Challenges Facing Rare Earth Processing in Western Nations

The Rare Earth Mistake the U.S. Can’t Repeat I’ve been reading about the rare earth mineral situation—and it’s a fascinating case study in how a country can fail gradually, even when the warning lights are flashing for decades. Rare earths are critical inputs for everything from smartphones and EVs to missile guidance systems and wind turbines. Yet over time, the U.S. allowed its supply chain to hollow out—ceding control not just of mining, but of the real chokepoints: processing, separation, and magnet production. In 1990, the U.S. produced a third of the world’s rare earths. Today, China controls more than 80% of refining and magnet capacity. There’s a lot wrapped up in this story: Free trade vs. strategic resilience — For years, advocates of free trade waved off concerns. Markets would adapt, substitutes would emerge, rare earths weren’t really rare. But market incentives don’t account for geopolitical leverage. China made long-term bets; U.S. policy leaned on short-term price signals. One country built dominance. The other built excuses. “You can’t build anything in this country” — The rare earths saga proves what the abundance movement has been warning: even urgent, strategic projects get stuck in a thicket of permitting delays, lawsuits, and regulatory gridlock. It’s not that the U.S. lacks the resources—it’s that we’ve made them nearly impossible to use. Manufacturers optimized themselves into fragility — U.S. firms pursued lowest-cost sourcing, even for critical components. There were no strategic buffers, no onshoring plans, no resilience thinking. Supply chains weren’t just lean—they were brittle by design. Decades of drift and delay — This isn’t a partisan failure. Warnings about rare earth dependence go back to the 1980s. But year after year, administration after administration, the issue was deferred. Only when China tightened exports and the risk became undeniable did serious investment begin—in the 2020s, nearly forty years too late. It’s a story of ideological blind spots, institutional inertia, and the steep cost of ignoring strategic vulnerabilities. And it’s a cautionary tale. As the U.S. rebuilds its industrial base—for semiconductors, clean energy, AI hardware, and defense—rare earths should be treated not as a one-off oversight but as a vivid manual in what not to do. #economy #China #trade

We must rapidly shift Rare Earth minerals policy and execution Much of the “China owns rare earths” narrative is fiction. China’s dominance isn’t technological. Actually it’s environmental legislation arbitrage. We can rebuild rare-earth processing fast if policy and industry align. What to build: • Hydrometallurgical lines: acid leaching → solvent extraction → calcination. • We already make TBP, D2EHPA, PC88A, and Cyanex. The chemistry isn’t the bottleneck. • The challenge is coordination, capital, and permitting. Where: Gulf Coast (US), Western Australia, Poland are diversified, industrially ready. Shortcuts: Retool phosphate fertilizer plants …they already do acid leaching and can be retrofitted to process monazite for REE extraction. With a coordinated push, the West could replace 30% of China’s RE refining within months and 70% within a year and if we clear the red tape and fast-track permits. This isn’t a Manhattan Project Next step: Don’t rebuild China’s dirty model. Build Industry 2.0 with lean, automated, low-emission, circular, powered by renewables and recycling. We don’t need China. We need execution.

RE-SHORING HEAVY RARE EARTH ELEMENT (HREE) Processing to North America. The US and our allies face a critical vulnerability: near-total dependence on PRC for the supply and processing of rare earth elements (REE) particularly the heavy REEs essential to defense, energy, and technology. Rare earths are a group of 17 elements, including HREEs like dysprosium, terbium, gadolinium, and lutetium. These elements are indispensable for permanent magnets used in electric motors, jet engines, missile systems, nuclear shielding, armor-piercing rounds, quantum computing, telecoms, and advanced sensors. As of 2024, China controls roughly 63% of global rare earth mining production, 85–90% of rare earth oxide refining, and over 92% of metal and magnet production. The U.S. currently mines some light rare earths at Mountain Pass, California—but still ships much of that concentrate to China for processing. That is a strategic bottleneck, exposing our entire industrial and defense base to geopolitical coercion. To solve this, we must bring the whole HREE process—from mineral extraction to bright metal—home to North America. Why Canada? Because key parts of the the Defense Production Act (DPA), and related laws, define Canada as “domestic.” That includes building capacity across essential steps: Extraction: North American HREE deposits exist in Round Top, Texas (USA Rare Earth), Bear Lodge, Wyoming, and Saskatchewan, Canada (Vital Metals), containing ion-adsorption clays, monazite, and xenotime. Sustainable methods like in-situ recovery and ammonium recycling can prevent export of unprocessed ore. Separation and Refinement: After mining, REEs must undergo solvent extraction (SX)—a multistage chemical process. North America must build modular, automated SX plants near mine sites to process key elements like dysprosium and terbium. Metallization and Alloying: Separated REE oxides are reduced to metal using vacuum-sealed processes with calcium or lanthanum, then refined by distillation. This step needs urgent investment; Ames Lab and others are already advancing pilot-scale efforts. Radioactive Byproducts: Monazite and xenotime ores contain thorium-232 and uranium-238. While China accepts the environmental cost, North America has avoided it—yet Saskatchewan’s SRC proves we can safely manage and reuse these materials for energy and strategic purposes. Heavy rare earths are essential—not optional—for national defense, powering F-35 actuators, hypersonic missile controls, nuclear submarine propulsion, and the magnets in EVs and wind turbines. Without secure access, our industrial base, energy transition, and technological edge are at risk. To fix this, we need coordinated federal and private action—leveraging Title III, the Defense Production Act, and allied cooperation with Canada on cross-border resource corridors. A mine-to-metal industrial buildout is critical, along with adopting Canada’s model for turning radioactive byproducts into strategic assets.

AMERICAN - CRITICAL MINERALS & MINING - THE MISSING LINK IN AMERICA’S CRITICAL MINERALS PUSH ISN’T MINING – IT’S PROCESSING EXPERTISE - The United States is spending billions of dollars to secure access to critical minerals – minerals and metals that are essential to modern technology, from electric vehicles to smartphones and military systems. - But amid the push to dig more, one question gets far too little attention: Who will actually process what comes out of the ground? - Between mining and the finished product lies a complex chain of separation, refining and advanced manufacturing. Since the 1990s, however, the United States has lost much of its critical mineral processing capacity. - Rebuilding domestic mineral supply chains will depend not only on resource availability and funding, but also on whether the U.S. can rebuild the technical expertise and industrial systems required to process those materials on a large scale. - NOTE: In recent years, as much as 90% of the rare earth minerals extracted in the United States and allied countries have been shipped to China for processing. In 2024, the U.S. relied on imports for about 80% of its rare earth compounds and metals. - Industry projections estimate that the mining workforce will need to grow significantly in the coming years to meet rising demand. Specialized skills in areas such as rare earth separation, metallurgical testing and environmental systems design require years of training and practical experience. And while mining can produce high-paying jobs, the industry also has a reputation for environmental damage and hazardous conditions. The real bottleneck - America’s critical minerals strategy is often discussed in terms of geology and geopolitics – where resources are located and who has access to them. But supply chains depend on people and systems. That’s America’s real bottleneck in creating a domestic supply chain. - A successful domestic supply chain will require workers who know how to separate neodymium from praseodymium, operate solvent extraction circuits and maintain hydrometallurgical plants within regulatory standards. These are highly specialized skills that take years to develop. - The United States has significant mineral resources and growing policy support. Now, it needs to pay attention to the workforce and industrial capacity needed to transform those resources into usable materials. - https://lnkd.in/etHf5pvQ

As the world increasingly relies on rare earth elements (REEs) for clean energy and technological advancements, it's crucial to recognize that while there are ample reserves of these critical metals outside of China, the real bottleneck lies in refining capabilities—not in mining. Countries around the world hold vast reserves of rare earths: - China: 44 million metric tons (MT) – Leading in both reserves and refining capacity. - Vietnam: 22 million MT – Significant reserves but limited production and refining. - Brazil: 21 million MT – Third-largest reserves globally but minimal output. - Russia: 10 million MT – Moderate reserves with potential for growth. - India: 6.9 million MT – Significant reserves, with ongoing policy development. - Australia: 5.7 million MT – Major producer with expanding refining capabilities. - United States: 1.8 million MT – Strong production but limited refining infrastructure. - Greenland: 1.5 million MT – High potential but yet to fully exploit resources. Despite these vast reserves, mining alone is not the solution. The real challenge lies in refining these resources into usable materials. China’s dominance is not just about having the largest reserves or highest production; it's about controlling the majority of the world's refining capacity. Refining rare earth elements is particularly challenging due to outdated technology that currently dominates the industry. This technology is horribly toxic to the environment and poses significant health risks to workers. It is also extremely costly to operate, making it a less attractive investment for countries looking to ramp up their refining capabilities. Without advancements in refining technology, countries with large reserves, like Brazil and Vietnam, struggle to make a meaningful impact on the global REE supply chain. Simply put, mining more isn’t enough. To truly harness the potential of these reserves and reduce dependency on China, nations must invest in cleaner, more efficient refining technologies. As the U.S. and other countries work to secure their supply chains, the focus should be on building the infrastructure needed to refine rare earth elements in a way that is both economically viable and environmentally responsible. Only then can these reserves be fully utilized to support the global transition to clean energy and advanced technologies.

Excellent read on the progress we've made in #rareearths extraction, thanks to federal funding and a burgeoning #EV market that has created crucial demand signals for developers and investors. However, we now find ourselves with a much more complicated challenge in midstream processing and magnet #manufacturing, where China maintains a stranglehold on global production. From the article: "So, not surprisingly, almost all of those 146 big rare earth projects are mining ventures, not processing ones, and they’ll do very little to diversify the rare earth supply. 'It’s important that we have a more diverse supply chain, outside of China, and a bigger one,' agrees Rosenthal. 'But the industry is poorly served by the amount of hype and unjustifiable press regarding resources (exploratory mine sites) that are not well understood. What we really need more of is processing capabilities, from all parts of the supply chain.' A new rare earth mine, Rosenthal points out, does nothing to increase the geographical diversity of supply if its output must go to China to be processed into rare earth oxides." --------------------- While I can appreciate the work of various trade groups and other industry stakeholders to promote domestic extraction, there's still a significant gap in our policy discourse about what it will take to support the downstream value chain against Chinese market manipulation and secure our industrial #supplychains. Permitting reforms can get a mine online a bit faster, but are mostly irrelevant for a metal-making or magnet manufacturing facility sited in an industrial park. Those stages in the value chain require continued R&D investments, as well as some foreign protections, which is why we imposed 25% tariffs on #rareearthmagnets earlier this year. But they also require strong demand growth, and nearly the entire projected global demand growth through 2030 comes from #electricvehicles and #offshorewind turbines. The industry demand picture matters as much as any supply side support. The defense industrial base simply does not consume sufficient volumes to support project economics of mining, processing, or magnet manufacturing. What America needs for its domestic security is a pittance compared to what the #automotive sector needs for #EV motors, or what #energy companies seek to use for offshore wind generation. I'll repeat what I said in recent posts on graphite, gallium, germanium, and antimony...the policy discourse needs to evolve toward addressing market fundamentals. And fast. #REEs #magnets #critical #cleanenergy #renewables https://lnkd.in/eZvAYGWG

Many of my connections come from oil & gas, energy, and industrial sectors—industries that understand the complexities of supply chains and market dynamics. However, I believe the critical minerals industry has done itself a disservice by not clearly explaining why scaling U.S. supply chains isn’t as simple as ‘fixing permitting’ (though that remains essential). A recent Wall Street Journal article (https://lnkd.in/gwrJkp93) does an excellent job of outlining how China dominates the rare earth supply chain. But I wanted to take a deeper look—why is this problem so hard to fix, and what can actually be done about it? 📌 The Reality: Mining alone won’t solve the problem. The U.S. is creating orphan projects—mines that either can’t secure financing or get built only to remain dependent on Chinese processing and opaque pricing. 📌 The Economics: China’s monopoly isn’t just about supply—it’s about market control. With subsidized operations, opaque pricing, and the ability to undercut competitors, China has locked in its dominance. 📌 The Missing Piece: Even if the U.S. builds processing facilities, who buys the materials? Without binding offtake agreements, these plants risk being economically unviable. 📌 The Solution: We don’t just need mining. We need demand-side policy, price floors, strategic partnerships, and domestic downstream industries to create a market outside of China’s grip. I break all of this down in my latest article, linked below. This isn’t just about rare earths—it’s about all critical minerals. The same dynamics apply to lithium, nickel, graphite, and beyond. If we’re serious about securing these supply chains, we need to think beyond extraction. Would love to hear thoughts from those in oil & gas, mining, manufacturing, and policy—how do we break this cycle? #RareEarths #CriticalMinerals #EnergySecurity #Mining #SupplyChain #Manufacturing #Policy #IndustrialStrategy

The EU has a lot of big ambitions, for its industry, for its economic sovereignty, for defence and for the green transition. But none of those ambitions will be realised without securing reliable supplies of the #criticalrawmaterials that are vital for the technologies the future will be built around. Right now, the EU remains dependent on foreign supplies. For example, China provides 97 % of the EU’s magnesium (used in hydrogen-generating electrolysers) and Türkiye provides 99 % of the EU’s boron (used in solar panels). This poses a challenge for the EU’s strategic autonomy and highlights the need to increase domestic production and use resources more efficiently. In recent years, the EU has taken a number of steps to increase the security of supply of critical materials, including the adoption of the Action Plan on Critical Raw Materials and #CriticalRawMaterialsAct. European Court of Auditors Special Report “04/2026: Critical raw materials for the energy transition” examines the results of these efforts. We found a number of issues - although the Critical Raw Materials Act sets a strategic course, its targets lack justification and underlying data is not robust. Efforts to diversify imports have yet to produce tangible results and bottlenecks hamper progress in domestic production and recycling. While strategic projects can benefit from faster permitting and more visibility, many projects will struggle to secure supply for the EU by 2030. Read the report here: https://lnkd.in/dD7mbN3D One Highlight: Trade distortions and geopolitical challenges reduce the EU’s access to critical raw materials In April 2025, China placed seven rare earth elements on an export control list, making them subject to export licenses and therefore slowing exports. These materials play a key role in the manufacture of permanent magnets (i.e. magnets that do not rely on any external field or current), which are used in wind turbines and many other industrial sectors. The Commission engaged in bilateral contact with the Chinese authorities from the outset. In June 2025, the Commission created a portal to allow the manufacturing industry to submit information on the status of the export licence application process. If cases are urgent, the Commission then passes on this information to the Chinese authorities for fast-track treatment. However, the European Chamber of Commerce in China reported that, based on the information from 22 European companies between August and early September 2025, Chinese authorities had only approved 19 out of 141 licence applications, with 121 “urgent” applications still pending. By December 2025, the EU had not filed a complaint at the WTO.

The International Energy Agency (IEA) just published a landmark report on rare earth supply chains, and its key findings are every bit as alarming as I’ve been warning. The report says demand for magnet rare earths has doubled since 2015 and will grow another 30% by 2030. Outside China, current and announced projects will cover only about 25% of processing and refining needs by 2035. Up to $6.5 trillion in annual economic activity is exposed if export controls are fully implemented. And closing the gap will require *$60 billion* in investment over the next decade. But what struck me most is where the IEA says the solutions are. Not primarily in new mines. The IEA finds that the upstream project pipeline -- the mining side -- already substantially outpaces what's being built midstream and downstream. The bottleneck is processing, separation, and manufacturing. That's where the investment gap lives, and that's where China's structural advantage is deepest and hardest to replicate. The IEA also highlights recycling as a strategic supply source -- not a niche complement, but a pathway that could reduce primary mined supply requirements by up to 35% by 2050. And it concludes that no single country can build a credible alternative supply chain in isolation. Cross-border partnerships, co-investment, and aligned offtake structures are not optional. If all that sounds familiar, it's because it’s almost literally the same playbook we’re using at Alta. We're building exactly at the intersection the IEA identifies as most critical. Our protein-based separation technology uses advanced biochemistry to separate rare earths and other strategic minerals from e-waste and complex feedstocks that conventional processing cannot handle economically. And we’re reaching out across borders, teaming up with Korea Zinc Company, Ltd (고려아연) -- the world’s largest non-ferrous metals smelter -- to build a U.S.-based rare earth supply chain. The processing gap the IEA describes is the one we aim to close, using American-born precision mining technology and cooperating with international partners. Download the IEA report here: https://lnkd.in/g7jfDiH8 Alta Resource Technologies

“Too slow, too timid and too attached to a rule book that others have already torn to shreds.” That’s the scathing assessment of the EU’s strategy in the ongoing minerals cold war between the US and China. The quote (dixit Noah Barkin) concludes a compelling article in De Standaard titled “How the US is trying to undermine China’s dominance in critical raw materials” (Korneel Delbeke). It outlines how the Trump administration launched a full-scale counteroffensive to claw its way back into the CRM race. This is no longer free-market capitalism; it’s state capitalism. The US is semi-nationalising mining and refining firms (e.g. LithiumAmericas), guaranteeing minimum prices to secure off-take (e.g. MP Materials), and fast-tracking permits. The message is clear: take back control, at any cost. “Mine baby mine” is now the new “drill baby drill.” ESG standards? Side-lined. Speed and sovereignty! Will it be enough to catch up with China? Unlikely. Opening #lithium and rare-earth mines is just the beginning. The US has lost decades of expertise across the mine-to-battery/REE-motor value chains. Rebuilding that knowledge takes time. Still, the US is no longer sitting on the sidelines. And Europe? Sadly, as I highlighted during the Euractiv panel debate earlier this week, we lack both the institutional agility to make decisions quickly and the mechanisms to implement them effectively. We are too cumbersome and too naive. One is reminded of Monty Python’s Life of Brian: “We need more action, let’s have a meeting about it.” The first CRM crisis erupted in 2010–2011 with the infamous #rareearth standoff with China. 15 years later, what do we have to show for it? A #CriticalRawMaterialsAct. But the strategic projects under the CRMA remain stalled. Financing is elusive. Permitting is sluggish (the EU does not have a mandate to issue permits!). Energy costs are high. #Circulareconomy ambitions? We continue to export #batterywaste and #blackmass to China and Korea. The new #RESourceEU Plan will unlikely fix them anytime soon. As I outlined during the #CRM panel debate in Brussels this week, the EU must urgently develop and execute a plan for made-in-Europe, buy-in-Europe vertical integration, supporting both supply (financing, permitting) and demand (e.g. via #greenpublicprocurement to create lead markets). We must stop letting Member States and companies fend for themselves in a fragmented scramble. It’s time to move toward a "United Member States of Europe". 👉 Opening statement Peter Tom Jones (Euractiv CRM panel debate, 28-10-2025): https://lnkd.in/eksmBMCB 👉 Full recording: https://lnkd.in/eqnb-4cr (starts at 2:53:47) 🎬 EUROPE's LITHIUM PARADOX: https://lnkd.in/e7Y94n82 🎬 MADE IN EUROPE: FROM MINE TO ELECTRIC VEHICLE: https://lnkd.in/df56vsp2 Lieven Sioen