As nations strive to secure their supplies of rare earth elements, a recent study from Malaysia has shed light on China’s unwavering control over the essential processing phase of this supply chain. Rare earth elements are pivotal in various technologies, from high-performance magnets to advanced defense systems, making their processing a crucial point of leverage for China.
This study highlights the complexities involved in extracting neodymium and praseodymium, two critical components for permanent magnets, which are located adjacent to one another on the periodic table.
Their similar chemical properties complicate the separation process, which is already intricate and resource-intensive.
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Understanding the complexities of rare earth processing
Rare earth elements often exist in clusters, and their chemical behaviors are closely aligned, making purification a formidable challenge. The extraction of neodymium and praseodymium to the purity levels needed for magnet production necessitates a multitude of separation stages. The study suggests that achieving this level of purity demands around 62 equilibrium stages, a significant jump from earlier methods requiring only 16 stages.
This increased complexity signifies that facilities aiming to produce high-grade materials must not only be expansive but also highly sophisticated and costly to operate. China’s ability to manage these intricate processes at an industrial scale has solidified its position as a global leader in rare earth processing, with the country accounting for approximately 60% of the world’s rare earth mining and nearly 90% of processing.
The evolution of China’s processing capabilities
China’s rise to dominance in the rare earth market was not incidental. The country gained insights into separation techniques from France in the 1980s, subsequently investing decades into optimizing solvent extraction methods and constructing processing plants that far exceed those built by other nations. Currently, China produces around 70,000 metric tons of refined rare earths annually and holds nearly complete control over the processing of heavy rare earth elements, which are vital for high-temperature and defense applications.
The findings from the Malaysian study underscore the reality that even when geological conditions favor extraction, it is the processing capabilities that serve as the primary barrier to entry for other countries. This situation has raised alarm among the United States and its allies, particularly given China’s willingness to leverage rare earths as instruments of geopolitical strategy.
Geopolitical implications of rare earth dominance
In, China imposed export restrictions on rare earths during a diplomatic tension with Japan, illustrating its potential to use these resources as leverage. In late, China expanded its restrictions by prohibiting the export of technologies related to rare earth processing and separation, further complicating efforts for other nations to establish competitive midstream capabilities.
These developments have intensified the urgency among U.S. policymakers. Rare earth elements are integral to modern defense technologies, such as fighter jets and precision-guided munitions, as well as to consumer electronics and electric vehicles. Despite being the second-largest producer of rare earths, the United States has historically sent a significant portion of its mined materials to China for processing.
Efforts to establish an independent supply chain
In response to this dependency, the U.S. Department of Defense has committed substantial resources since to develop a “mine-to-magnet” supply chain, primarily focusing on projects in Texas. These initiatives encompass the construction of separation plants for both light and heavy rare earth elements, as well as facilities for producing metals, alloys, and permanent magnets.
However, the current capacity in the U.S. remains limited compared to China’s extensive operations, and the new facilities are expected to take years to reach full production levels. Many of these projects initially target light rare earths, while China’s dominance in the heavy elements remains largely unchallenged.
Expanding global cooperation and investments
The United States is actively pursuing strategies to diversify its rare earth supply away from China, backing early-stage projects that aim to bolster non-Chinese production and processing capabilities. A notable initiative came in February when the U.S. Trade and Development Agency expressed support for the Monte Muambe rare earths project in Mozambique, which is expected to contribute to the supply of elements critical for permanent magnets and defense technologies.
This support aligns with broader U.S. strategies to reshape essential mineral supply chains, including recent initiatives linked to Project Vault, aimed at securing strategic reserves and reducing reliance on Chinese processing. Furthermore, the establishment of the Forum on Resource Geostrategic Engagement (FORGE) aims to mobilize investments and diplomatic support for resilient mineral supply networks.
As the Monte Muambe project progresses, its potential is further enhanced by ongoing exploration for fluorspar and gallium, both of which hold significant industrial value. This multifaceted approach underscores how governments are increasingly leveraging policy tools and strategic partnerships to counterbalance China’s ongoing dominance in rare earth processing.
