【By Observer News, Shao Yun】

According to a July 8 report by Hong Kong's South China Morning Post, since China introduced new regulations on rare earth control, the United States, Australia, India, and several Western companies have accelerated their investment in key mineral resources, attempting to achieve "diversification" of the rare earth supply chain. However, the report cited analysts' views that China has long-term accumulation in rare earth processing capabilities and talent reserves, with high costs for catching up, making it difficult for other countries to easily "end" China's leadership position.

In the view of the South China Morning Post, rare earths have become a new battlefield in the Sino-US rivalry. In April, China announced export controls on seven types of medium-heavy rare earth materials, including samarium and gadolinium. Although China stated that rare earths have dual-use military and civilian attributes, and that export controls are an international practice, some people have distorted and exaggerated it as "weaponizing rare earths." The report said that after this, several overseas companies announced projects aimed at "reducing reliance on Chinese supply":

On July 2, St George Mining, an Australian company, announced that it had launched "high-resolution magnetic and seismic exploration" at its wholly-owned Araxá niobium rare earth mine project in southeastern Brazil to find more high-grade ore bodies.

On June 19, U.S.-owned Kaz Resources and Cove Kaz Capital released a statement saying they had obtained "key approvals" and were collaborating with the Kazakhstan Tau-Ken Samruk National Geological Company to explore a rare earth deposit in the southern Akbulak area of the country. The statement said that the current rare earth oxide (REO) reserves of the deposit are approximately 3.8 million tons, including elements such as neodymium and praseodymium required for manufacturing permanent magnets.

On June 15, Critical Metals Corp, a New York-based company listed in the U.S., stated that its "flagship rare earth project" Tanbreez in southern Greenland had received a loan of up to $120 million from the U.S. Export-Import Bank. The U.S. Export-Import Bank is the official export credit institution of the U.S. government. Reuters previously reported that if this loan is approved, it would be the first investment by the Trump administration in overseas mining projects.

Tanbreez Project Ore Body Critical Metals

In May, Lynas Rare Earths, an Australian rare earth company, announced that its new plant in Malaysia had started producing dysprosium oxide. The company's CEO and Managing Director Amanda Lacaze emphasized in a statement that this made Lynas "the only company in the world to commercialize the separation and production of heavy rare earth products outside of China."

Additionally, some governments are trying to strengthen their control over domestic critical mineral supply chains.

According to a July 8 report by Indian Press Trust (PTI), Malini Dutt, Trade and Investment Commissioner of the New South Wales Government of Australia, confirmed that India is negotiating with Australia on rare earth minerals. She said that Australia currently has some areas that can be opened, so India now has the opportunity to get involved early in the project and establish partnerships with some companies.

The Indian Express reported on June 21 that an Indian senior government official disclosed that to reduce its "serious dependence" on Chinese rare earths, the Indian government plans to invest between 35 billion to 50 billion rupees (approximately RMB 2.9 billion to 4.146 billion), promoting the production of domestic rare earth minerals and magnets, and expects approval within two weeks. "The immediate priority is to start domestic production of critical minerals as soon as possible," said the Indian official.

Previously, the U.S. and Ukraine signed a mineral agreement in May. President Trump at the time said that through this agreement, the U.S. could obtain "a large amount of very high-quality rare earths." Ukraine promised to seek long-term investments from U.S. companies.

This trend aligns with recent statements from the U.S., Australia, India, and others. According to a Reuters report on July 2, the U.S., Australia, India, and Japan announced the launch of the so-called "Quadrilateral Critical Minerals Initiative" to "counter" China's dominance in this field.

However, both Western research institutions and independent analysts have expressed the view that other countries will find it difficult to "disrupt" China's role in the rare earth supply chain.

According to the International Energy Agency (IEA), in 2023, over 60% of global rare earths were mined in China, and as much as 92% were refined in China. Australian research institution Earth Rarest believes that Australia has the potential to become the second-largest source of light rare earths globally, supplying 15% to 20% of neodymium and praseodymium worldwide, but also acknowledges that the country cannot "completely replace" China's supply capacity across all 17 rare earth elements.

Indian independent analyst Vivek Y. Kelkar also argues that China will continue to maintain its dominant position in rare earth supply for a considerable period. "Attempts to weaken the dominant position have been going on for years, but the progress so far is not enough to talk about 'ending China's dominance.'"

Kelkar believes that China, which currently holds a major share, already has a pricing power advantage, and few countries have proposed 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." However, for the U.S., Trump seems unwilling to explicitly 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 sectors, especially focusing on Africa and Latin America," said Kelkar. The U.S. is launching more initiatives in countries such as Angola, Rwanda, and Saudi Arabia to promote the diversification of the rare earth supply chain.

Cameron Johnson, Senior Partner at TidalWave, a Shanghai-based consulting company and former Vice President of the Shanghai American Chamber of Commerce, expects that other countries' rare earth supply diversification strategies will face numerous serious challenges, including time, cost, and human capital.

"Just the time required will be at least 10 to 20 years, and the cost will be in the tens of billions of dollars," said Johnson. "And where will the talent come from? Who knows how to process these materials? Who understands the purification process? How to achieve high purity? These talents do not exist in most countries."

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