on the element. Metalloids, for instance, are valuable not for their structural properties but for their electrical ones. Unlike ordinary conductors, they carry electricity only under certain environmental conditions. That is called conditional conductivity. It means they can be engineered to turn on and turn off, which allows them to be programmed. They are, in a basic sense, the physical substrate of computation.
In both cases, the leverage is enormous. The materials are often present in trace quantities, but they are not interchangeable with anything else. That irreplaceability is what makes them strategically significant.
As we become increasingly technological, we will therefore become increasingly dependent on these materials. Traditional economic models are ill-equipped to forecast by how much. Technological progress is itself unpredictable, and demand for its constituent parts inherits that unpredictability. What can be said is that demand will likely outpace most forecasts. AI accelerates this further. Estimating potential material combinations and simulating results is exactly the kind of thing AI is good at, and as new combinations are discovered, demand for the elements needed to produce them will skyrocket.
Why Supply Is Structurally Constrained
Meeting growing demand is not simply a matter of opening more mines. The extraction and processing of rare earths is extraordinarily complex, and the source of that complexity is geological: no two ore deposits share the same mineral composition. Each was formed through a unique sequence of magma flows in the Earth’s mantle, meaning that processes developed for one site cannot simply be copy-pasted to another.
At a high level, extraction involves three steps.
First, concentration: scientists develop a custom acid solution capable of dissolving the target mineral. A unique cocktail that must be reinvented for each new deposit. Once the right blend is found, the target mineral dissolves into the acid like salt in water.
Second, separation: centrifuges and filters remove everything else from the resulting radioactive slurry.
Third, extraction: the acid is evaporated away, leaving behind a greyish powder. This sequence may need to be repeated hundreds of times to achieve a pure concentration.
Even setting aside the complexity of the process itself, there is a further constraint on what can be produced. Minerals must be refined in a prescribed order. Cerium first, then lanthanum, and so on, before reaching the rarer, higher-value elements. There is no way to skip the queue. Combined with the site-specific nature of every operation, this means that the knowledge required to run a given extraction facility is as valuable as the ore itself. They are closely guarded secrets, vary dramatically by region, and cannot be easily transferred. Even if significant deposits were found in North America tomorrow, the ability to extract them at economic scale is not realistic.
Why The Geopolitical Picture Is Dangerous
The current landscape of production is extraordinarily concentrated. China accounts for over 70% of global rare earth production, sometimes approaching 90%. At that level of concentration, a single natural disaster, regulatory shift, or political decision can effectively cut off global supply, sending prices skyrocketing. The reverse is equally true. Deliberate flooding of the market can drive prices down just as fast, destroying producers elsewhere before the tap is turned back off. The asymmetry of that power is what makes the situation genuinely dangerous for North America.
There are three compounding risks to consider.
First, access to these materials can be used as a geopolitical weapon. It is a viable checkmate move in negotiations or conflict.
Second, national businesses migrate into China to secure preferential access and pricing, shifting economic activity and manufacturing capacity over time.
Third, once inside the Chinese market, any technology those businesses carry — often critical to national sovereignty — will be stolen.
Why Good Intentions Make It Worse
Beyond knowledge and talent gap North America faces, our democratic process also creates its own issues. Rare earth processing is a dirty, polluting process, and the industry is rife with human rights violations. We don’t like having it in our borders. The obvious response to this has been to push for ethical sourcing. To refuse materials extracted under exploitative conditions and to pressure producers to meet higher standards. The logic is sound. The effect is not.
ESG movements have successfully suppressed demand for conflict resources from countries like the Congo, which drives down the prices at which those producers sell. This actually advantages the buyers least concerned with ethics, namely Chinese producers, who acquire the same materials at lower cost. With better margins and greater capital to reinvest, they out-compete their ethically focused rivals over time. The moral pressure lands on the wrong party. The result is not a cleaner supply chain but a more concentrated one.
Notes
A Rare Earths Talent Gap Is Growing
AI Will Supercharge Materials Science
Extraction Knowledge, Not Mineral Existence Is The Rare Earth Bottleneck
Faster Material Science Innovation Increases Demand For Rare Earths
Forecasting Rare Earth Demand Is Not Straightforward
In Risky Markets, Leaders Provide The Best Risk-Adjusted Returns
Niobium Reduces The Required Steel For Building The Eiffel Tower
Private Investors Shy Away From Rare Earth Mining
Rare Earth Concentrations And Quality Have Been Diminishing
Rare Earth Element Processing Cannot Be Standardized
Rare Earth Mines Can Take Decades To Reach Production
Rare Earth Refining Cannot Target High Priced Materials
Rare Earth Regulation’s Catch-22
Rare Earth Supply Chains Are Less Diverse Than They Appear
Rare Earth Supply Chains Create Innovation Distortion
Rare Earth Supply Concentration Creates Huge Fragility
Saudi Arabia Can Control The Price of Oil With Not A Lot Of Market Share
The Rapid Demand Increase For Steel In Korea As Incomes Grew
Three Key Concerns With China’s Dominant Position In The Rare Earth Supply Chain