Highlights
- China’s Baogang Group is rapidly expanding rare earth production and processing capabilities through massive technological and capacity upgrades.
- The company’s initiatives threaten Western rare earth independence by consolidating China’s control over 60% of global production and 85% of global refining.
- U.S. and allied nations face a closing window to develop independent rare earth supply chains.
- There is an urgent need to counter China’s strategic mineral dominance.
Baogang Group, China’s state-backed rare earth giant, is aggressively ramping up project construction at its subsidiary, China Northern Rare Earth (CNRE)—one of the world’s most dominant rare earth producers. The company has launched a “sprint from the start” initiative in 2025, pushing forward multiple large-scale projects aimed at capacity expansion, process automation, green production, and advanced technological integration. This full-throttle approach signals a strategic move to further entrench China’s dominance in the global rare earth supply chain, leaving the U.S. and its allies with dwindling time to secure alternative sources.
Strengthening China’s Rare Earth Control
Baogang and CNRE have initiated a series of projects that will solidify China’s control over the full spectrum of rare earth mining, processing, and advanced materials. Key initiatives include:
| Expansion Project | Summary |
|---|---|
| Green Refining Mega-Project | Touted as the world’s largest and most advanced rare earth separation project, this upgrade integrates cutting-edge technologies to enhance efficiency and environmental compliance. The first phase, completed in October 2024, reinforces China’s grip on the critical first step in rare earth supply chains—refining and separation. |
| 8000-Ton Rare Earth Metal Production Expansion | This project boosts production with China’s most advanced electrolysis technology, lowering costs and maximizing resource utilization. The second phase, launched in February 2025, ensures greater output of high-purity metals essential for defense, EVs, and high-tech industries. |
| Automated Rare Earth Processing and Recycling | CNRE is rolling out a fully automated 3000-ton rare earth concentrate separation line and a 2000-ton neodymium-iron-boron (NdFeB) recycling facility. These investments are pivotal in creating a “North-South” integrated rare earth utilization system, tightening China’s supply control while making its industry more self-sufficient. |
What does this mean for USA and the West?
Baogang’s rapid expansion underscores a deliberate and well-coordinated strategy to fortify China’s monopoly on rare earths.
The West faces mounting challenges:
Beijing Tightens Its Grip on Global SupplyWith China already producing over 60% of the world’s rare earths and refining more than 85%, these projects further consolidate its dominance. The West remains dangerously dependent on Chinese processing capacity, leaving the U.S. vulnerable to export restrictions or geopolitical leverage.
Price War and Western Industry SqueezeCNRE’s investment in cost-cutting and efficiency upgrades will allow China to undercut Western competitors. Suppose the U.S. and its allies do not accelerate domestic rare earth refining and processing efforts. In that case, they risk being priced out of the market—making it financially unviable to build independent supply chains.
China’s Move into Recycling and Sustainability
By expanding rare earth recycling, China is addressing long-term supply security, reducing reliance on raw mining while dominating the closed-loop production cycle. The U.S. and Europe, still in early-stage rare earth recycling initiatives, will struggle to catch up.
A Closing Window for U.S. Action
Baogang Group’s latest expansion is not just about business—it’s a geopolitical statement. While the West debates policy frameworks and incremental investments in rare earth mining, China is executing full-spectrum supply chain control at breakneck speed, according to their media release. Propaganda? Certainly, some for sure, but Rare Earth Exchanges tracks this company from multiple vantages, and they very much appear energized for forthcoming battles.
For the U.S. to counteract Beijing’s strategic rare earth dominance, immediate action is required: accelerated investment in domestic processing, aggressive partnerships with allied suppliers, and a comprehensive industrial policy that prioritizes rare earth independence. If Western policymakers and industries do not act decisively, they may soon find themselves permanently sidelined in the critical minerals race.
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