Highlights
- SMM analysis reveals China's strategic control over rare earth smelting and separation capacity
- Global rare earth projects in Australia, Malaysia, and the US aim to diversify supply chains away from Chinese monopoly
- Geopolitical tensions and market strategies shape the ongoing rare earth industry transformation
How about cutting through the ore dust! That’s how Shanghai Metals Market’s (SMM) August 12th analysis (opens in a new tab) frames China’s dominance in rare earths as both a strategic asset and a defensive posture amid U.S.–China rivalry.
Importantly, SMM is privately held. The online media platform raised US$17.6 million in one funding round back in September 2015, according to Tracxn. The investment involved two China-based institutional investors, Greenwoods Investments (opens in a new tab) and Gingko Gofar Group. (opens in a new tab)
Where the Dust Settles
Factually, the article’s core statements—that China controls global smelting and separation capacity, that Lynas in Malaysia began commercial heavy rare earth separation in 2025, that the U.S. backs Mountain Pass and Round Top, and that MP Materials received U.S. Department of Defense equity support—are all consistent with public record and this platform’s reporting. It also correctly identifies South America and Africa as resource-rich but development-challenged, and the EU’s Critical Raw Materials Act setting a 65% import cap is accurately cited.
Where the Core Gets Coated
SMM’s piece is less neutral when it comes to intent and framing. The repeated reference to “de-Sinicization” and “China’s close monitoring” carries an implicitly defensive Chinese perspective, portraying overseas diversification efforts as provocations rather than standard supply chain risk management. Phrases like “safeguard the security of the industry chain and strategic initiative” and “intervention in the pricing mechanism” frame China’s actions as calculated and reactive, yet without acknowledging that price influence and supply monitoring are equally practiced by the West.
While not outright misinformation, it is one-sided—China’s motivations are rationalized, while Western moves are framed as needing “validation” or as reactive to China’s role.
Speculation in the Mix?
The article speculates on outcomes—claiming the U.S.–led “Australian ore – Malaysian processing – US/Japanese application” chain “awaits practical validation” and warning against “over-stimulating the West to accelerate technological breakthroughs.” These are projections, not facts.
Yes, REEx acknowledges China is far ahead of the West, but activity is unfolding fast as we track in a qualitative and quantitatively updated series of rankings.
The SMM piece suggests that China can guide domestic prices “through various means”, and of course, this implies state-managed pricing influence, which indeed has been acknowledged as a reality. Yet the piece does not substantiate such powers. There’s also an assumption that Western projects inherently depend on “validation” from China’s market positioning, which is a perspective rather than an established truth.
Investor Takeaway
For Rare Earth Exchanges (REEx) readers—both retail and institutional—the SMM article offers valuable factual nuggets on project timelines, capacity developments, and geopolitical strategies. But the framing reflects a Chinese industry lens that downplays Western self-sufficiency efforts and normalizes China’s role as a permanent market gatekeeper. Treat it as a data source, not a neutral referee.
Investors should focus on the verified developments—Lynas’ HREE separation capability, U.S. DoD investment in MP, and the EU’s import cap—while recognizing the speculative edges and national bias baked into the narrative.
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