Will Strong U.S. Refining Chain Break China’s Control of Rare Earths?

Highlights

• China controls over 90% of global rare earth magnet production and dominates critical mineral refining.
• U.S. attempts to develop domestic refining capacity, such as MP Materials and ReElement, represent early strategic responses.
• Building comprehensive, vertically integrated rare earth supply chains is essential to challenge China’s mineral industry dominance.

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In an article for Oilprice.com (opens in a new tab), journalist Tsvetana Paraskova presents a sobering and accurate diagnosis of America’s rare earth predicament: China’s stranglehold is not about raw materials, but about its lock on the midstream—refining and magnet production. Drawing on expert opinion and industry data, she rightly emphasizes that mining alone won’t win the critical minerals race. Paraskova’s key premise—that refining, not just extraction, is the true chokepoint—is sound and well-articulated.

Ms. Paraskova outlines how China controls over 90% of global rare earth magnet production and dominates refining for cobalt and lithium as well. She underscores the cost asymmetry (China builds refineries at one-third the U.S. cost), and cites U.S. attempts, such as MP Materials’ ramp-up and modular refining ventures like ReElement, as the beginning of a strategic pivot.

The Gaps?

Yet what’s missing is a deeper interrogation of how the U.S. and its allies can actually overcome China’s vertically integrated dominance. While the article mentions that building refining capacity “will take years and billions,” it glosses over the central need for fully integrated supply chains that span upstream mining, midstream refining and separation, and downstream alloying and component manufacturing, within trusted political and industrial alliances. Absent is any critique of how fragmented U.S. efforts remain, or how fragile most “announced” projects are without guaranteed feedstock, long-term offtake agreements, and export credit support.

There’s no mention of European or Japanese collaboration, nor a call for policy tools beyond market incentives, such as government-backed procurement guarantees, domestic content mandates, or co-investment strategies akin to the CHIPS Act.

Paraskova delivers a solid overview, but what’s urgently needed now is not just recognition of refining’s importance, but from a Rare Earth Exchanges (REEx) perspective, strategic industrial planning to build vertically integrated, resilient rare earth supply chains that match—and eventually outmaneuver—China’s state-backed mineral empire.