Highlights

• China's rare earth dominance extends beyond mining, involving sophisticated refining, processing, and manufacturing capabilities across the entire supply chain.
• Ukraine lacks the necessary infrastructure and current geopolitical stability to meaningfully challenge China's critical mineral monopoly.
• The U.S. must develop a fully integrated domestic and allied supply chain, investing in separation, processing, manufacturing, and strategic international partnerships.

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A new opinion piece published by Forbes on May 2, 2025, titled “The Ukraine Mineral Deal Might Help The U.S. Break China’s Monopoly (opens in a new tab)” is the latest in a series of well-meaning but fundamentally flawed narratives that continue to mislead the public and policymakers alike. While any diplomatic effort to stabilize Ukraine or diversify U.S. critical mineral sources is welcome, suggesting that Ukraine’s upstream resource base could substantially reduce U.S. reliance on China reveals a deep misunderstanding of the geopolitical and industrial complexity of the global rare earth and critical mineral supply chain.

To put it bluntly here at Rare Earth Exchanges (REEx).  China’s dominance in rare earths and critical minerals is not just about digging up and separating rare earth metals. It’s about what happens after those metals are mined. And no, Ukraine cannot fix that.

The Fallacy of the “Dig It and Done” Mentality

What Forbes and similar commentators often miss is that upstream mineral access, while necessary, is not sufficient. China’s leverage over global supply chains stems not just from mineral extraction but from decades of systematic investment across the entire value chain: mining (upstream), refining (midstream), and manufacturing of value-added products like magnets, batteries, and components (downstream). Beijing didn’t stumble into this dominance—it engineered it and now focuses on Two Rare Earth Base China. The next level of advancement transitions into innovation in production across sectors.  Think BYD’s growth is an accident?   China is executing a long-game plan and has entered the second phase. Successful completion of this phase means the USA will pass. So journalists must get the reality on the ground.

Back to Ukraine and the real needs.  Toda,y Ukraine today has:

• No scalable refining infrastructure for rare earths or battery minerals
• No active downstream magnet or battery-grade manufacturing base
• No known large-scale production of separated rare earth oxides or metals
• And, critically, many of its promising deposits lie in war zones or under Russian control

Even the Forbes article admits that up to 40% of Ukraine’s mineral wealth is located in currently occupied territories, and that geological data is outdated and extraction could take “several years” to even begin. These are glaring structural challenges—not stepping stones to liberation from Chinese control.

China’s Real Monopoly—Specialized Separation, Refining, Midstream Muscle to Value-Added Production

Here’s what rarely makes headlines but defines market power:

• China refines 90% of the world’s rare earths into usable oxides and metals.
• China produces over 90% of rare earth magnets, including neodymium-iron-boron (NdFeB) types critical for EVs, wind turbines, and defense systems.
• China dominates battery precursor chemicals, from lithium hydroxide to cobalt sulfate.
• China’s Two Rare Earth Base policy means focus on research  and development to leverage monopoly across sectors

Ukraine may have the ore. But the U.S. needs separation facilities, chemical processing, metallization plants, alloy production, and magnet manufacturing—not just promises of distant access to rocks buried under geopolitical rubble.

To break China’s chokehold, the U.S. must build a fully integrated, domestic and allied supply chain, encompassing upstream, midstream, and downstream capabilities.

That means long-term investments in:

• Rare earth separation plants (like those beginning to emerge in Texas and Australia)
• Metal-making and alloying capacity
• Magnet manufacturing clusters in the U.S., EU, and Indo-Pacific
• Circular economy solutions like recycling and magnet recovery
• And most of all, coordinated industrial policy tying together mining, processing, R&D, and procurement.

That’s the real formula. Ukraine isn’t part of it—at least not yet.

Geopolitical Misdirection and Media Complicity

The problem is not just bad analysis—it’s public misdirection. Media narratives that focus on new mining deals as silver bullets risk giving U.S. officials and investors a false sense of security.

We’ve seen this before: hyped announcements from Africa, Latin America, or Central Asia that fizzle out because they ignore basic facts:

• Mining without processing is just dirt-moving
• Processing without downstream demand is unbankable
• Security and infrastructure matter more than resource size

Ukraine checks none of those boxes today.

America Needs Strategic Integration—Not Symbolism

The U.S.–Ukraine mineral deal may be diplomatically valuable as a gesture of solidarity or wartime economic planning, but it does nothing today to reduce our dependence on China’s rare earth supply. Worse, it diverts attention from more urgent tasks:

• De-risking existing rare earth and battery projects in the U.S. and allied nations
• Fast-tracking domestic refining capacity
• Building a strategic magnet manufacturing base
• Supporting demand-side procurement from industries like EVs, defense, and clean energy

China’s dominance was built over 30 years. It will not be broken with a single deal, nor by outsourcing our future to unstable regions with no midstream base.

A Call for Industrial Realism

What’s needed now is not romanticism about resource nationalism, but industrial realism in the context of international cooperation.

REEx suggests that the U.S. must grow an ecosystem that can compete on every level—geology, chemistry, engineering, logistics, and manufacturing—not just sign another MOU to secure "priority access."  This will require more than just the country itself; it will also require a network of committed partners.

Investors, journalists, and policymakers must stop confusing geopolitical symbolism with strategic progress. The only way to break China’s monopoly is to envision a real alternative, incentivize market forces with government support, and outbuild it—layer by layer, factory by factory. And that begins at home and among enduring friends.