Beijing In Command: The Strategy Of Conquest Of Rare Lands. Espionage, Crime And Global Security Under Check

Key points

• China's rare earth control is a direct, brutal geoeconomic threat.

• Beijing wields this leverage with targeted pressure, covert finance, data extraction, pervasive espionage.

• Western intelligence agencies issue constant warnings on industrial espionage, infiltration, criminal networks.

• IP theft in the critical rare earth sector is a primary Chinese objective.

• China's strategy includes human exploitation (approaching slave-like conditions) and money laundering in overseas extractive operations.

• Western catastrophic strategic errors led to this dependency: decades of offshoring, abandoned R&D and public subsidies.

• The Western lag is at least a decade. Vulnerability is structural.

• Chinese rare earth export limits have already paralyzed crucial sectors, from automotive to defense.

• Current supply agreements are fragile. Stability is precarious.

• China controls 85-90% of global rare earth refining. Near-total value chain dominance.

• Beijing controls critical resources in Africa and Latin America. Models of exploitation and debt.

• Myanmar is China's "backyard" for heavy rare earths. A regime of exploitation and chaos.

• Environmental destruction and human exploitation abroad are hidden costs of Chinese dominance.

• States like Australia react with protectionist policies. Desperate defense of national assets.

• Mountain Pass rebirth is symbolic, but supply chain rehabilitation is slow and uncertain.

• The West must diversify, invest in refining and recycling. But with what resources? At what speed?

• Western economic and technological security is at stake. Can autonomy still be achieved?

Credit Extrema Ratio

China's control over rare earths is a direct, multifaceted threat. Since mid-2025, this strategy has entered a significantly more aggressive and sophisticated phase. These aren't mere restrictions; they're a lethal mix of targeted export pressure, covert financial leverage, aggressive data extraction tactics, and a pervasive campaign of industrial espionage and counter-espionage. This includes the theft of intellectual property in the critical rare earth sector and related technologies, infiltration of critical infrastructure, and compromising national security through complex networks, including state and quasi-criminal entities. This strategy is further amplified by the inhumane exploitation of personnel (approaching slave-like conditions) in overseas mines and money laundering from illicit operations. This isn't a trade issue. It's a brutal geoeconomic lever, meticulously orchestrated. Beijing wields this club with surgical precision against dependent states, influencing global markets, critical technologies, and political decisions through a strategy of "controlled suffocation." This in-depth analysis reveals how China has systematically acquired near-total dominance over the entire rare earth value chain: from raw mineral extraction to complex refining and advanced processing. Our investigation exposes the catastrophic strategic errors made by the West—decades of uncritical offshoring and abandonment of R&D and public subsidies—which have enabled this unilateral dependency, resulting in at least a decade's technological lag. We'll examine Beijing's increasingly aggressive current coercive tactics: from targeted manipulation of essential material exports for vital sectors like defense, electric vehicles, and artificial intelligence, to the forced extraction of corporate intelligence from Western firms. Western intelligence agencies, including the FBI and MI5, have repeatedly warned about the scale and sophistication of Chinese espionage, aiming to steal intellectual property and trade secrets, infiltrate critical infrastructure, and compromise national security through complex networks involving both state and non-state actors. We'll cover the recent escalations in the trade war initiated by the Trump administration, China's rare earth export restrictions (including crucial magnets) that have paralyzed key sectors, and the latest fragile agreements, whose stability remains uncertain. An emblematic case of escalating tension has emerged in Australia, where the government has launched legal action against Chinese investors for alleged breaches of foreign investment laws related to a strategic rare earth deposit, signaling a new era of protectionist policies and defense of national assets. This dramatic context compels a global rethink: the experience of the Mountain Pass mine in California embodies the will to re-establish critical domestic supply chains, including through innovative hiring strategies. Finally, we'll analyze the architecture of Chinese dominance, including the recent creation of the China Rare Earth Group, the crucial role of Myanmar as a strategic supplier, China's growing penetration into global critical mineral supply chains in Latin America and Africa, and the devastating environmental and social costs, often associated with criminal practices and labor exploitation, of these overseas operations. This is a race against time. The West must grasp the profound nature of its strategic vulnerability and act urgently to rebuild autonomous capabilities.

The Strategic Indispensability of Rare Earths: The West's Technological Achilles' Heel

Rare Earth Elements (REEs), 17 crucial metals, are the bedrock of modern technology. Despite their relative geological abundance, their "rarity" lies in the extreme difficulty and high costs of extraction and refining. Their unique properties make them indispensable for a wide range of high-tech applications. Without them, smartphones, electric vehicles, renewable energy, AI processors, and advanced defense systems are paralyzed.

Their economic importance far exceeds their mere market value. The global rare earth market, estimated at $792.52 million in 2024, with projections to $1,024.64 million by 2033, is just the tip of the iceberg. Their role in value-added industries creates a devastating multiplier effect. Neodymium and praseodymium are essential for permanent magnets, the heart of EV motors and wind turbines. Dysprosium and terbium enhance magnet performance under extreme temperatures, vital for military and aerospace applications.

The defense sector is particularly exposed. Modern fighter jets (a single F-35 contains nearly 417 kg of REEs), missile guidance systems, radar, and stealth technology depend on these materials. Virginia-class submarines and missile defense systems like THAAD require specialized rare earth alloys for operation. The global energy transition, aiming for net-zero emissions by 2050, relies on these elements. Demand for REEs in clean energy technologies could quadruple by 2040 (IEA).

Beyond defense and energy, rare earths are central to consumer electronics, artificial intelligence, 5G infrastructure, and quantum computing. Disruptions in their supply have a domino effect across multiple sectors. This combination of technological indispensability and production concentration creates asymmetric risk. Rare earths have few substitutes. Developing alternative supply chains requires years of massive investment, complex regulatory approvals, and advanced technical expertise. For financial markets, this fragility translates into supply chain vulnerabilities, price volatility, and growing geopolitical risk premiums embedded in technology, defense, and renewable energy equities. China's 2010 embargo on Japan demonstrated this: REE prices skyrocketed.

China controls 85-90% of global rare earth refining capacity and approximately 70% of total production. This leverage allows Beijing to influence global manufacturing priorities, pricing power, and diplomatic negotiations. It represents a geopolitical risk factor for dependent states. It also presents a potential investment opportunity for companies involved in rare earth exploration, recycling, and alternative supply chains outside China.

China's Ascent: A Relentless Industrial Strategy and the West's Catastrophic Errors

China's dominance in the rare earth market is a textbook case of long-term industrial strategy. It has been executed with precision and decades of patience. While the West has shifted toward high-value industries and has offshored heavy manufacturing, Beijing adopted a contrary view. As early as the late 1970s, China identified rare earths as an absolute national priority. Under Xu Guangxian, the father of China's rare earth industry, and supported by the Chinese Society of Rare Earth, the country invested immense state resources in mining, refining, and separation.

Beijing tolerated severe environmental impacts. While the West has tightened standards, China allowed its companies to scale rapidly without the regulatory constraints and costs faced elsewhere. This guaranteed unbeatable production costs. Western companies offshored refining to China. This process effectively hollowed out domestic rare earth industries in the US, Japan, and Europe. Global supply chains became intrinsically dependent on China.

China has not stopped at raw extraction, where it holds about 70% of global production. The government has invested massively in mastering the complex refining and separation processes. They have transformed raw ores into high-purity oxides and specialized alloys. Today, over 85% of global rare earth refining capacity is in China. This vertical integration allows Beijing to control prices and technological expertise. It creates almost insurmountable barriers to entry.

The West's strategic error has been twofold: on one hand, the cessation of public investments in basic research, industrial development, and public subsidies since the 1980s; on the other, allowing the complete offshoring of these critical value chain stages. This has left the West in a position of extreme vulnerability, with analysts estimating at least a ten-year lag in investments and technological capabilities needed to rebuild independent supply chains. The US and EU are strategically dependent on a wide range of critical minerals. 98% of the EU's rare earth supply comes from China. US dependency is estimated at around 80%. The United States, a global rare earth player until the early 1990s, abandoned public investments and basic research. China exploited these policies.

Beijing's Geoeconomic Club: The Strategy of Calculated Terror Amidst Espionage and Criminality

Since mid-2025, China's rare earth strategy has entered a significantly more aggressive and sophisticated phase. These are no longer simple restrictions but a lethal mix of targeted export pressure, covert financial leverage, aggressive data extraction tactics, supported by a vast and pervasive operation of industrial espionage and counter-espionage. Beijing has avoided generalized bans that would trigger a stronger global reaction. It has preferred dynamic restrictions that disrupt global supply chains while keeping diplomatic channels technically open. A strategy of "controlled suffocation."

Chinese customs data reported by Bloomberg confirms this. Rare earth exports to the US plummeted by 37% in April 2025. Rare earth magnet sales saw an even sharper drop: -58% to the US and -51% globally. The auto sector felt the impact first. By May, Ford, GM, and European manufacturers reported acute bottlenecks. Their rare earth magnet stockpiles had been exhausted. Mark Smith, CEO of US-based NioCorp, summarized the situation bluntly: "The automotive industry is now using words like panic; they're talking about shutting down production lines." A partial, temporary recovery in May 2025 – global REE exports rebounding 23% after US-China talks – has not eliminated the risk. Volumes remain well below 2024 levels. The specter of renewed disruption continues to rattle financial markets.

Alarm among Western firms operating in China is at its highest. Beijing demands sensitive commercial information: customer lists, pricing data, production details. This is a precondition for rare earth licenses. The Financial Times has documented the pressure on European and American firms to disclose strategic trade secrets in exchange for maintaining supply access. This tactic weaponizes China's regulatory authority. It extracts corporate intelligence. It expands influence across downstream industries.

Western intelligence agencies, including the FBI and MI5, have repeatedly issued public warnings about the scale and sophistication of Chinese espionage, aiming to steal intellectual property and trade secrets specifically within the rare earth sector and related critical technologies. In a rare joint appearance, FBI Director Christopher Wray stated that the Chinese government represents "the biggest long-term threat to our economic and national security," while MI5 Director General Ken McCallum called Beijing's covert pressure "the most transformative challenge we face." They have highlighted how China employs "professional, planned activity" of global espionage, not only to steal intellectual property and trade secrets (including REE refining processes and advanced magnet technologies), but also to infiltrate critical infrastructure and influence Western politics through complex networks, including state and non-state actors.

The tactics of this geoeconomic aggression include:

• Massive cyber-espionage: Groups like "Salt Typhoon," linked to the Chinese state, have conducted persistent attacks against US critical infrastructure operators, telecommunications companies, and other sectors, aiming to "map out our infrastructure, steal our data, erode our strategic edge from within." The FBI has warned that China is "pre-positioning" cyber capabilities for disruptive attacks.

• Personnel recruitment: MI5 has revealed that Chinese agents have contacted over 20,000 UK citizens on professional platforms like LinkedIn to obtain sensitive information and recruit sources. The FBI has reported an elaborate campaign using fake job sites and social media to recruit former US federal workers, including those with access to national security information, with a focus on critical technology sectors.

• Exploitation of "front" companies and criminal networks: The US Department of Justice and the FBI have accused and indicted Chinese nationals for large-scale hacking schemes benefiting the Chinese government, often through cybersecurity firms like "i-Soon," which act as intermediaries for Chinese intelligence services. This provides a layer of "plausible deniability" for Beijing, masking state operations behind private or seemingly legitimate entities.

• Regulatory pressure and covert acquisitions: Concurrently, Chinese sovereign wealth funds and state-backed conglomerates continue acquiring stakes in foreign rare earth mining projects, advanced magnet firms, and downstream processing facilities. Beijing ties export permits to equity participation. It amplifies its control over raw material flows and corporate ownership structures across the rare earth value chain.

China has already demonstrated the willingness to use this leverage in specific geopolitical contexts, and tensions have significantly escalated with the trade war initiated by the Trump administration, which triggered immediate responses from Beijing, including threats to limit REE exports.

• 2010: The CPC limited REE exports to Japan after a Chinese fishing trawler collided with a Japanese coast guard vessel near the disputed Senkaku Islands.

• Trump Trade War (2018-2019): In response to US tariffs on Chinese goods, Beijing threatened to use its dominant position in rare earths as a countermeasure. While no immediate total blockades occurred, the mere threat generated significant anxiety and market volatility, highlighting Western vulnerability. China imposed retaliatory tariffs and restrictions on various products, including gadolinium, essential for MRI machines in the US. The press reported "panic" and "paralysis" in key sectors.

• 2020: Beijing threatened to reduce rare earth supply to US defense contractors (including Lockheed Martin) over US arms sales to Taiwan.

• 2022: The influence campaign "Dragonbridge" (Mandiant) targeted Australia's Lynas Rare Earths Ltd., disseminating content criticizing its alleged environmental record and calling for protests against its processing plant construction in Texas. Canada's Appia Rare Earths & Uranium Corp and USA Rare Earth were also affected.

• Recent Chinese Export Restrictions (April 2025): China suspended exports of certain heavy rare earths and magnets to all countries, including Japan and Germany, not just the US, in retaliation for new Trump tariffs. This caused immediate bottlenecks and alarm for the global tech industry.

• Agreements and De-escalation (June 2025): Faced with this pressure, the United States and China announced a framework agreement to facilitate rare earth exports to the US. President Trump confirmed that supplies would resume in exchange for American concessions (including accepting Chinese students into US universities). China confirmed its willingness to remove some export restrictions. However, the stability of such agreements is always precarious, as demonstrated by the fact that after the Geneva talks (May 2025), Beijing had reintroduced restrictions by slowing license issuance, forcing the US into new negotiations.

This intensification of tactics, however, also carries risks for Beijing. The National Interest warns: overplaying this hand may force the US, EU, Australia, and Canada to fully commit to the costly process of building domestic mining, refining, recycling, and substitution capabilities. If this accelerated diversification succeeds, Beijing's current dominance could face serious erosion over the next decade.

But for now, China's 2025 rare earth campaign is an exquisitely tuned mix of coercion, finance, and diplomacy. It's not just a raw commodity squeeze. It's the careful orchestration of global supply dependencies, capital flows, and corporate vulnerabilities. Rare earths are no longer just minerals. They are instruments on the grand chessboard of 21st-century economic statecraft.

China's Internal Consolidation: The Architecture of Dominance and Its Weaknesses

The process of consolidating China's rare earth sector began in 2012, creating six regional state-owned conglomerates. A decisive step was taken in December 2021: the creation of the China Rare Earth Group. This Chinese state-owned enterprise is the result of the merger of giants like China Minmetals, Aluminium Corp. of China (Chinalco), and Ganzhou Rare Earth Group, plus two important research institutes. Under the direct control of the State Council's State-owned Assets Supervision and Administration Commission, this new conglomerate will control China's heavy and medium rare earths, covering approximately 30-40% of global supply.

The objectives of this merger are clear:

• Consolidate control: Solidify China's dominant position.

• Optimize the supply chain: Increase efficiency and rationalization in rare earth production and processing, reducing internal competition and improving competitiveness.

• Counter external competition: Respond to other countries' ambitions to reduce their dependency on China.

In the future, companies in northern China, around the Baotou mine in Inner Mongolia, will also be consolidated. Beijing will then have only two enormous vertically integrated state-owned enterprises capable of managing rare earth extraction and post-processing. The southern company will focus on heavy minerals, while the northern one will focus on light minerals (including neodymium).

China's Global Expansion: Latin America and Africa

Beijing's strategy to secure dominance over critical minerals extends far beyond its own borders and domestic reserves, embracing a vast network of acquisitions and direct investments in Latin America and Africa. These continents, rich in resources but often lacking capital and processing infrastructure, have become a primary target for China, which operates with a long-term vision and a willingness to invest in contexts that the West has often overlooked or found too risky.

In Africa: Cobalt and Beyond

The Democratic Republic of Congo (DRC) is the most striking example. This country produces over 70% of the world's cobalt, a mineral essential for electric vehicle batteries and electronics. Chinese state-owned enterprises and development banks already control 80% of the DRC's total cobalt production. Of the ten largest cobalt mines globally, nine are in the Katanga region of southern DRC, and of these, half are owned by Chinese companies. Projects like the Sicomines copper-cobalt mine, supported by Chinese financing in exchange for infrastructure development, illustrate the model. In 2025, the DRC introduced cobalt export restrictions, but this primarily caused a price surge, which also benefited the Chinese companies that already control most of the production and processing. China is investing heavily in other critical minerals in African countries like South Africa, aiming to diversify supply sources and strengthen its "insurance against trade wars," as highlighted by 2025 reports.

In Latin America: The Lithium Race and Rare Resources

The "Lithium Triangle"—formed by Argentina, Bolivia, and Chile—is at the center of Chinese attention. This is another critical mineral essential for the energy transition. Chinese companies have invested heavily in acquiring stakes and developing lithium extraction projects, often employing a model that yields large profits for the companies at the expense of local communities and the environment, as reported by 2025 analyses. While Argentina aims to increase lithium production by 75% in 2025, China remains a dominant buyer and investor.

Regarding rare earths themselves, Brazil is emerging as a significant player. With estimated reserves of 21 million tons (USGS 2025), Brazil is a key target for Chinese diversification should supplies from other regions become uncertain. Brazilian projects like Serra Verde aim to produce 5,500 tons of rare earth oxides annually by 2026. China, through investments and agreements, aims to secure access to these new sources, often offering separation and processing technologies that local countries do not possess.

This global expansion not only guarantees China access to a vast portfolio of critical minerals but also allows it to establish strategic control points that amplify its geoeconomic influence, making the challenge for the West to build truly autonomous supply chains even more complex.

Myanmar: China's "Backyard" for Heavy Rare Earths and Debt/Military Leverage

China's strategy for rare earth dominance isn't limited to internal control and global market manipulation; it extends to controlling external sources, and Myanmar represents a crucial and emblematic case. This country, torn by internal conflicts and characterized by weak governance, has become the primary external supplier of heavy rare earths for China, indispensable elements for high-performance magnets and defense technologies.

A Geological and Geopolitical Anomaly:

Myanmar, particularly Kachin State on the border with China, possesses significant rare earth reserves, especially heavy ones like dysprosium and terbium, which are rarer and more difficult to extract. While China has depleted some of its domestic heavy REE reserves and has tightened internal environmental regulations, Myanmar has offered a low-cost supply source with almost non-existent regulations. In 2024, Myanmar supplied 44,000 tons of rare earths to China, accounting for 57% of its total REE imports, a dramatic increase from 25,000 tons in 2020. Between 2017 and 2024, Myanmar exported over 290,000 tons of rare earth material to China, valued at over $4.2 billion, with 85% of this value generated after the 2021 coup.

Chinese Control through Militias and Debt

China has built a complex web of influence in Myanmar, exploiting political fragility and civil conflict.

• Militias and Security: Recent investigations (June 2025) have revealed the involvement of China-backed militias in protecting rare earth mining operations in Shan and Kachin States. These militias, often linked to armed ethnic groups or local paramilitary forces, ensure the security of mines and the flow of minerals to China, even in rebel-controlled areas. China, while maintaining relations with the military junta, has demonstrated pragmatism in dealing with non-state actors, such as the Kachin Independence Army (KIA), which controls some of the most important mines. According to some analyses, all negotiations between the Myanmar army and the KIA are now supervised in Kunming by Chinese People's Liberation Army (PLA) officials, effectively cementing Beijing's grip on the region.

• Economic Leverage and Debt: Myanmar is a key partner in China's Belt and Road Initiative (BRI), particularly through the China-Myanmar Economic Corridor (CMEC), which includes infrastructure projects like deep-sea ports (Kyaukphyu), railways, and pipelines connecting China's Yunnan province to the Indian Ocean. These projects, often funded by Chinese loans, have created significant economic and debt dependency for Myanmar. Although the total value of approved Chinese investments in Myanmar amounted to $21.99 billion by July 2024, the perception of these projects is often that of resource extraction rather than equitable development, fueling local war economies. China has the ability to negotiate the security of its assets with actors other than the central government, exploiting its financial and diplomatic influence.

• Vulnerabilities in China's Supply Chain: While Myanmar is crucial for China, this supply chain also presents vulnerabilities. Internal conflicts in Myanmar have caused significant disruptions. For example, in late 2024, when the KIA intensified fighting against the military junta and took control of some mines, China temporarily closed border trade, leading to a surge in dysprosium and terbium prices. A magnitude 7.7 earthquake in March 2025 further disrupted REE production, exposing a strategic vulnerability for China itself, whose processing strength is undermined if raw material inputs are limited.

In summary, Myanmar has become an extension of China's rare earth supply system, allowing Beijing to externalize environmental liabilities and secure access to critical minerals, particularly heavy rare earths. This relationship, however, is intrinsically linked to Myanmar's complex and unstable internal political situation, making it both a strength and a potential vulnerability for Chinese dominance.

The Hidden Cost of Chinese Dominance: Environmental Destruction, Human Exploitation, and Money Laundering Abroad

China's dominance over critical minerals, while economically efficient for Beijing, has entailed a devastating environmental and social cost, often externalized to countries with weak regulations and fragile governments. This "resource race" has generated profound ecological impact and growing denunciations from communities and international organizations, often intertwined with criminal practices and human rights violations.

Myanmar: The Ecological Disaster Amidst Exploitation and Illegality.

In Kachin State, Myanmar, the extraction of heavy rare earths by Chinese-backed operations has transformed entire landscapes into moon-like zones. Ion-adsorption clay mines, though effective, use enormous quantities of toxic chemical solutions (like ammonium sulfate) which, once rare earths are extracted, are discharged without any treatment. This has poisoned watercourses, rendering water undrinkable for local communities, destroying river biodiversity, and compromising agriculture. Organizations like Global Witness and the Environmental Investigation Agency (EIA) have extensively documented massive deforestation, soil erosion, and irreversible land contamination, often linked to illegal or semi-legal mining operations that thrive in Myanmar's post-coup chaos. In 2025, local denunciations have increased, highlighting growing despair over lost livelihoods and a rise in pollution-related diseases. These unregulated mining activities are often associated with severe human rights abuses, including forced labor and near-slavery conditions, in a context where local armed militias—some linked to Chinese interests—control the sites and workers, and illicit proceeds fuel extensive money laundering.

Democratic Republic of Congo: The Price of Cobalt and Blood.

In the DRC, Chinese dominance in the cobalt sector has exacerbated pre-existing environmental problems. Intensive mining operations, often with little oversight, have led to massive dumps of toxic waste and processing tailings. These residues contaminate the air, soil, and especially water sources, causing severe health problems for local populations, including birth defects and respiratory illnesses. While the issue of child labor (widely documented by Amnesty International and UNICEF) in extremely dangerous conditions persists, with children working in unsafe tunnels or near toxic waste piles, conditions often border on modern slavery. Environmental degradation is equally critical, with rivers flowing in unnatural colors due to heavy metals. In 2025, new satellite analyses have revealed aggressive expansion of mining areas, resulting in forest and habitat loss. Proceeds from some of these opaque operations are suspected of being involved in vast money laundering schemes crossing international borders.

Latin America: Lithium and the Water Crisis

In the "Lithium Triangles" of Chile, Argentina, and Bolivia, extraction operations, many with significant Chinese involvement, have generated intense environmental concerns. Lithium extraction from underground brines requires enormous quantities of fresh water in arid regions, exacerbating water scarcity for local communities and agriculture. Vast evaporation ponds alter saline ecosystems, and there are fears of contamination of aquifers with heavy metals and other chemicals used in the process. Protests by indigenous communities, often those most affected by water scarcity and landscape alteration, have intensified in 2024-2025, demanding greater transparency and sustainable practices, and denouncing the lack of economic benefits despite environmental and social harm.

These cases demonstrate how China's pursuit of strategic resources abroad, often in contexts of weak governance, has contributed to a development model that externalizes environmental and social costs. This creates an ethical and sustainability challenge for the West, which seeks to diversify its supply chains while maintaining higher standards.

The West's Countermeasures: The Crucial Path to Strategic Autonomy

The gravity of Western dependency on Chinese rare earths demands an immediate and coordinated strategic response. The United States, the European Union, and their allies are finally accelerating initiatives, though the path to significant autonomy is long and costly. National security and technological competitiveness are at stake.

1. Diversification of Extraction Sources: Reclaiming the Mine and the Land

   • Domestic and Allied Projects: Both the US and the EU are investing in new mineral deposits outside China. The US, for example, has intensified exploration and investments in countries like Australia (e.g., expansion of Lynas Rare Earths' capacity, with $120 million government support for new separation facilities), Canada (with significant investments in exploration and development, and discoveries in the Northwest Territories), and Africa (Tanzania and Namibia have attracted over $350 million in investments). In June 2025, the EU announced 13 new strategic projects for raw materials outside its borders, focusing on both extraction and processing, with the goal of diversifying supplies. It's crucial to accelerate permitting processes, currently taking decades, while maintaining rigorous environmental standards.

   • Strategic Agreements: Agreements are being signed to guarantee access. The United States, for instance, has forged understandings for cooperation on critical raw materials with Saudi Arabia and is exploring mineral resources in Ukraine, although negotiations (like those in February 2025 with President Donald Trump) have proven complex and politically delicate.

2. Strengthening Refining and Processing Capacities: Rebuilding the Lost "Midstream"

   • Infrastructure Investments: The real challenge is not just extraction, but the capacity to refine and separate rare earths. The US is supporting companies like MP Materials (whose stock has increased by 40% in May 2025 due to the ramp-up of its magnet facility in Texas, funded by the Pentagon). The EU, through the Critical Raw Materials Act (CRMA) which entered into force in May 2024, has set ambitious targets: to extract at least 10% of its annual strategic raw material consumption by 2030 and process at least 40% within the EU. The CRMA also provides accelerated timelines for permits (27 months for extraction, 15 months for processing and recycling of strategic projects). The European Commission has already announced the list of the first "Strategic Projects" recognized by March 2025.

   • Clean and Sustainable Technologies: The West aims to develop cleaner and more efficient refining processes to avoid the historical environmental impacts associated with the Chinese industry, which for years operated with permissive standards. Companies like Phoenix Tailings in the US are pursuing domestic refining capabilities with innovative technologies.

3. Innovation, Substitution, and Recycling: The Path of the Circular Economy

   • Research and Development of Alternative Materials: A priority is R&D on materials that can reduce or eliminate the need for REEs, especially in magnets where neodymium and dysprosium are crucial. The goal is product design that lessens dependency on these critical elements.

   • Rare Earth Recycling (Urban Mining): Recycling emerges as a strategic and environmentally sustainable solution. The rare earth recycling market is estimated at $23.720 million in 2025 and is projected for strong growth. Advanced separation and purification technologies are making recycling more economically viable. The magnet segment is the most promising, given the growth of electric vehicles and wind turbines. Companies like CoTec Holdings Corp. are developing magnet recycling facilities in the US (e.g., Dallas-Fort Worth) that use hydrogen to extract high-purity magnet powders from end-of-life products, eliminating high-temperature or chemical leaching processes. The EU, with the CRMA, aims to recycle at least 25% of its annual strategic raw material consumption by 2030, promoting a strong secondary market.

   • New Extraction Technologies: Innovative methods such as bioleaching (extraction from mining waste) and the use of ion-adsorption clays (IAC) outside China are also being explored, allowing for faster production (4-7 years) compared to traditional mines.

4. Building Strategic Reserves:

   • Many Western governments, including the EU, are developing ambitious plans to establish strategic rare earth reserves, similar to oil and gas stockpiles. This would create a buffer against sudden supply shocks and provide time to activate alternative sources in a crisis.

5. International Cooperation and Strengthened Alliances:

   • Alliances like the Minerals Security Partnership (MSP), led by the US, are vital for coordinating efforts and mobilizing private and public investments. Cooperation includes countries like Australia, Canada, Japan, South Korea, and India.

   • Defining common standards for sustainable and responsible rare earth production is crucial. This creates an ethical and reliable alternative to the Chinese model, which in the past neglected environmental impacts.

6. Government Policies and Continued Financial Support: The Emergence of Strategic Protectionism

   • Legislation, like the aforementioned EU CRMA, is fundamental for providing a clear framework and accelerating processes. The US has issued executive orders (e.g., April 2025, "Unleashing America's Offshore Critical Minerals and Resources") to accelerate the development of offshore and terrestrial mineral resources.

   • Public funding programs and public-private partnerships are indispensable for supporting the substantial initial costs of exploration, extraction, refining, and R&D. The EIB, for example, is tripling funds for European SMEs in the defense and raw materials sectors.

   • Tools like export credits to reduce the risk of overseas investments and "procurement preferences" policies for materials of Western or allied origin are being evaluated.

   • Emergence of Protectionist Policies: A growing phenomenon is the adoption of more protectionist policies to safeguard strategic mineral assets. A prime example is the legal action initiated today by the Australian government against a group of Chinese investors for alleged breaches of foreign investment laws. Australia's Treasurer Jim Chalmers announced the action against Indian Ocean International Shipping and Service Company for failing to comply with an order to sell shares acquired in Northern Minerals, developer of the Browns Range project. This deposit, located in far northern Western Australia, is particularly rich in dysprosium and terbium, two of the most valuable rare earths, essential for industrial and defense equipment, and whose supply is currently dominated by China. Both materials were included in a recent temporary Chinese export block to the United States. Terbium has also recently been added to the inventory of products from Australia's Lynas Rare Earths, which collaborates closely with the US government on rare earth refining. The Browns Range project is reported to contain the largest deposit of dysprosium and terbium outside China. This case underscores states' growing determination to defend their strategic resources through legal and regulatory tools, even at the cost of diplomatic tensions.

The implementation of these strategies is complex and requires unequivocal political will and significant investment. The ongoing dynamics in 2025, with intensifying Chinese restrictions and Western responses (such as the recent, albeit fragile, rare earth export agreements between the US and China), underscore the urgency of moving from words to action to ensure the economic and technological security of the West.

The "Rethink" in the West and the Rebirth of Mountain Pass: A Case Study

The world is full of examples of countries that have abandoned key industries in favor of offshoring, only to reverse course in the face of new geopolitical realities. This shift in thinking has intensified in an era of fragmented trade relations and protectionist policies. There's a strong desire to restore the UK's textile and apparel sector, which played a leading role in the Industrial Revolution; Australia wants to revitalize forward-looking aspects of a national automotive industry that has collapsed; and Japan is spending trillions of yen to revitalize domestic semiconductor manufacturing. In all these cases, cost, cleanliness, and efficiency considerations led to the conclusion that it would be better to let someone else produce goods and then import the results. Today, security and resilience have overturned that logic.

The Mountain Pass rare earth mine in California, not far from the Nevada border, perfectly embodies this rethink. It's the only operational rare earth mine in the United States, and its history is emblematic of the Western parable. Founded in 1919 as Molybdenum Corporation (named after a particularly resistant metal sourced in New Mexico, found in Japanese swords and German cannons before being used for rocket propulsion), the company in 1950 acquired mining claims in a high-altitude area of the Mojave Desert, California, after the discovery of a rare earth-containing mineral called bastnaesite. By 1961, it was sponsoring academic research on rare earths. The discovery that a particular variety could enhance the red color needed for increasingly popular color televisions triggered a surge in production.

The market has experienced highs and lows over the years. There was a rebranding and an acquisition. When the use of rare earths as catalysts in oil refining declined in the 1980s, so did sales for the largest American supplier. In 2002, with globalization flourishing, mining operations at Mountain Pass halted. Groundwater contamination had been documented. Competing in a global market increasingly dominated by China seemed futile.

Around the same time, the other end of the supply chain also dismantled when an Indiana-based rare earth magnet producer moved its operations to China. According to its former CEO, the company was losing $5 million annually. Moving production closer to the necessary raw materials seemed the logical solution.

By late 2023, China accounted for over 69% of global rare earth production and approximately 90% of the finished magnets needed for electric vehicles and wind turbines. Demand was high and set to continue growing.

In 2023, something changed: the new owner of the Mountain Pass mine restarted separating the rare earths it had begun extracting there in 2017, instead of outsourcing that task to a China-based company, thereby "repatriating a critical national security capability" in the process. The company is actively hiring, with a crusher operator position paying up to $36.80 per hour, about four times the average salary in China's mining sector. In early 2025, it began producing rare earth magnets in Texas. This demonstrates how targeted investments, even with higher costs, can reactivate crucial sectors and create skilled job opportunities, positively impacting employment in the context of national security and resilience.

Conclusion: The Imminent Challenge to Western Economic Security

The rare earth saga isn't a trade story. It's an emblem of 21st-century geopolitics. Raw materials are not industrial inputs. They are economic and diplomatic weapons. China's dominance over extraction, refining, and downstream processing has granted it extraordinary leverage against the US and Europe. A refined blend of selective restrictions, financial acquisitions, regulatory coercion, corporate data extraction, and pervasive espionage and counter-espionage activity. Beijing has transformed rare earths from obscure minerals into instruments of global influence.

This asymmetric advantage, however, is not without vulnerabilities. Every aggressive move by China incentivizes Western nations to accelerate efforts toward diversification, supply chain independence, and technological substitution. The financialization of rare earths, evident in sharp volatility across equity and commodity markets, reflects not only speculative excitement but also the fragility of an overly concentrated global supply system.

Considering the depth of this dependency and the vast temporal gap in investments and technological capabilities, what will be the real capacity of the United States and the European Union to effectively mitigate this structural vulnerability and rebuild a resilient and autonomous supply chain? The economic and technological security of the West is at stake.