All challenges are an opportunity, and China’s decision to control the supply of rare earth permanent magnets has turned this challenge into a technical opportunity. In the 90s and early 2000s, Western companies closed their solvent extraction systems for environmental reasons. China’s state government could come into this arena out of cheap power and land. However, this was not a unique chemistry victory.
Solvent extraction was developed in the West in the 1950s, but 30 years later China actually develops with almost rich clustering within the country, but the underlying science remains within reach of Western laboratories. Government subsidized Chinese exporters kill cheap leases to the market and drive new participants into bankruptcy whenever a non-Chinese refinery or processing system threatens to scale. Alternatively, Chinese companies have acquired international companies. However, the monopolies created by dumping can survive as long as the monopolies continue to run. By limiting exports, as it is now, Beijing loses the weapons its rivals are kept in chess. First, the volume involved is surprisingly small. In 2024, the US imported REE’s value of only $170 million. The decline was $186 million in 2023. Even if these costs increase five or ten times, they will have a slight impact on the US economy.
Secondly, the rest of the world doesn’t start from zero. Australia and Canada are accelerating lithium, graphite and rare earth projects, and the US Mineral Security Partnership has established financial networks between partner countries to streamline project funding. Washington also recorded a mining license in response to China. In Battery Chemistry, lithium iron (LFP) cartridges that do not require cobalt or nickel now offer most electric vehicles at the input level. On the motor side, Toyota and some European suppliers show permanent magnets that replace half of the heavy rare earth load with lanterns and cerium without losing torque. If material scale substitutions are not sufficient, all architectures will be replaced in the medium term. Tesla, for example, explains that his next-generation platform will eliminate rare earths entirely.
Both approaches reduce China’s reliance on materials. Hitachi in Japan recovers 97% of current In every challenge lies an opportunity & China’s decision to control the supply of rare earth permanent magnets has converted this challenge to an engineering opportunity compressor magnets alternating with semi-automatic hard disk drives. Linas, a mining company that works with Texas Blue Line, will commission the first heavy earth separation outside China next year. Micrograms tilted to smartphones and wearables, and once swallowed milligrams. As soon as the capitals of other parts of the world sink into new refinements, even later U-turns from China cannot immediately withdraw these customers. Tactics also undermine China’s typical market flood response. Prices can no longer be reduced worldwide without first solving these export controls. The outcome is a strategic dilemma.
India’s National Critical Mineral Mission (NCMM) takes place at the right time. The private sector can now apply for licenses for exploration and mouthing of critical minerals. We will quickly pursue key mining projects, a framework for rare earths, and guidelines that promote exploration. Can India make it? ■
Disclaimer: The views expressed by the author are his own and do not necessarily reflect the views of FMM magazine.
Vivek Dhawan
Chief Strategy Officer
Omega Seiki Mobility