A new peer-reviewed study argues that the real choke points in critical minerals—especially rare earths—aren’t mines, but the hard-to-copy steps in the middle of the supply chain. This, of course, is a well-known argument among the Rare Earth Exchanges™ community. By examining standards, permits, and export licensing, the authors of this recent investigation explain why rare earth processing remains so concentrated—and why breaking that dominance is far harder than opening a new mine.
The Study in One Breath
In a January 2026 paper published in Sustainability, lead author Zhandos Kegenbekov (opens in a new tab) of Kazakh-German University, working with Alima Alipova (opens in a new tab) and Ilya Jackson (opens in a new tab) of Massachusetts Institute of Technology, concludes that competitive advantage in critical minerals increasingly resides in midstream capabilities—the standards, permits, qualification regimes, and tacit know-how required to turn raw materials into usable industrial inputs. Their central insight helps explain why rare earth processing—and especially permanent magnet manufacturing—remains so difficult for the U.S. and its allies to replicate at speed.
How the Authors Reached Their Conclusions
This is not a laboratory or econometric study. Instead, the authors conduct a structured conceptual synthesis that combines the resource-based view, dynamic capabilities, and network theory, along with a comparative analysis of policy instruments in the U.S., the EU, and China. They map technologies (EV motors, wind turbines, power electronics, hydrogen systems) to the materials they require—and then identify where bottlenecks actually form.
Their answer: at stages governed by qualification, standards compliance, licensing, and long operating histories, not geology.
What the Paper Reveals About Rare Earth Dominance
The study underscores a familiar but often misunderstood fact: rare earth vulnerability peaks after mining. Converting oxides into metals and then into high-performance magnets requires specialized equipment, process control, and years of customer qualification. The authors cite the widely reported reality that China accounted for roughly 92% of global NdFeB magnet manufacturing in 2020, alongside dominance in separation and metalization, making abrupt “decoupling” economically costly and technologically slow.
Implications—and a Provocative Recommendation
- For investors: Mines alone do not confer resilience. Value accrues where standards, permits, and qualifications lock in customers.
- For policymakers: Rules can function like invisible toll gates—raising switching costs without overt trade barriers.
- The controversial claim: The authors argue for a “cooperation-first” strategy—structured coordination on standards and licensing among major blocs, paired with selective domestic build-out for genuine security needs. It’s pragmatic—but politically fraught.
Limits the Authors Freely Acknowledge
The paper does not estimate causal effects, forecast prices, or test scenarios. Its framework is analytical, not predictive. Whether cooperation is viable under escalating geopolitical tension remains an open question.
Citation: Kegenbekov, Z.; Alipova, A.; Jackson, I. Network-RBV for Critical Minerals: How Standards, Permits, and Licensing Shape Midstream Bottlenecks. Sustainability2026, 18(2), 1084. https://doi.org/10.3390/su18021084 (opens in a new tab)
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