In August 2023, Mongolian Prime Minister Oyun Erden visited the United States and signed a major rare earth cooperation agreement with the United States. As the world's leading mineral country, Mongolia has rich mineral resources, of which rare earth reserves account for 16% of the world's total. Rare earth is a general term for a variety of metal elements with small content, which are widely used in semiconductors, new energy and other fields, and have become a popular variety in today's mineral industry.
As a country with relatively scarce rare earth resources, the United States has always relied on China's rare earth imports. However, China is also faced with the limitation of rare earth resources**, so it has decided to adjust its export policy for rare earths. This adjustment has allowed Mongolia to see business opportunities and hope to reap more benefits by exporting its rare earths through cooperation with the United States. However, while negotiating rare earth cooperation with the United States, Mongolia also made a request to China, which caused some controversy.
In the process of negotiating rare earth cooperation with the United States, Mongolia made a request to China, that is, it hoped to use China to carry out the transportation of rare earths. Since Mongolia is a landlocked country and does not have a direct sea port, they hope to be able to transport rare earths through Chinese ports and then export them to other countries.
The reason this requirement is considered outrageous is that Mongolia is ostensibly competing with China for the rare earth market, but it also wants to use China to transport rare earths. This was seen by some netizens as an unfair use of China by Mongolia. However, according to international law and norms, all countries should respect the freedom of transit of landlocked countries, and China, as a responsible major country, will naturally abide by this norm and will not refuse Mongolia's request for passage.
China has always been recognized as a major rare earth country and plays an important role in the global rare earth industry. China's rare earth reserves account for 34% of the world's total reserves and more than 70% of the world's total production. At the same time, China also has a complete rare earth processing chain, with the capacity to process at least 85% of the world's rare earth ores.
The U.S. has long relied on China's rare earth imports, but in recent years the U.S. has been trying to minimize its dependence on Chinese rare earths. Therefore, the United States approached Mongolia for cooperation, hoping to reduce its dependence on Chinese rare earths.
However, it remains to be seen whether Mongolia's rare earth cooperation with the United States will be successful. Although Mongolia has rare earth resources, it has not carried out large-scale rare earth mining and processing due to the lack of a complete rare earth processing chain. At the same time, China has accumulated rich experience in rare earth mining and processing, and has mature technology and equipment.
As a result, Mongolia has limited influence on China's position in the rare earth industry. Even if Mongolia successfully mines rare earths and exports them to other countries, China is still the leading country in the global rare earth market. The competitive advantage of China's rare earth industry still exists, and its leading position in rare earth processing and technology application is difficult to shake.
However, Mongolia's cooperation with the United States could have some impact on China's rare earth industry. If Mongolia can make a breakthrough in the rare earth processing chain and succeed in cooperating with the United States, it may form some competitive pressure on China's rare earth processing industry. China's rare earth industry may need to continue to upgrade its technology and strengthen its innovation capabilities to maintain its competitive advantage in the global rare earth market.
In short, Mongolia has abundant rare earth resources, but its impact on the status of China's rare earth industry is limited. China's rare earth industry is still the dominant force in the global rare earth market, but in the face of cooperation between Mongolia and the United States, China needs to continue to improve its technology level and strengthen its innovation capabilities to maintain its competitive advantage.