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Global alarms rise as China's critical mineral export ban takes hold
Haven't seen this translate into positive action for ET funds like TINT, GMET, or DMAT. There may be others that I am not aware of. Maybe now is the time to put a little down on them.
Refining to the pure form of these metals is complicated to say the least. Some of the materials are radioactive that makes the refining expensive and subjected to strict environmental regulations. China does not follow the same guidelines as the west. At present China owns the lion share of refining these rare earth metals in industrial scale. It took several decades to developed their refining processes. Is there still time to catch up?
The article highlights the risk of tariffs where the major producers can weaponize these raw materials that are keys to many high valued products.
I am surprised that there is no more investment onto recycle and refine these spent magnets for example.
Reading up on this again, I am reminded that China controls the market almost entirely due to state subsidies to the production of rare earth metals rather than control of the raw sources of those elements.
The more they hold back, the more economically feasible other sources become. One might compare it to the way OPEC eventually made fracking economically viable.
Correct, the refining process is the control point to produce these rare earth metals. There are several locations outside of China which have minerals containing high concentrations of these metals.
The developed refining process at Oakridge Lab showed the feasibility of separating individual metal from the mixture. It is a good beginning. The next step involves the scale-up process to demonstrate the economy of scale at the spot prices of these rare earth metals. Federal subsidies is necessary to support local industries to produce these critical metals for both military and industrial applications.
The waste stream resulting from this process is a big issue and that needs to be addressed. US moved away from the refining business several decades ago due to environmental regulations and the overall cost of the business. Out-sourcing to other countries such as China who have much less regulations. Now the problem made the full circle back to the west.
Magnets get lumped with rare-earths category. There are news reports of potential slowdowns in auto production in the US, Germany and India due to Chinese export restrictions on magnets.
This problem may be more immediate than that for some esoteric rare-earths.
Refining to the pure form of these metals is complicated to say the least. Some of the materials are radioactive that makes the refining expensive and subjected to strict environmental regulations> We can do this, gut environment regulations and get this on fast track.
If we can restrict flow of AI chips (our strength) to China then China has every right to restrict the rare-earth materials export (their strength) to US/allies.
Do we need rare-earth materials for regular auto (gasoline based)?
Maybe not for a Model T, but according to an industry statement quoted by Reuters:
"Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components, including automatic transmissions, throttle bodies, alternators, various motors, sensors, seat belts, speakers, lights, motors, power steering, and cameras," the Alliance for Automotive Innovation wrote the Trump administration.
Yes, they are used in catalytic converters, spark plugs, and chipsets for electronic systems. The principle use in EVs is much larger in their high strength magnets for EV motors and heat management.
These metals are widely used in many electronic products, and are considered specialty metals unlike steel and aluminum.
@kings53man said: "Some of the materials are radioactive that makes the refining expensive and subjected to strict environmental regulations> We can do this, gut environment regulations and get this on fast track."
Good plan. I vote they build a facility in your backyard.
It can be done carefully just as the US nuclear program developed successfully. Rare earth metals are nationally critical materials that need to be produce domestically, and not outsourced elsewhere.
There are established and safe processes to refine radioactive minerals such as uranium (and others) for the nuclear program. Question is always the added cost, but it can be done.
It will take several years of sustained government funding to build this refining capability in an industrial scale (not lab scale). This will take gut if this country want to re-shore manufacturing here.
there are many dozens of these kind of innovations already in production, and always improving. regardless of anything else, jeremy grantham has been accurate in this regard.
@Sven- Are you also suggesting that we should "gut" (eliminate) environmental regulations? Somehow that doesn't sound like you.
Gut may be shorthand for simoleans, among other things, like political will.
There are projects at, or close, to commercial scale. But as I was reading through the various articles--linked, and unlinked--I was struck by how much of the research funding is, or was, driven by concerns that don't currently bother the executive id. And some of the activity is being carried out in ways that actively irritate the executive id.
I think the idea of 'rare earths" sounds like a big deal to some people in the executive id. Hence the interest in deals with Ukraine, or taking over Greenland. But really, we have quite as much as we need if China decides it wants to be the OPEC of REE.
People in the government of Greenland have recently been saying they would love to hear about actual investing ideas from the US. I think Greenland may make Sullivan, MO., look better than I remember it.
@Old_Joe, i firmly believe that refining rare earth metals can be done in US on commercial scale without changing the existing environment regulations. There are established processes to treat waste created responsibly. Here is where government subsidies can help to defer the manufacturing cost while producing these metal domestically. For national security, this manufacturing capability should be on top of the agenda, not tariffs.
This is exactly what China did 20 years ago in order to grow their own manufacturing capability on multiple fronts.
Comments
The article highlights the risk of tariffs where the major producers can weaponize these raw materials that are keys to many high valued products.
I am surprised that there is no more investment onto recycle and refine these spent magnets for example.
The more they hold back, the more economically feasible other sources become. One might compare it to the way OPEC eventually made fracking economically viable.
I wonder how much current US development of rare earth production is tied into various programs passed under Democrats that the Republicans would now love to get rid of. I'm thinking of research like this: https://www.ornl.gov/news/owner-us-heavy-rare-earth-mine-licenses-ornl-separation-technology
The developed refining process at Oakridge Lab showed the feasibility of separating individual metal from the mixture. It is a good beginning. The next step involves the scale-up process to demonstrate the economy of scale at the spot prices of these rare earth metals. Federal subsidies is necessary to support local industries to produce these critical metals for both military and industrial applications.
The waste stream resulting from this process is a big issue and that needs to be addressed. US moved away from the refining business several decades ago due to environmental regulations and the overall cost of the business. Out-sourcing to other countries such as China who have much less regulations. Now the problem made the full circle back to the west.
Actually, it's the only operating miner and processor in the Western Hemisphere according to the M* link. However, Canada also has a claim: https://www.instituteforenergyresearch.org/international-issues/canada-opens-its-first-commercial-rare-earth-elements-refinery/ I wonder what has happened to that project in the current environment.
The Pea Ridge mine is permitted, but not yet producing. https://calderausa.com/
As for recycling, this project surprised me: https://www.azcommerce.com/news-events/news/2025/4/cyclic-materials-to-invest-over-20-million-in-first-us-commercial-facility-in-mesa/
This problem may be more immediate than that for some esoteric rare-earths.
https://www.nasdaq.com/articles/shortage-rare-earth-magnets-endangers-us-vehicle-production
https://www.thedrive.com/news/the-next-car-production-crisis-could-be-caused-by-magnet-shortage
https://economictimes.indiatimes.com/industry/auto/auto-components/chinas-rare-earth-curbs-threaten-indias-auto-sector-ev-production/articleshow/121606509.cms
If we can restrict flow of AI chips (our strength) to China then China has every right to restrict the rare-earth materials export (their strength) to US/allies.
These metals are widely used in many electronic products, and are considered specialty metals unlike steel and aluminum.
Good plan. I vote they build a facility in your backyard.
There are established and safe processes to refine radioactive minerals such as uranium (and others) for the nuclear program. Question is always the added cost, but it can be done.
Typical of the present White House administration.
sven is correct, but only a small % of scale issues have non-ready solutions that require regulatory knowledge+cooperation.
but...in an anti-stem culture of grift, even the easy paths are ignored.
here is a solid example, around for a while :
https://enedym.com/technology/
there are many dozens of these kind of innovations already in production, and always improving. regardless of anything else, jeremy grantham has been accurate in this regard.
There are projects at, or close, to commercial scale. But as I was reading through the various articles--linked, and unlinked--I was struck by how much of the research funding is, or was, driven by concerns that don't currently bother the executive id. And some of the activity is being carried out in ways that actively irritate the executive id.
I think the idea of 'rare earths" sounds like a big deal to some people in the executive id. Hence the interest in deals with Ukraine, or taking over Greenland. But really, we have quite as much as we need if China decides it wants to be the OPEC of REE.
People in the government of Greenland have recently been saying they would love to hear about actual investing ideas from the US. I think Greenland may make Sullivan, MO., look better than I remember it.
This is exactly what China did 20 years ago in order to grow their own manufacturing capability on multiple fronts.
https://www.forbes.com/sites/alanohnsman/2025/04/21/the-only-us-rare-earth-mine-may-win-big-from-trumps-china-tariffs/?ctpv=searchpage
and another more recent look at rare earths and a couple of other companies
https://www.forbes.com/sites/jimvinoski/2025/04/23/will-america-finally-set-a-sane-path-forward-for-rare-earth-elements/?ctpv=searchpage
I have a small amount in MP and REMX VanEck Vectors Rare Earth Strategy which is 30% Chinese companies
I was surprised neither took off with the latest fight over Rare Earths although MP seems to have some life recently.