Guest Comment: Amer Hage Chahine (Partner) and Ilya Epikhin (Principal) – Arthur D. Litt
Rare earth elements (REEs) are critical to modern technology and the green energy transition, underpinning everything from medical devices and EV motors to consumer electronics and products in the defence and aerospace industries.
With China currently controlling approximately 70% of REE mining and 80 – 90% of separation and refining capacity, other countries are now taking action to diversify supply chains and ensure they have unfettered access to the resources they need.
Achieving this requires concerted action from governments, private investors, and industry stakeholders. This includes fostering national champions, supporting technological innovation, streamlining permitting processes, and encouraging international collaboration to build resilient, geographically diverse, and responsible REE value chains. We see three key pathways to success:
Diversifying primary resource extraction
The industry needs to prioritise projects in geopolitically stable regions, with a particular focus on high-value ion adsorption clay (IAC) deposits, which possess favourable heavy REE (HREE) content with potentially faster development timelines compared to traditional hard-rock mines.
Despite being low-grade, their relative ease of extraction using mild chemical solutions at ambient temperatures make IACs highly valuable in the REE sector. While production is currently concentrated in southern China and Myanmar’s Kachin State, new areas are emerging as IAC hubs, particularly Brazil, Africa, Chile, and Malaysia. IAC deposits are likely to be developed sooner in regions with more permissive environmental regulations, granting these countries valuable first-mover advantages – particularly in technology piloting and the refinement of beneficiation practices. Striking the right balance in environmental standards will be a critical success factor for any country aiming to lead in this space.
Strengthening global midstream capacity
The process of turning raw REE-bearing ore into high-purity REEs is extremely complex, technologically demanding, and currently dominated by China. There is therefore a pressing need to invest in new separation and refining facilities throughout the world, which would enhance the resilience and diversity of these critical stages in the REE value chain. Companies, including Australia’s Lynas Rare Earths and the US’s MP Materials (with backing from the Australian and US governments), are notable pioneers in this effort, illustrating that a viable, global rare earth corridor that covers mining, separation, metallisation, and magnet making is no longer aspirational, but rapidly becoming a commercial reality.
Advancing the circular economy and innovation
Given that REEs are present in a wide range of products and processes, recycling them provides an alternative source of supply. However, while areas such as magnet recycling from end-of-life products and processing industrial and mining waste streams (e.g. phosphogypsum) have been identified, they are not yet effective on a large scale and require significant R&D investments to develop further.
Alongside efforts to increase supply, research is focusing on reducing critical REE content in permanent magnets without sacrificing performance. While several technologies exist on this front, Grain Boundary Diffusion (GBD) deserves particular attention because, with one extra furnace step, it slashes the dysprosium/terbium content of NdFeB magnets while keeping high-temperature performance intact.
Addressing the multifaceted challenges of the REE sector will require sustained investment, relentless innovation, and enhanced cooperation among governments, industry stakeholders, and research institutions. However, it is vital – securing a stable supply of these critical rare earth materials is not merely an economic consideration; it is a strategic necessity for technological advancement and a sustainable 21st century future.
