Highlights
- China controls nearly 90% of global refined rare earth supply, maintaining strategic leverage over critical mineral markets.
- Western recycling efforts are currently marginal, contributing less than 5% of the global rare earth magnet market.
- Reshoring rare earth processing faces significant geopolitical, permitting, and infrastructure challenges.
A recent CNBC (opens in a new tab) article highlights the West’s growing investment in rare earth element (REE) recycling as a hedge against China’s overwhelming control of the global supply chain. While the coverage acknowledges some significant moves by Western governments and companies, it understates the central reality: the importance of recycling. However, essential for long-term supply resilience, it currently accounts for less than 5% of the global rare earth magnet market. The West is not yet even close to breaking China’s grip.
According to Rare Earth Exchanges’ analysis, China’s dominance extends beyond mining. It spans nearly 90% of global refined supply for magnet-critical rare earths—neodymium (Nd), praseodymium (Pr), dysprosium (Dy), and terbium (Tb)—and this refined capacity is what counts. Despite new investments in startups like Rare Earth Salts and localized R&D efforts by automakers such as Toyota, these efforts remain in their infancy. They are overshadowed by China’s established infrastructure and export capabilities.
A Trickle of Progress, But No Torrent Yet
Yes, the U.S. Department of Defense recently invested $4.2 million in recycling technologies to extract oxides from legacy waste streams like fluorescent bulbs. Yes, Toyota and European automakers are experimenting with motor designs that use fewer rare earth elements. And yes, the first generation of EVs will soon become a secondary resource for rare earths. However, as REEx has consistently reported, these initiatives are playing catch-up in a system still dominated by and serving Chinese interests.
Recycling remains a low-throughput, energy-intensive, and chemically complex process. While it can offset supply bottlenecks in specific use cases (e.g., defense, medical, aerospace), it is no replacement for primary mining and refining capacity. The scale of rare earth demand—particularly for EVs, wind turbines, and military systems—means that any real dent requires not marginal gains, but multi-billion-dollar infrastructure and policy alignment across multiple nations.
Trade Wars, Export Controls, and the Real Stakes
As noted in the CNBC report, China recently tightened export controls on terbium and other magnet elements. This follows previous restrictions on gallium, germanium, antimony, and tungsten—moves that form part of a broad strategy by Beijing to weaponize its critical mineral supply dominance in response to escalating U.S.-China tensions.
This is not hypothetical. China’s new export rules force magnet producers to apply for case-by-case export licenses, giving the Chinese Communist Party direct leverage over who gets REEs—and who doesn’t. While a handful of Chinese firms reportedly received limited licenses to ship to North America and Europe this May, the message is clear: access to these materials is conditional and strategic.
National Security and Strategic Blind Spots
The article correctly notes that each F-35 fighter jet contains over 900 pounds of rare earths—a vivid illustration of how deep U.S. defense dependencies run. But the idea that recycling will offer near-term relief is misleading. Defense-grade rare earth elements (REEs) require ultra-pure, certified, and high-reliability supply chains. Scrap reclamation and urban mining—still lacking standardization and scale—cannot yet meet these thresholds.
Moreover, the CNBC piece downplays the enormous permitting, financing, and geopolitical challenges involved in reshoring rare earth processing. Western refining plants take 5–10 years to come online, face local resistance, and require significant subsidies to compete with state-supported Chinese counterparts.
Don’t Confuse Progress With Parity
Recycling is not a silver bullet. It is a necessary, long-term complement to primary mining, processing, and allied industrial strategy. But for now, it’s a marginal activity in a market dominated by a single geopolitical actor. Without coordinated government intervention, vertically integrated domestic supply chains, and accelerated public-private investment, the West will remain reliant on China’s goodwill for the most strategic materials of the 21st century.
The rare earth problem is not being solved—it’s only being delayed.
About Rare Earth Exchanges
Rare Earth Exchanges (REEx) delivers investor-focused news, analysis, and data on global rare earth markets, technologies, and geopolitical supply chain risks. REEx is developing a suite of tools to help the retail investor navigate rare earth element and critical mineral supply chains, upstream, midstream, and downstream. Based in the United States, REEx serves retail and institutional investors, industry professionals, and policy leaders shaping the future of critical minerals. See discussions on various topics at the REEx Forum (opens in a new tab).
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