Good write up on the consequences of China getting stingy with their rare earth elements (REEs).
“Until 2023, China accounted for 99 percent of global heavy REEs processing, with only minimal output from a refinery in Vietnam. However, that facility has been shut down for the past year due to a tax dispute, effectively giving China a monopoly over supply. China did not impose restrictions on light rare earths, for which a more diverse set of countries undertake processing.”
The US has fallen behind. Playing catch-up will take quite some time. This may be one of the most impactful leverage points China has in the current trade war.
Yes, the Biden administration has taken significant steps to bolster rare earth processing in the U.S., including investments in domestic production and efforts to secure a more resilient supply chain.
Here’s a more detailed look at their actions:
Investing in domestic production:
The administration has awarded contracts and funding to companies like MP Materials and Lynas USA to establish commercial-scale rare earth processing facilities in the U.S.
Strengthening the supply chain:
The Department of Defense has invested in magnet manufacturing facilities to create a domestic end-to-end supply chain for rare earth magnets, including investing in E-VAC Magnetics.
Supporting research and development:
The Department of Energy has funded research on rare-earth free permanent magnets and other innovative technologies.
Using the Defense Production Act:
The Biden administration has invoked the Defense Production Act to accelerate the development of domestic supply chains for critical minerals like rare earths, including funding studies and the expansion of existing sites.
Addressing unfair trade practices:
The administration is working to protect U.S. magnet producers from unfair trade practices, including increasing tariffs on permanent magnets.
Executive Order on America’s Supply Chains:
In February 2021, President Biden signed Executive Order 14017, which directed a 100-day review of supply chains for critical minerals, including rare earth elements.
The new research found that there could be as much as 11 million tons of rare earth elements in accessible coal ash in the United States, which is nearly 8 times the amount that the U.S. currently has in domestic reserves, according to the researchers.Mar 17, 2025
Yep and Trump is saying to stock up on rare earths now. What a genius, start a fight and then they fool him by stopping rare earth shipments, then he says stock up. You can tell this was well thought out.
We can stock up on rare earths, processing them is challenging. We currently don’t have the capacity. For the time being, stockpiling REEs is like stockpiling oil without the ability to refine it…
The devil’s in the details. This administration isn’t good at details, nor do they care to be.
MP Materials has said they’ll begin producing automotive grade magnets by the end of 2025.
Punchline - US based REE mining and processing operations are worth looking at for long-term investment. There are a number of things companies, universities and the government should do to ensure success:
Companies should avoid using the term “rare earth” to avoid challenges from the anti-woke, climate change deniers. Seems silly, but we’re living in stupid times.
Universities must increase research to improve REE refinement and limit environmental impacts.
The government must fund existing companies and start-ups to create a more competitive environment and increase domestic capacity.
China has imposed export restrictions on seven rare earth elements and magnets in retaliation for new U.S. tariffs. These materials are vital to defense technologies, but the United States is entirely dependent on China for their supply.
I was watching a video yesterday where one commenter remarked, "Who would have guessed that I now need a “dysprosium oxide guy” to find me a bootleg supply.
Yes, but now is better than ten years from now, or never. There is a valid national security point to be made about the pitfalls of being dependent on the good will of others for any sort of material, or a variety of manufactured goods.
An economist was on Amanpour last night, spouting the same old “service economy” narrative. He apparently, has not come down from his ivory tower and taken a look around, in a while.
“Agreed. It would have been better 15 years ago, better late than never.”
I agree with that. But since we didn’t, it might have made more sense to not alienate the Country who is refining and processing the REE’s, while America begins the steps necessary to do it for ourselves. But the current administration’s approach is to burn bridges. That doesn’t make much sense, but in full disclose, I never ghost-wrote The Art of the Deal, nor did I ever bankrupt 3 casino’s. The business genius and acumen it takes to accomplish that are probably beyond my reach. The shills on Fox News are probably right, we all just need to take a chill pill and trust Trump. When has he ever not lived up to his promises ???
Some weeks ago, TIG put it a way I liked: using tariffs to push companies to reshore production, rather than the government paying them to reshore production. I like that perspective. But then, I have become very, very, tired of “JCs” sitting on their backsides, whining for a government handout, to do the investment in their companies that they should do in their normal course of business.
It’s all about execution. Is it possible to increase domestic production of some products without tariffs? Sure - put requirements on companies to use domestically produced REEs in their products if they’re receiving federal money. Defense contractors seem to be a good target for something like this.
For others, is it possible to thoughtfully reshore production of products that have other significant national security implications? Yes. Is that what we’re doing? No.
The constant flip-flop, the flippie, the flippie
To the flip, flip-flop and you don’t stop tankin’
To the Dow-Dow droppin’, say up yields are poppin’
To the blowin’ up our country, we’re beat
We’re years away from being able to process heavy REEs. The administration bumbling it’s way through trade policy has effectively cut us off from China’s heavy REE monopoly. This is no good.
