At a sprawling industrial complex in the Inner Mongolian city of Baotou, workers feed bag after bag of rare earth additives into roaring furnaces, turning ordinary steel into a high-performance alloy worth twice as much.
This is the front line of a technological leap being powered by China’s dominance in critical minerals and its strategic industrial policy.
The advanced rare earth steel being produced is used in the country’s most ambitious engineering projects – from high-speed railways to wind turbines and the world’s largest hydropower dam being built in Tibet, according to a report in the official Science and Technology Daily.
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But growing demand for rare earths in China’s steel industry – in addition to Beijing’s export controls – has reduced the supply to overseas buyers even further.
China has a stranglehold on rare earths, which are needed for everything from electric cars to electronics and defence technologies. China accounts for about 70 per cent of the world’s rare earth mining and 90 per cent of processing.
In the United States, the defence sector – including the F-35 fighter jet programme, nuclear submarines, missiles and drones – has been grappling with supply chain anxieties fuelled by the shortage of rare earths.