Highlights

• U.S. and EU companies are developing novel rare earth separation technologies to challenge China's processing dominance.
• Startup firms like Phoenix Tailings and ReElement Technologies propose cleaner, more scalable rare earth extraction methods.
• Experts caution that transitioning away from Chinese rare earth processing is a complex, generational challenge involving technological, economic, and geopolitical hurdles.

A new article by Matt Blois in Chemical & Engineering News (opens in a new tab) (April 22, 2025) offers a comprehensive view of how China’s latest export license rules for heavy rare earths, such as dysprosium and terbium, are reigniting U.S. and EU efforts to reestablish domestic processing capacity. While the report highlights technological innovation and rising investment enthusiasm, it also acknowledges a steep and complex climb ahead for Western producers.

Blois spotlights companies like Phoenix Tailings (opens in a new tab), ReElement Technologies (opens in a new tab), and Rivalia Chemical (opens in a new tab), which are leveraging novel separation and metallization techniques, ranging from molten salt electrolysis to chromatography and ionic liquids. These startups claim to offer cleaner, more scalable alternatives to China’s traditional solvent extraction method.

However, expert analysts like David Merriman (Project Blue) and Tim Rose (Rovjok) urge caution, noting that scaling unproven technologies may add time and risk to an already fragile supply chain transition.

The article rightly identifies the central challenge: China's rare earth supremacy is not just due to mining dominance, but decades of perfected, cost-effective midstream processing and tightly guarded technology. Government-backed efforts in the West, including Trump’s March executive order fast-tracking mining permits and the EU’s project funding initiatives, are critical steps—but Blois’s sources agree this is a generational undertaking, not a short-term fix.

Still, the article underplays one key factor: global capital hesitancy. Many investors, while intrigued, remain skeptical of the regulatory, environmental, and geopolitical risks that plague rare earth ventures. Furthermore, Blois assumes a linear transition path from innovation to market acceptance, overlooking how entrenched Chinese pricing power and export retaliation mechanisms, as seen with MP Materials’ halted sales to China, may distort global market dynamics. The rare earth race is clearly underway, but Western producers are still running uphill, and it’s a steep one.