Highlights

• Colorado School of Mines' CM3 taxonomy shifts critical minerals strategy from endless lists to bankability analysis, revealing that geology isn't the constraint—market structure, midstream complexity, and offtake risk are.
• Rare earths score poorly on all three CM3 pillars:
  • Opaque pricing versus exchange-traded metals
  • China-dominated separation chains
  • Concentrated magnet buyers create systematic financing barriers
• The commentary provides policymakers a structured intervention map—targeting:
  • Midstream co-investment
  • Offtake guarantees
  • Qualification facilities

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Colorado School of Mines’ Payne Institute (opens in a new tab) has dropped a sharp, investor-facing commentary by Kruthika A. Bala (opens in a new tab) (Resources Now) and Robert J. “RJ” Johnston (opens in a new tab) that cuts through the noise of ever-longer “critical minerals” lists. Instead of asking what materials are strategic, their CM3 (Critical Metals, Minerals, and Materials) taxonomy asks a tougher question: which of these can actually attract private capital without endless subsidies—and why?

Their answer: geology is rarely the constraint. Bankability is shaped by market structure, midstream complexity, and offtake risk—exactly where rare earths and many allied materials are weakest.

From Lists to Ladders: How CM3 Reframes Rare Earth Risk

Bala and Johnston slice bankability into three structural pillars:

• Market size & pricing structure – Exchange-traded metals (copper, aluminum) sit atop the ladder: transparent benchmarks and hedgeable cash flows. Index-priced and bespoke markets (lithium, manganese, graphite, rare earths) slide down the ladder as pricing opacity and spread volatility rise.
• Production pathway – The more complex the refining/separation chain (rare earth separation, lithium conversion, gallium/germanium recovery), the higher the technical risk and capital intensity. Mining is the easy part; midstream is the cliff edge.
• Quality of offtake – Few buyers plus long qualification cycles (scandium, beryllium, graphite anode) mean delayed revenue and brutal financing risk.

For rare earths, this is all painfully familiar: opaque pricing, China-dominated separation, and a concentrated magnet customer base. CM3 doesn’t discover a new problem; it systematizes what REEx readers already know and gives policymakers a structured way to justify midstream and offtake support.

Where the Commentary Shines—and Where It Leans

Rare Earth Exchanges’ POV: Solid Ground

First, the claim that refining and chemical processing—not ore scarcity—are the real bottlenecks is fully aligned with global REE supply-chain data.  Next, the focus on by-product dependence (gallium, germanium, cobalt) accurately reflects why supply doesn’t respond cleanly to price.  Finally, the policy toolbox—price floors, spread insurance, midstream co-investment, public offtake, and shared qualification facilities—is consistent with what we see emerging in Canada, the U.S., the EU, and the G7. However, we suggest that a more extensive industrial policy is necessary for true resilience within a decade.

Reading Between the Lines

The piece is written from a policy–finance vantage point, not a community or ESG lens. Social license and permitting friction are largely offstage.  Moreover, the duo assumes that well-designed financial interventions will unlock supply; the risk that mis-timed subsidies create stranded midstream assets is underplayed.

The taxonomy is diagnostic, not predictive; it doesn’t quantify which REE or midstream projects will actually clear a commercial hurdle rate.

Still, the bias is transparent: this is a Western, institutionally savvy push to move critical-mineral policy “from lists to leverage,” and it largely succeeds in its current aim.

Structural Dimension	Core Driver	Typical Materials	Dominant Risk Type	Bankability Level	Targeted Policy Lever
Market Size & Pricing Structure	Liquidity & price transparency	Copper, Lithium, Graphite	Financial	High to Moderate	Financial tools (hedging support, spread insurance)
Production Pathway	Refining & processing complexity; by-product dependence	Rare earths, Cobalt, Gallium	Technical	Moderate to Low	Midstream co-investment, by-product premiums
Quality of Offtake	Buyer concentration; qualification burden	Scandium, Beryllium, Niobium	Commercial	Low	Public procurement, shared qualification facilities

Source: The Payne Institute for Public Policy

REEx Takeaway: For Rare Earths, CM3 Is a Practical “Where to Intervene” Map

For rare earth investors and policymakers, CM3 is less a revolution than a useful map. It confirms that NdPr and SEG+ projects fail at the midstream and offtake steps, not in the pit, and argues that public capital should target those exact bottlenecks rather than simply minting new “critical” lists.

Done right, that’s good news for projects that can prove technical excellence but struggle with China-centric price signals and buyer concentration. Done badly, it’s another subsidy round chasing structurally unbankable fantasies.

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