China's Rare Earth Dominance Faces Diversification Push

Diversification efforts targeting monazite ore could reduce China's rare earth dominance but face significant technical and regulatory hurdles.

China controls roughly 90 percent of global rare earth oxide and metal markets. Companies like Lynas Rare Earths in Australia and Energy Fuels in Utah are processing monazite ore—containing neodymium, praseodymium, and dysprosium—to diversify supply chains. Energy Fuels has invested over $200 million to secure monazite assets in Brazil and Madagascar and received a $725 million conditional loan from the Trump administration in June. However, a Saskatchewan Research Council project designed to produce 40 tonnes of rare earths monthly by late 2024 yielded minuscule quantities and failed to reach its 400-tonne-per-year target by early 2025. The project, costing over CA$100 million (US$72 million), now targets completion by late 2027 with total costs exceeding CA$216 million.

Monazite ore processing is inherently complex: it contains radioactive thorium and uranium requiring government-regulated handling, and generates waste needing indefinite isolation. This technical and regulatory burden makes large-scale, cost-effective production difficult. Current diversification efforts do not guarantee rare earth independence from China.

This progress could lower tech costs globally if monazite processing scales reliably, but the radioactive handling and waste challenges mean supply chain shifts remain fragile. The Saskatchewan project’s failure as a 'cautionary example' highlights that even major investments may not overcome these barriers. What matters next is whether regulatory frameworks and technical solutions can scale monazite processing without compromising safety or creating new dependencies. The source notes current efforts do not guarantee rare earth independence from China—meaning reduced costs remain conditional on overcoming these hurdles.

Source: IEEE Spectrum