Highlights

• China currently dominates rare earth processing.
• U.S. and allied investments are rapidly developing competitive alternatives.
• Industrial policy is crucial for building resilient and strategic mineral supply chains.
• This is especially important in critical sectors like rare earth minerals.
• Investors should focus on emerging supply chain developments.
• It's important not to focus solely on current market dominance in the rare earth sector.

The South China Morning Post (SCMP), citing a Strategy Risks report, declares it bluntly: China still rules the rare earth world, and America’s playing catch-up. It’s a familiar refrain—and not without merit. Beijing’s decades of top-down planning, subsidy-fueled expansion, and lockstep control from mine to magnet have delivered real leverage. But as any savvy investor knows, the scoreboard isn’t the whole story—it’s the momentum that matters.

Yes, China holds the crown in rare earth processing, and yes, Washington’s past negligence created this vulnerability. But SCMP skips the rest of the chessboard. U.S. and allied investments—from Round Top to Lynas Texas, from DoD magnet programs to EXIM-backed processing deals and companies like MP Materials (mine to magnet)—are finally moving off the drawing board and into the ground. The claim that America lacks sufficient raw materials is simply false. What we’ve lacked is will. That’s changing.

So here’s the investor takeaway: Don’t confuse dominance with inevitability. China’s edge is real, but it’s being contested—from India’s magnet base to EU battery-grade supply chains. Smart capital will track not just who owns the minerals today, but who’s mastering the value chain tomorrow.

But more is certainly needed.

Industrial policy isn’t the enemy of markets—it’s their foundation when national security, supply chain resilience, and strategic innovation are at stake. In sectors like rare earths, where a single authoritarian power controls the upstream and downstream, relying on laissez-faire alone is a recipe for perpetual dependence. Thoughtful, targeted industrial policy creates the conditions for competitive markets to thrive by de-risking early-stage investment, building infrastructure, and ensuring that private capital can flow where it’s needed most. In this new era of geopolitical minerals, industrial strategy isn’t distortion—it’s defense.

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