If the mobile industry supply chain isn't stressed enough as it is, here's another problem: rare earths.

The 17 rare earth elements are essential for the manufacture of mobile phones and other electronic goods as well as everything from electric vehicles to medical devices and advanced weaponry.

The immediate problem is the soaring prices.

For example, in the past year the price of lithium carbonate, used in the making of lithium-ion batteries found in mobile phones as well as EV batteries, has risen 150%; praseodymium, critical for magnets used in EVs and wind turbines, is up 74%; terbium oxide, important for LEDs and lasers, is 60% higher.

One reason is the coup in Myanmar, which has disrupted supply from the world's third-largest rare earth exporter.

But it's also because of the spike in demand for hi-tech goods that is causing chip shortages, plus the growing enthusiasm for EVs, which need medium and heavy rare earths such as dysprosium and terbium to power their motors.

In September the Chinese government raised its rare earth quotas by 20% to a record level to increase supply. It was the second time this year it had raised the cap, following a 25% rise in February that was supposedly intended as a positive gesture to the US.

That hasn't eased the price issue but also points up to another problem, which is China's over-sized role in the global market.

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This is no accident. A New York Times investigative report into China's acquisition of swathes of mineral assets in the Democratic Republic of Congo reveals that Chinese state banks provided at least $12 billion in credit to those transactions, and as much as $124 billion to the Chinese mining companies involved.

China dominates global production of rare earth metals and is also the only country with end-to-end capabilities, from mining to processing. It has a share of global mineral output of around 55% and about 85% of the refining capacity.

It might seem that with rare earths China has the same chokehold over the US that the Americans have over China with semiconductor tech, but that is not quite the case. Despite its considerable output, China still cannot supply all its needs, and the US is one of its biggest external suppliers.

But China has showed it is not shy about weaponizing its rare earth dominance. It imposed a 40-day export ban on Japan in 2010 during a dispute over the Senkaku Islands, driving prices sky-high.

No surprise then that rare earths have become another front in US-China rivalry.

The Biden Administration has identified rare earth production as one part of its supply chain vulnerability.

Much of its focus is on the enormous demand for the key rare earth elements used in EVs and other green technologies. One estimate is that the US has to increase its rare earth production tenfold to keep pace with the government's EV goals.

A bill is before congress now to provide tax credits for magnet production for EV engines using rare earths. The Department of Defense recently made a $30 million grant to West Australian-based Lynas, the largest rare earths miner outside China, to help it set up a US plant.

But the complexity and the scale required mean that it will take at least a decade before the US could think about establishing a fully domestic supply chain.

— Robert Clark, contributing editor, special to Light Reading