The South Pacific Promise-and the Chokepoints That Decide Everything

Highlights

• China controls 60% of rare earth mining and 90% of processing.
• The South Pacific's mineral resources alone won't solve U.S. supply chain vulnerabilities without corresponding downstream capacity.
• Seabed mining remains unproven at scale with environmental and capital challenges.
• The real choke point lies in separation, refining, and magnet manufacturing—still overwhelmingly concentrated in China.
• Strategic resilience depends on mine-to-magnet pathways among allies.
• Partnerships like Noveon-Lynas, MP Materials' hub model, and emerging players from ReElement to USA Rare Earth are building non-Chinese processing hubs.

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A recent commentary (opens in a new tab) by Allen Zhang and Miles Pollard, affiliated with The Heritage Foundation and published in The National Interest, argues that U.S. critical-mineral security increasingly depends on the South Pacific—pointing to Australia’s rare earths, Pacific Island seabed resources, and partnerships such as those with the Cook Islands. For a lay reader, the logic is intuitive: China dominates rare earths, the Pacific has minerals, and Washington must move faster to secure alternatives.

That diagnosis is directionally right—but incomplete in ways investors and policymakers should not gloss over.

Where the Authors Are Solid

The authors accurately describe China’s structural leverage. Beijing controls roughly 60% of global rare earth mining and close to 90% of processing—numbers that continue to translate directly into industrial and defense risk. They are also correct that Australia remains the most credible allied anchor in the supply chain, anchored by Lynas Rare Earths, the only major producer of separated heavy rare earths outside China.

Likewise, Washington’s recent executive actions and bilateral mineral frameworks reflect a genuine shift from rhetorical concern to strategic intent. Supply-chain diversification is no longer theoretical.

Where the Argument Drifts

The commentary leans heavily on seabed mining as a strategic answer. Here, optimism clearly outruns execution. Polymetallic nodules are geologically real—but commercial deep-sea mining remains unproven at scale, environmentally contested, capital-intensive, and subject to slow permitting. These are not secondary hurdles; they are binding constraints that push meaningful output well beyond near-term planning horizons.

More critically, the piece underweights the true choke point: downstream processing and magnet manufacturing. Minerals—whether on land or the seabed—do not confer security on their own. Separation, refining, alloying, and permanent magnet production remain overwhelmingly concentrated in China.

What the Article Misses—but Matters Most

The most strategically important question is not where minerals are sourced, but who controls the conversion. Examples such as Noveon Magnetics partnering (opens in a new tab) with Lynas Rare Earths illustrate what actually reduces risk: mine-to-magnet pathways among trusted allies.

For that matter, the networks MP Materials will build to become an ex-China powerhouse. It will not necessarily be one company, but a hub and spoke model of some sort.  National resilience presupposes MP Materials' success and other success stories.

Mid-market moves from ReElement Technologies with a network of partners (e.g., Pensana upstream,) including downstream heavily financed upstart Vulcan Elements, are yet another example, along with the magnet makers ramping up in the USA (Permag, Noveon, Arnold Magnetic Technologies, Vacuumschmelze), plus players like Aclara Resources connecting South American mines with North American magnet makers.  Nascent midstream players are also key, such as Energy Fuels and Phoenix Tailings. Of course, quite a big bet has been placed by the federal government and private investors on the USA Rare Earth mine-to-magnet value chain.  Recycled circular economy won’t produce the majority of output, but it’ll be a factor—from ReElement to Mkango and others targeting circular capability.

Without sustained investment in non-Chinese processing hubs and magnet plants, Pacific Island resources risk becoming another upstream story feeding the same downstream bottleneck.

The REEx Verdict

The South Pacific is strategically relevant—but not sufficient. Geography helps. Geology helps. Only downstream execution breaks the leverage. Until the U.S. and allies scale processing and magnet capacity outside China, seabed riches and diplomatic frameworks remain necessary—but far from decisive.

Source: Zhang & Pollard, originally published in The National Interest.