Trump claims rare earth win amid complex US-China trade chessboard | Will it be the decisive pawn in upcoming London trade talks?

US President Donald Trump announced on Friday that Chinese President Xi Jinping had agreed to allow rare earth minerals and magnets to flow to the United States, a step that could ease tensions between the world's largest economies.

Asked by a reporter on Air Force One if Xi had consented to do so, Trump responded: “Yes, he did.” However, the Chinese embassy in Washington did not immediately comment on a request.

Trump made the comment a day after making a rare phone call to Xi with the intention of resolving trade tensions that had been building over the issue for weeks.

Trump had said there had been "a very positive conclusion" to the discussions, going on to say that "there should no longer be any questions respecting the complexity of Rare Earth products."

In a further indication of relaxing tensions on the matter, China has issued temporary export licenses to the rare-earth suppliers of the three leading US automakers, two sources close to the issue said.

Top aides to the US president are due to meet their Chinese counterparts in London on Monday for more talks. "We're very far advanced on the China deal," Trump said on Friday.

What are rare earths?

There are 17 types of metals known as rare earths, which are found near the bottom of the periodic table. Most of them are not actually very rare — they are all over the world, though seldom in large enough ore deposits to be mined efficiently.

They are called rare because it is very difficult to separate them from each other. Breaking the chemical bonds that bind them in nature can require more than 100 stages of processing and large quantities of powerful acids.

Why does China control so much of the rare earth supply?

China mines 70 percent of the world’s rare earths. Myanmar, Australia and the United States mine most of the rest. But China does the chemical processing for 90 percent of the world’s rare earths because it refines all of its own ore and also practically all of Myanmar’s and nearly half of US production.

China’s dominance is greatest for seven rare earths that it has mostly stopped exporting since early April: dysprosium, gadolinium, lutetium, samarium, scandium, terbium and yttrium. These are mined almost exclusively in China and Myanmar and are among the hardest to separate chemically. For metals like dysprosium and terbium, so-called heavy rare earths that are used for heat-resistant magnets, China’s refineries produce up to 99.9 percent of the world’s supply.

China has some of the world’s best deposits of heavy rare earths. These are found in a band of ore that is particularly rich in a valley near Longnan in south-central China, extending west into northernmost Myanmar.