Highlights

• China dominates rare earth processing with over 90% midstream and downstream control, not due to scarcity but strategic industrial policy.
• Western efforts to break China's rare earth monopoly require more than new processing plants - a comprehensive industrial strategy is essential.
• Geopolitical and economic challenges make rare earth independence a complex issue beyond simple geological availability.

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A recent article published by the Critical Minerals Hub (opens in a new tab) by Amanda van Dyke (opens in a new tab) downplays the urgency of rare earth element (REE) supply chain vulnerability, arguing that “rare earths aren’t rare,” that the West has the technical know-how to build its own processing capacity, and that China’s monopoly can be broken within “2–5 years.” While informative on geology and metallurgy, the piece veers into speculative optimism and underestimates the strategic, economic, and political realities of rare earth dominance in 2025.

Key Arguments by the Author:

1. China’s dominance was voluntary, not inevitable – The West opted out of rare earth refining due to environmental concerns, while China seized the opportunity and built processing capacity.
   • And this seems accurate.
2. Rare earths are geologically abundant – With over 90 million tonnes in global reserves, scarcity isn’t the problem; processing is.
   • True, but often not economical to access.
3. The solution is simple: build processing plants – The article points to 4 Western projects (Australia, Canada, Louisiana, California) as evidence that China’s grip can be broken within a few years.
   • Certainly, this is part of a response.
4. There’s no true “emergency” – Given that major mining firms ignore rare earths due to low returns and geopolitical risk, the author suggests the threat is overstated.
   • This represents one perspective.

Critical Counterpoints: Why This View Understates the Crisis

1. It’s not about geology. It’s about control.

Yes, rare earths are abundant. But China controls over 90% of the midstream (refining) and over 92% of downstream (magnet manufacturing) capacity. This is not a supply issue—it’s a strategic chokehold on value-added production and industrial capability, from EVs to hypersonic weapons.

2. Free-market optimism ignores China’s state-directed strategy.

The author frames the solution as a matter of technological will and capital deployment. But China’s dominance was not just opportunistic—it was state-subsidized, coordinated, and deliberate. Western firms cannot break this monopoly without industrial policy, federal procurement guarantees, and long-term subsidies. A "market-based fix" won't work against a command economy that keeps prices low precisely to prevent competition.

3. “Two- to five-year” timeline is speculative and ignores downstream gaps.

Even if the four cited facilities come online, they only scratch the surface. The U.S. and allies still lack:

• Separation capabilities for heavy REEs (Dysprosium, Terbium),
• Alloying and metallization infrastructure, and
• High-performance permanent magnet manufacturing at scale.

4. China’s new Two Base REE Program raises the stakes.

The article fails to mention Beijing’s strategic initiative to dominate the next wave of rare earth applications—next-gen EV motors, miniaturized electronics, hypersonic flight, and AI-enabled defense platforms. This is not about feedstock. It’s about locking in industrial dominance.

Processing Plants Alone Won’t Save the West

While it’s true that rare earths are geologically abundant and that several Western projects are underway, the article's conclusion—that rare earths pose no real long-term problem—rests on shaky economic and geopolitical assumptions. The U.S. and its allies cannot rely on incremental private investment alone. What’s needed is:

• A COVID Operation Warp Speed type of effort to build vertically integrated rare earth supply chains;
• Direct federal ownership or joint-venture equity in key midstream/downstream assets;
• Strategic tariffs or export controls to protect emerging industries; and
• A commitment to long-term procurement contracts to make Western refining and magnet manufacturing viable.

Failure to act decisively risks cementing China's dominance in every 21st-century strategic industry from semiconductors to defense systems—not because we lack minerals, but because we lack the industrial policy to match China’s.

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