Highlights
- China dominates rare earth processing with over 90% market share due to decades of expertise and lower regulatory constraints.
- Separating rare earth elements is technically challenging, requiring complex multi-stage chemical processes and specialized engineering knowledge.
- Western companies struggle to scale rare earth separation technologies, facing significant technical, regulatory, and expertise barriers.
Separating and refining rare earth elements (REEs) at an industrial scale is far easier said than done. Many companies outside China boast novel separation technologies, but few have demonstrated true large-scale success. In fact, industry observers note an asymmetric knowledge gap: only a handful of seasoned experts in REE separation reside in the U.S. and Europe or Japan for that matter, while China has literally thousands of engineers with decades of experience.
Chinese authorities closely guard this expertise – for example, Beijing now requires rare earth firms to register their technical specialists and even confiscate passports to prevent sensitive know-how from leaking overseas, as we have reported (in fact, it’s been this way long before the trade war launched by President Trump’s second administration). The result is that Western nations face a steep uphill battle in catching up to China’s 90%+ dominance in rare earth processing.
Technical Challenges in Rare Earth Separation
Rare earth elements are chemically very similar to one another, which makes them notoriously difficult to separate. All 15 lanthanides (plus yttrium and scandium) typically occur together in ore and have nearly identical ionic sizes and properties. Traditional separation requires multi-stage chemical processes. The primary industrial method, liquid-liquid solvent extraction, uses banks of mixers and settling tanks to gradually partition each element into separate streams.
This is laborious and complex: a full separation plant may involve hundreds of stages of extraction and stripping cycles to isolate individual REEs. The process also needs strong acids and organic solvents, generating toxic waste that must be handled safely – a major environmental challenge. Stringent environmental regulations in the U.S. and Europe make such processing extremely costly without heavy subsidies. Meanwhile, China has been able to operate large refineries with relatively lower regulatory constraints (albeit with significant pollution), giving it a cost advantage.
From Lab Success to Industrial Scale – A Huge Leap
In the laboratory, scientists have shown it’s possible to separate all the rare earths into small batches. Early REE pioneers used methods like fractional crystallization and ion-exchange chromatography to purify rare earth elements in the mid-20th century. Notably, U.S. researchers at Oak Ridge and Ames Laboratory proved ion-exchange could separate kilogram quantities of high-purity rare earths by the 1950s. However, these ion-exchange (chromatography) techniques are very slow and impractical for high volumes. By the mid-1950s, solvent extraction had been developed at Argonne and Oak Ridge, and it quickly became the standard for all commercial rare earth producers. Solvent extraction could handle large throughputs (albeit with lower single-stage purity), whereas no one has yet proven that chromatography-based processes can be economically scaled up to thousands of tons of ore.
In practice, even today’s producers often employ a hybrid approach: solvent extraction to achieve ~99.9% purity, followed by ion-exchange polishing to achieve ultra-high purities for specialty uses. This underscores a key point: what works in a lab beaker or small pilot often falls apart on scale. Scaling up means addressing issues such as solvent degradation, maintaining precise flow control over months of continuous operation, and ensuring separation efficiency across numerous stages – challenges that only come with hard-earned experience.
Scarce Expertise and “Know-How” Gap
A major barrier to scaling rare earth refining in the West is the shortage of expertise. After decades of offshoring, the technical know-how to run these complex separation processes is in short supply outside China as we have cited.
Rare earth separation is as much an art as a science – tiny tweaks in acidity, flow rates, or reagent ratios can make or break purity yields. Veteran engineers in China have developed a sixth sense for these processes, often learning through years of trial and error. One industry anecdote illustrates this gap: A rare-earth expert visiting a new Western pilot plant reportedly spotted a critical design flaw (an incorrect chemical ratio) within minutes – a mistake the in-house team had overlooked. Such tacit knowledge is difficult to learn from textbooks alone. In fact, even respected reference books can be outdated. For example, the widely cited Extractive Metallurgy of Rare Earths (Gupta, 2004) (opens in a new tab) – often dubbed the “processor’s bible” – is now decades old; as one expert quipped, large portions of its early chapters are half-right, half-wrong, reflecting how much techniques and market realities have evolved. Simply put, book knowledge isn’t enough – engineers need current, hands-on experience, which is something only a few specialists in the U.S., Europe, and Japan possess today (versus the thousands in China).
Moreover, Western startups must recreate an entire ecosystem under far tougher regulations. Building a full supply chain – from mining to separation to metalmaking – requires enormous capital and time.
Rare Earth Exchanges (REEx) points out that U.S. firms face “overwhelming regulatory hurdles that discourage investment and scalability”. Even if money is no object, finding people who know how to design and operate a separation plant is a bottleneck. This knowledge gap is so severe that Chinese firms and institutes guard their experts closely (as noted, China now even restricts overseas travel for key rare-earth technicians). Western companies have begun partnering with a few ex-China experts according to our sources. REEx incorrectly stated that France’s Carester was sourcing Chinese labor.
Unproven Technologies and Bold Claims
In recent years, a number of companies outside China have promoted new technologies they claim will revolutionize rare earth separation. These include advanced solvent extraction tweaks, ion-exchange membranes, precipitation techniques, and chromatography innovations.
A notable example is Ucore Rare Metals (opens in a new tab), which touts its proprietary “RapidSX (opens in a new tab)” process as a game-changer. RapidSX is essentially a column-based, continuous solvent extraction system that Ucore claims can achieve separations 10–20 times faster than conventional methods, with much lower costs. Backed by U.S. Department of Defense funding, Ucore is now scaling RapidSX from pilot to a planned commercial plant in Louisiana. However, skepticism remains. REEx has pointed out that RapidSX, like other novel approaches, has yet to prove itself at full industrial scale. Key questions: Can it run continuously for months without issues? Can it maintain high purity across diverse feedstocks? – are still unanswered, as we have pointed out at REEx.
Similarly, other Western ventures (e.g., Energy Fuels with a “continuous ion exchange” process, or various recycling startups) have demonstrated bench-scale success separating REEs from concentrates or waste magnets, but none have operated a true commercial-scale separation refinery for all 15 lanthanides.
No company outside China has yet produced the full range of separated rare earth oxides at volume, especially the heavy REEs like terbium or dysprosium, which are needed in high-performance magnets. Lynas Rare Earths of Australia, the only significant non-Chinese separator, still relies on conventional solvent extraction and only handles light REEs, and even Lynas had to get substantial Japanese assistance to develop its Malaysian refinery.
The challenge is not just technology, but the integration of process, people, and supply chain. Many announced projects are still in the engineering or demo phase. As REEx observes, Western rare earth ventures often lean heavily on optimistic projections and government grants, yet “the technical expertise required to expand refining capabilities simply does not exist in sufficient supply” domestically. In other words, scaling up is as much a human-capital problem as a technical one.
No Quick or Easy Solution
In summary, separating and refining rare earth elements at scale is hard because of intrinsic technical difficulties and extrinsic knowledge barriers. The elements’ chemical similarity means separation demands painstaking, multi-stage processes using hazardous chemicals. Scaling those processes from lab bench to a factory of continuous flows is a daunting engineering feat – one that China spent decades and billions of dollars to master. Meanwhile, the West must contend with a scarcity of expertise, higher costs, and stricter regulations. Companies like Ucore and others are racing to develop cleaner, faster methods, but until they operate at commercial throughput, their claims remain unproven. As of 2025, no Western effort has yet replicated China’s full-spectrum rare earth refining capacity.
For investors and policymakers, the takeaway is sobering: there are no shortcuts, although the media is peppered with claims. Building a competitive rare earth supply chain will require patient capital, sustained research and development, and likely partnerships to acquire expertise. At least some industrial policy is also necessary.
Recycling and new, disruptive separation technologies could eventually ease the way, but not overnight. In the interim, Western nations face a reality where expertise is as critical a resource as the minerals themselves. Bridging this gap is possible – a handful of determined projects are underway in the U.S. and Europe – but it will take years of rigorous work to prove that rare earth separation can be done economically and at scale outside of China’s shadow.
Sources: Rare Earth Exchanges analysis, Wall Street Journal/Reuters via TrendForce, Encyclopedia Britannica, Oak Ridge National Lab, Ucore Rare Metals releases, Extractive Metallurgy of Rare Earths (Gupta), and others.
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