【By Observer Net, Yuan Jiaqi】

Rare earths have become a new battlefield in the Sino-US rivalry. Since China introduced new regulations on rare earth control, the United States and its allies such as Australia and Canada have accelerated their investment in critical minerals, trying to achieve diversification of the rare earth supply chain.

But the ideal is full, while reality is harsh. On the 9th local time, U.S. media Bloomberg reported that when the West tries to counter China's absolute position in the rare earth field, construction delays have forced North America's already limited rare earth processing plants to delay production goals.

According to the report, a rare earth processing plant under construction in Saskatoon, Saskatchewan, Canada, was originally planned to process 400 tons of rare earth elements annually starting in 2025, which would be enough to meet the manufacturing needs of 500,000 electric vehicles.

However, according to Mike Crabtree, the project's director, due to delays in the supply of equipment needed for the factory construction, the expected output this year will only be around 100 tons.

Crabtree attributed the delay to supply chain issues in the post-pandemic era. In an interview, he explained, "Like many companies, we were also hit by supply chain problems after the pandemic. Equipment that usually takes five to six weeks to deliver now needs to wait nine to twelve months."

Bloomberg pointed out, "This setback highlights the numerous challenges faced by the United States and its allies in seizing control of China's rare earth resources."

Rendering of the rare earth processing plant in Saskatchewan, screenshot from video

Saskatchewan has 27 of the 34 minerals on Canada's list of critical minerals, and is the largest producer of primary critical minerals in Canada. According to U.S. media reports, the provincial government announced the construction of this full-process factory as early as August 2020, initially planning to fully operate by the end of 2022.

The project received over 100 million Canadian dollars (approximately RMB 525 million) in funding support from the provincial and federal governments, with the goal of ultimately having the capacity to process all 17 rare earth elements. According to the official website, once completed, the project is expected to become the first full-process integrated commercial demonstration rare earth processing plant in North America.

Crabtree expects the factory to be fully operational by the end of 2026. He also boasted that at that time, the factory "will be among the first to reach this scale, if not the first," producing more than 400 tons of praseodymium-neodymium metal annually, about 30 tons of dysprosium, and 15 tons of terbium.

The latter two metals were added to China's export control list in April this year. Crabtree emphasized that the operation of the factory will have no participation from China. According to his introduction, the raw materials of the factory will initially come from mines in South America and Africa, and it can also process recycled rare earth magnets from Europe and North America.

He claimed seriously that China's control and export restrictions on rare earths have sounded a "warning" for the industry, and warned alarmingly, "If we cannot establish a non-Chinese supply chain, we will always be at risk."

Although China has stated that rare earths have dual-use properties and that its export controls are an international practice, some people have distorted and exaggerated it as "weaponizing rare earths." Recently, such rhetoric has become increasingly frequent, with multiple overseas companies announcing projects aimed at "reducing reliance on Chinese supplies."

However, both Western research institutions and independent analysts have voiced the opinion that other countries find it difficult to "shake" China's role in the rare earth supply chain. According to the International Energy Agency (IEA), over 60% of global rare earths were mined in China in 2023, and as high as 92% were refined in China.

According to a report by the South China Morning Post on the 8th, the Australian research institution Earth Rarest believes that Australia has the potential to become the second-largest source of light rare earths globally, capable of supplying 15% to 20% of neodymium and praseodymium worldwide. However, it also admitted that the country cannot completely replace China's supply capabilities for all 17 rare earth elements.

Indian independent analyst Vivek Y. Kelkar also argues that China will continue to dominate the rare earth supply for a long time.

"Attempts to weaken the dominant position have started several years ago, but so far the progress is not sufficient to talk about 'ending China's dominance.'"

Kelkar believes that China, which currently holds a dominant share, already has an advantage in pricing power. Other countries rarely propose effective, state-led investment strategies for the rare earth industry, which will make China have a 'very strong hand' in the foreseeable future, unless global financing can be effectively guided. But for the United States, Trump does not seem willing to clearly propose any financing strategy linked to subsidies.

"The next phase of U.S.-China competition will intensify in the global rare earth mining and supply fields, especially focusing on regions in Africa and Latin America," Kelkar said. The United States is taking more measures in countries such as Angola, Rwanda, and Saudi Arabia to promote the diversification of the rare earth supply chain.

This article is an exclusive piece by Observer Net. Reproduction without permission is prohibited.

Original: https://www.toutiao.com/article/7525364562149868086/

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