The Rare Earth Gamble: Can China’s Coal Reserves Deliver the Next REE Boom?

Highlights

• A new study explores extracting rare earth elements from Chinese coal deposits using advanced geochemical and machine learning techniques.
• China could further strengthen its global rare earth production monopoly by developing coal-derived REE extraction technology.
• Technical and environmental challenges remain significant barriers to the widespread implementation of coal-based rare earth element extraction.

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A new study by Wei Zhu and colleagues from the China University of Mining and Technology investigates the economic viability of extracting rare earth elements and yttrium (REY) from Chinese coal deposits. Using advanced geochemical and machine learning techniques on 888 coal samples from 64 mines, the study identifies two promising regions—the Northern and Southern coal-bearing areas—as having high concentrations of REY. The research suggests that Chinese coal could serve as a secondary source of rare earths, a significant development given the growing demand for REEs in clean energy technologies.

The recent paper reviewed by Rare Earth Exchanges was published in the peer-reviewed journal Renewable and Sustainable Energy Reviews (opens in a new tab).

Yet, the implications of this study go beyond academia. China already dominates global rare earth production, controlling over 70% of supply, and this research hints at an even tighter grip on the market. If economically viable, coal-derived REEs could further entrench China’s monopoly, extending its dominance beyond traditional mining into unconventional sources. This could undermine Western efforts to diversify supply chains through mining in Africa, Australia, or the U.S.

However, there are serious limitations. Extracting REEs from coal remains technically and economically challenging, requiring complex separation processes that drive up costs. Furthermore, the environmental consequences—toxic waste, acid leaching, and carbon emissions from coal burning—directly contradict the push for sustainability. The study also fails to address geopolitical risks, as China could easily weaponize this new resource, leveraging it as a tool in trade wars and diplomatic disputes.

The bottom line? China may have found another ace up its sleeve, but the world should be wary. If Western nations don’t accelerate their own REE extraction and recycling efforts, they could find themselves even more dependent on China—not just for rare earths but for the very materials driving the green energy transition. Assuming, of course, under President Donald Trump, the U.S. does not even consider that trajectory anymore.