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It didn’t take China long to play one of its strongest trade cards: rare earth metals.
Those who follow cleantech know that rare earths are essential for a multitude of clean technologies none of which President Trump cares about. However, he does care about cars, weapons, and smartphones, all of which also require rare earths.
China has a strangle-hold on the processing of these metals. They’ve also tied up a good portion of the global supply. Conversely, the U.S. only accounts for about 15% of rare earth production.
This isn’t a new issue. China has spent decades establishing itself as the world’s dominant player in almost every clean technology including the necessary raw materials.
The Inflation Reduction Act attempted to level the playing field. Unfortunately, it was a decade late and may now be neutralized all together. No short-term solution exists to the imbalance, but big tech is working towards at least one longer-term solution.
Microsoft is attempting to augment its supply of various key metals through a pilot hard-drive recycling effort. Apple is further along and has prioritized 15 materials.
In 2024 Apple’s products contained 24% certified recycled content. And 71% of the aluminum Apple uses is from recycled sources. Since 2015, Apple’s aluminum effort has resulted in a 76% reduction of aluminum-related emissions.
Microsoft’s strategy stems more from pragmatism than an environmental focused. The average lifespan of a server is between four and six years meaning keeping data centers current will require a continuous stream of input materials.
To address the exposure to China, Microsoft has teamed up with drive-maker Western Digital and recyclers Critical Materials Recycling and PedalPoint Recycling to develop a blueprint for what it hopes will be a large-scale recycling effort.
Currently the U.S. recycles less than 10% of rare earths. And to date, Microsoft and its partners have only processed 50,000 pounds of old drives. But it’s a start.
Regardless how the current trade war is resolved, the U.S. needs to get out from under China when it comes to rare earths and other key raw materials. Given our late start all options must be explored.
Recycling is a no brainer for myriad reasons. However, ramping that effort will take time, as will any potential increase in mining our own supplies.
China has long cozied up to countries throughout the world that supply key minerals including Argentina, Chile, and Bolivia. The so-called “lithium triangle” accounts for 60 to 70% of the world’s lithium supplies. But China doesn’t have complete control.
The U.S. needs to step up and start cutting deals now. Of course, punishing the world with a poorly thought-out tariff strategy isn’t a particularly good starting point.
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