US President Trump recently signed a rare earth agreement with Australian Prime Minister Anthony Albanese at the White House. On October 28, when Trump visited Japan, the US and Japan also signed a rare earth cooperation framework agreement. US media such as Bloomberg and Singapore's business news website "The Edge Singapore" said that the US is seeking to establish a rare earth supply chain with its allies as an alternative to China. "Trump has launched a bold rare earth diplomacy," Fox News said. Trump plans to sign key mineral agreements with more trading partners.
Industry estimates suggest that if the new batch of rare earth production lines in the US come on stream smoothly, production could increase to the current level of imports by 2028. However, it is still difficult to shake China's position, which contributes over 90% of global production.
In the so-called "new capacity race to catch up with China" mentioned by foreign media, Texas-based Novion Magnetics is at the forefront of the US efforts to expand rare earth supply. After 10 years of research and development, Novion achieved commercial sales of rare earth permanent magnets in 2023. In recent months, the company's co-founder Scott Dunn has received a large number of consultation calls.
Recently, Novion signed an agreement with Australian major rare earth producer Lynas to jointly explore light and heavy rare earth sources and supply magnets to US defense and commercial customers. Dunn said that customers have asked him to increase production several times over, far exceeding their production capacity, and he has had to turn down more orders than he has accepted.
In the rare earth industry, even if production facilities are in place, it does not mean immediate capacity. "Some of the challenges you have to overcome, China has overcome through decades of industrial accumulation," Dunn admitted.
Rare earths are important elements and key strategic resources indispensable to modern industry. These dozen or so elements are crucial to modern technologies ranging from electric vehicles to wind turbines, robots and advanced weapons. However, rare earths need to go through strict processing to produce usable materials. With multiple advantages, China's rare earth processing scale has remained the world's largest, and China's rare earth production accounts for over 90% of global refined production. In recent years, China has introduced a number of policies and measures around industry access standards, industry consolidation and environmental protection, effectively promoting and ensuring the sustained and healthy development of the industry.
Foreign media pointed out that over a decade ago, there was a global wave of developing the rare earth industry, but it ultimately did not change the situation. Today, in this field, it remains unclear when the West will catch up with China. In addition, measures such as minimum producer prices set by Western countries to support emerging industries will shift costs to consumers, and it is unclear whether customers are willing to bear the additional costs.
Bloomberg quoted several industry experts as saying that given China's technological advantages, low costs and mature supply chain in the rare earth industry, China's dominant position is expected to continue.
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