Plotting Rare Earth Independence from China – Are we Underestimating the Investment Required?

Highlights

• MP Materials leads U.S. efforts to challenge China’s dominance in rare earth oxide production for critical technologies.
• Oak Ridge National Laboratory develops a potentially groundbreaking extraction process with reduced environmental impact.
• Significant challenges remain in achieving full rare earth supply chain independence from China.

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Glenn Zorpette, writing in IEEE Spectrum, (opens in a new tab) explores the rare earth industry through the lens of MP Materials, a major U.S. producer of rare earth oxides used in critical technologies like electric vehicles (EVs), wind turbines, and military equipment. It highlights the challenges of diversifying the rare earth supply chain, which is dominated by China, and introduces innovative efforts, such as a new extraction process from Oak Ridge National Laboratory that could significantly reduce environmental impact and costs. While Mojave Desert-based MP Materials and other global players are expanding their operations, the article underscores the difficulty of developing self-sufficient rare earth production and processing capabilities in Western countries.

The article’s author assumes that technological advancements like the Oak Ridge process can level the playing field against China’s entrenched dominance. It also assumes that government and private investment will be sufficient to overcome the substantial barriers to market entry, including high costs, environmental regulations, and technical complexities.  What is the true extent of the investment the Chinese government has made in that nation’s rare earth complex?

Zorpette does not sufficiently delve into the potential geopolitical risks, such as retaliatory measures by China and insufficient discussion of the economic feasibility of scaling new technologies. The author also does not address the timeline or practical challenges of implementing innovations like the Oak Ridge process on a commercial scale.  Rare Earth Exchanges suggests in a best-case scenario, the U.S. for full independence from China is a handful of years away.

Questions remain about how quickly Western countries can build competitive rare earth processing infrastructure, the long-term sustainability of these efforts in the face of Chinese competition, and the environmental trade-offs of scaling up domestic production. These uncertainties highlight the complexity of achieving rare earth supply chain independence.