Highlights
- Rare earth projects are differentiated by their ability to produce oxide forms versus merely shipping raw ore.
- Oxide production provides strategic leverage, higher value, and better geopolitical positioning in the rare earth supply chain.
- Investors should evaluate REE projects based on:
- Oxide separation capabilities
- Processing infrastructure
- Radioactivity management
When evaluating rare earth element (REE) mining ventures, retail and institutional investors alike often focus on headline figures—grade, tonnage, or offtake agreements. But a deeper, more critical question determines whether a project is a true value creator or just speculative dust: Can the project produce and ship rare earth oxides, or is it only capable of shipping raw ore?
This distinction isn’t academic—it’s geopolitical, financial, and environmental.
1. Oxide Production = Value Added + Strategic Leverage
Rare earth oxides (REOs) are the refined forms of REEs, such as neodymium oxide or dysprosium oxide, that go into permanent magnets, EV motors, wind turbines, and defense systems. Projects that reach this stage typically have:
- On-site or nearby separation and hydrometallurgical infrastructure
- Permitting and safety systems for handling radioactive byproducts
- Greater pricing power and control of the supply chain destiny
A project capable of producing oxide in-country—rather than shipping raw ore to China—represents genuine downstream integration, and potentially qualifies for subsidies, military off-take agreements, or strategic investor interest from Western governments.
2. Shipping Ore = Exporting the Problem
Projects that can only ship raw ore often contain monazite or bastnäsite minerals rich in thorium or uranium, which are lightly radioactive. If these elements are not separated and stabilized on-site, then the radioactivity travels with the shipment, making export to Western markets complex, expensive, or outright prohibited.
This means such projects must:
- Export ore to countries willing to accept and process radioactive material
- Operate under strict IAEA and national nuclear regulations
- Face long permitting timelines and insurance risks
For many Western-aligned jurisdictions, this is a non-starter, making ore-only projects effectively reliant on Chinese or Southeast Asian processing partners, undercutting geopolitical and ESG narratives.
3. Investor Red Flags
Before investing in a REE project, ask:
- Does the project have or plan to build oxide separation and refining capacity?
- Where will the ore or oxide be shipped and processed?
- Does the company disclose radioactivity levels in the mineralization?
- What is the project’s capex allocation to hydrometallurgy or ESG compliance?
Investor Summary
| Criteria | Oxide-Capable Project | Ore-Only Project |
|---|---|---|
| Strategic Autonomy | High | Low |
| Market Access | Global | Often China-dependent |
| Permitting Risk | Moderate to High | High (due to radioactive transport) |
| Long-Term Upside | High | Limited by third-party processing |
| ESG/Compliance Complexity | Manageable if Integrated | Elevated risk profile |
Bottom Line
Of course, there is more to all of this, but at a high level, the ability to produce and export rare earth oxides—not just dig and ship ore—is the defining test of whether a rare earth project belongs to the 21st-century supply chain… or is merely feeding someone else’s.
Have questions? Check out the Rare Earth Exchanges Forum (opens in a new tab).
Leave a Reply