Rare Earth: With The News That A China National Champion May End Up With An Indirect Holding In America's MP Materials...(MP)

...A look at who's who in China. First up, from Reuters, Sept. 18:

EXCLUSIVE China Rare Earth Group in talks to buy MP Materials shareholder Shenghe Resources, sources say

And from Rare Earth Mining News, March 27, 2026:

Chinese Rare Earth Companies: Top 10 Producers 2026 

Chinese rare earth companies account for approximately 60% of global rare earth mining output and more than 85% of global separation and processing capacity — a concentration that shapes pricing, supply chains, and industrial policy from Beijing to Brussels. For investors, procurement directors, and policymakers tracking the rare earth supply chain, understanding which companies control what, and how they relate to the Chinese state, is now a baseline requirement.

How We Ranked the Top 10 Chinese Rare Earth Companies

This ranking assesses companies across five criteria: production volume and resource base, position in the value chain (miner, processor, materials manufacturer, or integrated operator), registered capital as a proxy for balance sheet scale, strategic state significance, and measurable global market impact. State-owned enterprises dominate this list — that is a deliberate feature of China’s rare earth industrial policy, formalised most visibly through the creation of China Rare Earth Group in December 2021.

1. China Northern Rare Earth (Group) High-Tech Co., Ltd. (600111.SH)

China Northern Rare Earth is the world’s largest rare earth producer by output volume, built on privileged access to the Bayan Obo deposit in Inner Mongolia — the single largest rare earth reserve on earth. The company receives rare earth concentrates from Baoshan Mining, a subsidiary of Baotou Steel Union, and converts them into separated oxides and downstream functional materials. Its registered capital stands at CN¥3.62 billion.

The product focus is light rare earths, with neodymium and praseodymium oxides — the feedstock for NdFeB permanent magnets — representing the highest-value output. China Northern Rare Earth is not part of the China Rare Earth Group consolidation structure; it operates under the Inner Mongolia government and the Baotou Steel Group umbrella, a deliberate policy decision to keep northern and southern rare earth assets in separate state structures.

For context on the elements this company brings to market, see the neodymium price tracker and praseodymium price tracker.

2. China Rare Earth Group Co., Ltd.

China Rare Earth Group was established in December 2021 by directive from Beijing as the national rare earth champion — a consolidation vehicle designed to bring the fragmented southern Chinese rare earth industry under unified state control. Headquartered in Ganzhou, Jiangxi, with a registered capital of CN¥100 million at the holding company level, it controls China Southern Rare Earth Group, Guangdong Rare Earth Industry Group, and Rising Nonferrous Metals through a layered ownership structure.

The group’s strategic focus is heavy and medium rare earths — dysprosium, terbium, and the other critical elements extracted from Jiangxi and Guangdong ion-adsorption clay deposits. Two of its subsidiaries are publicly listed: 000831.SZ and 600259.SH. China Rare Earth Group is the primary vehicle through which Beijing manages export quota allocations, processing licences, and strategic reserve decisions for heavy rare earths. Its policy significance exceeds its registered capital figure by a substantial margin. See the dysprosium price tracker for current market benchmarks on the elements it primarily controls.

3. Guangdong Rare Earth Industry Group Co., Ltd.

Guangdong Rare Earth Industry Group is a wholly-controlled subsidiary of China Rare Earth Group, transferred from Guangdong Rising Holdings in January 2024 as part of the ongoing southern consolidation. Registered capital of CN¥1 billion. The company operates medium and heavy rare earth assets across Guangdong Province and controls Rising Nonferrous Metals, giving the group a direct stake in ASX-listed operations via that subsidiary’s holdings.

The full value chain is represented: mining, smelting, separation, new materials production, and trading. Guangdong Province sits on significant ion-adsorption clay deposits that yield medium and heavy rare earth profiles distinct from Jiangxi — including higher proportions of europium and samarium alongside dysprosium and terbium. The January 2024 transfer tightened China Rare Earth Group’s grip on southern output, reducing the number of independent provincial operators. See the terbium price tracker for heavy rare earth market benchmarks relevant to this group’s output.

4. Xiamen Tungsten Co., Ltd. (600549.SH)

Xiamen Tungsten is the most technically diversified company on this list, operating across rare earths, tungsten, and battery materials under a registered capital of CN¥1.42 billion. Its rare earth business spans NdFeB magnet production, rare earth smelting and separation, and functional materials. A separately listed battery materials subsidiary (688778.SH on the STAR Market) handles lithium-ion battery cathode materials, making Xiamen Tungsten one of the few Chinese companies with material exposure to both the magnet and battery supply chains simultaneously.

The company has international legal visibility: the 2020 Tan Hongjin trade secrets case in the United States referenced Xiamen Tungsten in court documents in connection with alleged intellectual property theft, though the company itself was not charged. Western procurement teams tracking supply chain compliance risk should note this as a factor in due diligence, not as a finding of wrongdoing. Xiamen Tungsten’s strategic positioning at the intersection of magnets, battery materials, and tungsten gives it an unusual risk and opportunity profile among Chinese rare earth companies.

5. Shenghe Resources Holding Co., Ltd. (600392.SH)

Shenghe Resources is the most internationally embedded Chinese rare earth company — and arguably the most geopolitically significant for Western supply chain watchers. Its 7.7% equity stake in MP Materials (NYSE: MP), combined with a long-term offtake agreement covering Mountain Pass concentrate, gives Shenghe a direct financial interest in the primary US rare earth mining operation. That relationship has been under scrutiny from US regulators, and any renegotiation of the offtake terms would have material implications for both companies.

Beyond Mountain Pass, Shenghe holds a 90% stake in Vietnam Rare Earth Co. and a 9.4% position in Greenland Minerals (ASX: GGG), giving it the broadest geographic footprint of any company on this list. Domestic operations span Sichuan and Jiangxi. Registered capital is CN¥1.75 billion. For rare earth producers and investors tracking the intersection of Chinese capital and Western mining assets, Shenghe is the primary case study.

....MUCH MORE 

'Ol 600111 was a favorite name (before the name change)—along with pre-bankruptcy MP—back in the 2009 - 2011 glory days:

November 2010 - Rare Earth: Inner Mongolia Baotou Steel Rare Earth Hi Tech Co. Ltd. Reports 369% Increase in Q3 Net (600111 Shanghai)

This is the big dog.
And one that the Chinese government says will be on top of the mandated industry consolidation...

With a Name Like Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., it has to be good ( 600111:Shanghai)

 Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., Ltd. UP 10% Wednesday (600111: Shanghai)

  

China: Ministry of Industry and Information Technology "Encouraging Consolidation In Rare Earth Sector"

  

"Mining hordes invade Mongolia, the 'Kuwait of Central Asia'" and "Hong Kong a good market for Mongolian IPOs" 

Chinese Rare Earth Stocks Limit Up in Weak Chinese Markets

And man, many more for both 600111 and MP. 

How the 2011 Chinese Rare Earth Quotas Were Allocated

We see our old pal Inner Mongolia Baotou Steel Rare Earth Hi-Tech Company Ltd. is only fifth in the allocations.
We have so many posts on rare earths that it is easier for the reader to use one of the 'search blog' boxes, keyword rare earth.

From Technology Metals Research:

On December 28, 2010 the Chinese Ministry of Commerce announced the allocation of rare-earth export quotas to individual companies operating in China, for the first half of 2011. Including a provisional allocation of a small export quota likely to be awarded in March 2011, the total allocation for H1-2011 is 14,508 t of rare-earth materials. As previously mentioned at TMR, there was some initial confusion in the subsequent press reports on the numbers associated with the announcement – or more specifically comparisons with H1-2011 figures.

The individual allocations of quotas are listed in the table below, divided into lists for Chinese- and foreign-owned companies. The two lists are sorted from highest-to-lowest allocation. It can be seen that the rare-earth enterprises operated by Rhodia (Baotou Rhodia Rare Earth Company and Liyang Rhodia Rare Earth New Materials Company) and Neo Material Technologies (Zibo Jiahua Advanced Material Resources Company and Jiangyin Jiahua Advanced Material Resources Company) received between them the majority of quota allocations for foreign-owned companies, operating in China.

The original announcement was published on the Ministry’s Web site, in the Chinese language (naturally). Associated English language versions, picked up and reported on by the mainstream media, neglected to include some interesting details on how the allocations were made to the individual companies.

Allocation of rare-earth export quotas to individual companies in China, for H1-2011. Source: Chinese Ministry of Commerce

Exporting Company: Chinese-Owned	Allocation (tonnes)
Baotou Huamei Rare Earth Hi-Tech Company	954
Inner Mongolia Baogang Hefa Rare Earth Company	750
Leshan Shenghe Rare Earth Technology Company	750
China Minmetals Corporation	747
Inner Mongolia Baotou Steel Rare Earth Hi-Tech Company	740
Shandong Pengyu Industrial Company	709
Gansu Rare Earth New Materials Company	689
Yiyang Hongyuan Rare Earth Company	594
Sinosteel Corporation	584
China Nonferrous Import-Export Company Jiangsu Branch	493
Jiangxi Golden Century Advanced Materials Company	432
Guangdong Rising Nonferrous Metals Group Company	431
Xuzhou Jinshi Pengyuan Rare Earth Materials Company	410
Jiangxi South Rare Earths Hi-Tech Company	401
Ganzhou Chenguang Rare Earth New Materials Company	374
Grirem Advanced Materials Company	333
Ganzhou Qiandong Rare Earth Group Company	329
Funing Rare Earth Industry Company	327
Jiangsu Geo Quin Nano Rare Earth Company	251
Changshu Shengchang Rare Earth Smelting Company	196
Guangdong Zhujiang Rare Earth Company	166
Ganxian Hongjin Rare Earth Company	102
Exporting Company: Foreign-Owned	Allocation (tonnes)
Baotou Rhodia Rare Earth Company	867
Zibo Jiahua Advanced Material Resources Company	805
Jiangyin Jiahua Advanced Material Resources Company	481
Yixing Xinwei Leeshing Rare Earth Company	440
Liyang Rhodia Rare Earth New Materials Company	324
Huhhot Rongxin New Metal Smelting Company	296
Baotou Tianjiao Seimi Rare Earth Polishing Powder Company	251
Baotou Santoku Battery Materials Company	127
Baotou Huaxin Smelting Company	93
Pingyuan Sanxie Rare Earth Smelting Company*	62
Sub-Total: Chinese-Owned	10,762
Sub-Total: Foreign-Owned	3,746
Total for H1-2011	14,508

* The quota allocated to Pingyuan Sanxie Rare Earth Smelting Company is provisional, and will only be allocated once its infrastructure improvements have been inspected and approved by a local regulatory agency in March 2011.

...MORE

"Australia rare-earth stocks soar as China clamps down on exports"

Lynas is our preferred rare earth name, despite MP getting most of the attention (and U.S. government money). 

From Nikkei Asia, March 27: 

Market cap triples in year for Lynas, largest rare-earth separator outside China, on Japan, US deals 

Rare-earth stocks in Australia have risen sharply over the past year amid growing demand from sources other than China for the metals, found in everything from mobile phones and cars to modern weapons.

Lynas Rare Earths, the world's largest commercial rare-earth separator outside China, announced this month it had locked in purchase price guarantees with a joint venture co-owned by Japanese trading house Sojitz. It marks the first time a Japanese client has committed to a price floor for a rare-earth deal.

"The implementation of fair market pricing will reduce price volatility for Lynas and enable continued growth and investment in our operations," Lynas CEO Amanda Lacaze said in a press release.

The sides have agreed to a minimum price of $110 per kilogram for neodymium-praseodymium, which is used to make magnets for vehicles, among other applications. Lynas is entering into a similar deal with the U.S. Defense Department.

Lynas' market capitalization reached 20 billion Australian dollars ($14 billion) as of Friday, roughly tripling in value over 12 months. The company has surpassed the $9.4 billion market cap of its largest U.S. rival, MP Materials, and is gaining ground on China Northern Rare Earth Group High-Tech, the biggest Chinese player with a market cap of $24 billion....

....MUCH MORE, an excellent overview. 

China Northern is an old friend formerly known as "Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., Ltd." As noted in a 2024 post on Baidu: 

....China has a communist government, they pick winners and losers in business, that's what communists do.

We first became aware of how important this understanding is in the case of the Chinese rare earth companies. Here's a snip from a 2009 post, "Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., Ltd. UP 10% Wednesday (600111: Shanghai)", this is a couple years before the twenty-tweens rare earth mania:

....China's moves to tighten control on the mining and export of a class of metal ores called rare earth are aimed at attracting high-tech manufacturing to Inner Mongolia, and not at dominating the market, a senior Chinese official said.

Wednesday's comments by Zhao Shuanglin, vice chairman of Inner Mongolia Autonomous Region, appear aimed at quelling concerns that China is trying to dominate the global market for rare-earth resources, used in some environmentally friendly technologies. Rare-earth metals greatly improve batteries made for hybrid cars....

...China also is taking steps to consolidate its rare-earth industry. Mr. Zhao, who said he runs the region's industrial policy, said Inner Mongolia Baotou Steel Rare Earth Hi-Tech Co. would lead that consolidation. The move is aimed at creating a group of rare-earth miners and processors in the region's western parts. Inner Mongolia Baotou Steel Rare Earth's stock rose 7.6% in Shanghai trading Wednesday.

"Most of the consolidation is complete," Mr. Zhao said. "We want to build Baotou into an international rare earth production base."....

By November 2010 the story was:
"Rare Earth: Inner Mongolia Baotou Steel Rare Earth Hi Tech Co. Ltd. Reports 369% Increase in Q3 Net":

This is the big dog.
And one that the Chinese government says will be on top of the mandated industry consolidation.

IMBSREHTCL was chosen to succeed.

In the case of artificial intelligence it was apparent by 2017 that Baidu, known in the West as a search engine, was the anointed one for machine learning and such.

Some more 2009 posts on "IMBSREHTCL":

• With a Name Like Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., it has to be good ( 600111:Shanghai)
• "Why, Just the Other Day I was Talking About Inner Mongolia Baotou Steel Rare Earth Hi-Tech Co." Canadian Solar Gets 500MW Project (600111: Shanghai)
• Wind/Rare Earth Metals: "China Non-Ferrous Barred From Taking Control of Lynas" And: "China Investment Corp to launch own rare earth mining firm"

Again, years before the mania and "Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., Ltd." being on everyone's lips and our chosen tagline coming from one of the best books on investing ever written:

"...Words like 'uranium', 'rare earths', etc. seem to be magic to

 those unsuspecting who are often fleeced..."

Gerald M. Loeb

The Battle for Investment Survival

Simon & Schuster, 1935

"Chinese Rare-Earth Stocks Keep Gaining on Signs of Easing Tensions With U.S."

From Dow Jones via MarketWatch, June 11:

Shares of a major Chinese rare-earths company surged after it secured permits from Beijing to export to countries including the U.S., fueling optimism that tensions between Beijing and Washington are de-escalating.

JL Mag Rare-Earth's stock closed 7.9% higher on the Shenzhen Stock Exchange on Wednesday, and advanced 1.75% in Hong Kong.

The rare-earths magnet maker said Wednesday via an investor-relations platform that it obtained permits to ship its products to the U.S., Europe and Southeast Asia, among other regions.

That followed an announcement over the weekend from Chinese officials saying they had approved some export applications for rare-earths-related products....

....MUCH MORE 

China Northern Rare Earth which we introduced to our readers all those years ago (May 8, 2009, 11:57 AM PDT) when it was Inner Mongolia Baotou Steel Rare Earth Hi Tech Co. Ltd. also got a mention. As well it should. November 2010:

This is the big dog.
And one that the Chinese government says will be on top of the mandated industry consolidation. 

And from WireScreen.ai:

The Top Companies Behind the Rare Earth Industry 

1. China Northern Rare Earth (Group) High-Tech Company Limited

• Registered location: Inner Mongolia
• Registered capital: CN¥3.62B
• Year incorporated: 1997
• China Northern Rare Earth Group High-Tech ("Northern Rare Earth") is a manufacturer and distributor of refined rare earth products, deep-processed rare earth products and advanced rare earth materials. Northern Rare Earth has built the world's largest production base for rare earth raw materials and a manufacturing base for rare earth functional materials. Northern Rare Earth's products include earth salts, rare earth magnetic metals, rare earth application products such as materials for power batteries and LED lamp beads. The company mines at the Baiyun Obo rare earths field which is controlled by Baotou Iron and Steel Group. China North Rare Earth was built on Baotou Steel 8861 Rare Earth Experimental Plant, which was established in 1961.

 ....MUCH MORE, including a handy graphic

If interested here are our posts on 600111 - Shanghai:

https://climateerinvest.blogspot.com/search?q=600111&max-results=20&by-date=true 

Although all the posts are interesting—naturellement, the top second one sort of sticks out as encapsulating what's what.

"Japan’s global rare earths quest holds lessons for the US and Europe"

The thing that stood out at the time was how open-minded the Japanese were about potential sources. If the scientists said they thought they could recover rare earths from sewage, the government said "Go find out" From offshore deposits? Ditto.*

From Quartz, April 22, 2021

In 2010, the Japanese government had a rude wakeup call: Beijing had abruptly cut off all rare earth exports to Japan over a fishing trawler dispute. Tokyo was almost entirely dependent on China for the critical metals, and the embargo exposed this acute vulnerability.

The silver lining to this incident, which sent global rare earth prices skyrocketing before they crashed down as the speculative bubble popped, is that it forced Japan to rethink its critical raw materials policy. A decade on, it has significantly reduced its dependance on China for rare earths, and continues to diversify its supply chain by investing in projects around the world. Its model may have lessons for the US, which desperately wants to break China’s rare earths monopoly. Rare earths are a group of 17 metals that are crucial in the manufacturing of high-tech products.

“Japan experienced what the US faces now: a political conflict with China, in which China seems to be willing to exploit its dominance in the [rare earths] market,” wrote Marc Schmid, who researches rare earths at the Martin Luther University Halle-Wittenberg. “The US appears to be in a similar vulnerable position as Japan was about a decade ago.”

A state-led, global quest

Central to Japan’s rare earths procurement strategy is the Japan Oil, Gas and Metals National Corporation, or Jogmec, a state-backed company governed by the ministry of economy, trade, and industry. Though Jogmec was established in 2004 through the merger of two decades-old oil and metals mining entities, it was only after China’s embargo that it turned its attention to rare earths, said Nabeel Mancheri, secretary-general of the Brussels-based Rare Earth Industry Association: “The focus started from the 2010 crisis.”

A key prong of Jogmec’s strategy was to diversify Japan’s supplies. That meant investing in and partnering with rare earths companies around the world starting soon after the Chinese embargo, including rescuing Australia’s Lynas from collapse, in order to build a wider portfolio of suppliers. It also supports efforts to recycle rare earths, as well as research to develop rare earth substitutes. That strategy has been largely successful: Japan slashed rare earth supplies from China from over 90% of imports to 58% within a decade, according to UN Comtrade data. It aims to bring that below 50% by 2025.

As the global shift to electric vehicles and renewable energy is expected to drive a surge in rare earth demand, Japan is set to further increase funding for the exploration and mining of rare earths, according to Nikkei. One consideration is to lift the current 50% cap on state funding for resource exploration projects, which could ease the private sector’s financial burden in inherently risky mining projects.

Industry experts say Japan’s example illustrates the importance of targeted state-led investment in the rare earths sector. Through Jogmec, Japan could direct substantial government funds to support different mining projects, and secure rights to a certain amount of rare earths in what’s known as offtake agreements. Often, that means Japan is able to lock in a specified quantity of rare earth imports over a designated time frame. That also stabilizes the volume and price of supplies, which is important for the sustainability of downstream manufacturers that use rare earth materials to produce batteries and magnets that go into things like electric vehicles and wind turbines.

For instance, Jogmec and top Japanese trading firm Sojitz invested $250 million in Lynas in 2011 in return for a steady supply of rare earths. The loan terms were restructured in 2016 to keep the ailing Lynas from going bust, and restructured again in 2019 to ensure Japan gets “priority supply” of its rare earths through 2038....

....MUCH MORE

 Some of our posts at the time:

October 2010:

"Japan Scrambles for Rare Earth" (AVL.TO; LYC.AX; MCP) 600111: Shanghai

June 2012  

Japan Makes Huge Rare Earth Find

Japan has taken the rare earth sector very seriously since prices spiked ten-fold a couple years ago, some of our links are below the jump.
From the WSJ's Japan Real Time blog:

Clear As Mud: The Answer to Japan’s Rare Earth Concerns

Amid mud on the seabed 2,000 kilometers from Tokyo, Japan may have found the answer to its rare-earth supply concerns for centuries to come.

For the first time, Japanese explorers have discovered large deposits of rare-earth minerals on the ocean floor within the country’s exclusive economic zone.

The researchers estimate about 6.8 million metric tons of rare earth minerals, including dysprosium, exist in the mud across a 1,000-square-meter seabed near Japan’s easternmost island, Minami-torishima, about 2,000 kilometers southeast of Tokyo.

The volume is impressive: The recoverable minerals could be enough to supply Japan’s rare earth metal consumption for at least 200 years, team leader Yasuhiro Kato, an earth sciences professor at Tokyo University, said on Friday.

The underwater discovery of the minerals – a centerpiece in rising global trade tensions with China – could be a valuable boon for Japan. In March, Asia’s second-largest economy joined an international trade action lodged by the U.S. and European Union against China, which produces more than 95% of the world’s rare earth supplies over curbed exports of the minerals....MORE

Previously:
Oct. 2010 
"Japan Scrambles for Rare Earth" (AVL.TO; LYC.AX; MCP) 600111: Shanghai
Oct. 2010 
"Japan's rare earth minerals may run out by March" and Japan to Mine Sewage Sludge, E-Waste for Precious and REE Metals
July 2011 
Rare Earths: Japan Finds Huge Undersea Deposits; German Industry Dubious; Stocks Droop (AVL; MCP; REE)

Stocks trade generally mournful and reflective.
In early premartket, Molycorp is down, $1.54 (2.57%) at $58.30, Rare Element is down 2.65% at $10.64 and Avalon is down 2.92%
Auspicious update, below.

Sept. 2011 
Predictions: Rare Earth Demand 2015-2020 (MCP; REE; AVL)

Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., Ltd. UP 10% Wednesday (600111: Shanghai)

Here's the six month chart, the stock is right at resistance, from Yahoo Finance:

Here are some of the recent articles, first up, the Wall Street Journal:

China says it seeks business for Inner Mongolia

China's moves to tighten control on the mining and export of a class of metal ores called rare earth are aimed at attracting high-tech manufacturing to Inner Mongolia, and not at dominating the market, a senior Chinese official said.

Wednesday's comments by Zhao Shuanglin, vice chairman of Inner Mongolia Autonomous Region, appear aimed at quelling concerns that China is trying to dominate the global market for rare-earth resources, used in some environmentally friendly technologies. Rare-earth metals greatly improve batteries made for hybrid cars....

...China also is taking steps to consolidate its rare-earth industry. Mr. Zhao, who said he runs the region's industrial policy, said Inner Mongolia Baotou Steel Rare Earth Hi-Tech Co. would lead that consolidation. The move is aimed at creating a group of rare-earth miners and processors in the region's western parts. Inner Mongolia Baotou Steel Rare Earth's stock rose 7.6% in Shanghai trading Wednesday.

"Most of the consolidation is complete," Mr. Zhao said. "We want to build Baotou into an international rare earth production base."

Rare-earth resources haven't been well developed in major markets like the U.S., where rare-earth concentrates are significantly mined in only one deposit, in Mountain Pass, California.

Japanese firms including Sumitomo Corp. and Toyota Motor Corp. have already begun to develop alternative sources of rare earth in Kazakhstan and Vietnam....

From Bloomberg:

China Considers Rare-Earth Reserve in Inner Mongolia (Update2)

China, holder of the world’s largest rare-earths deposits, may build a strategic reserve in Inner Mongolia, strengthening its control over materials used in technology ranging from iPods to guided missiles.

Inner Mongolia, which contains 75 percent of China’s deposits, is in talks with the central government to build stockpiles to support prices, Zhao Shuanglian, deputy chief of the province, said at a press conference today in Beijing.

China, which imports most of its iron ore, oil and copper, is tightening control over supplies of rare earths, a range of more than 15 elements such as scandium and lanthanum. Shares in Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., the main producer in the province, surged 7.6 percent in Shanghai trading today after Zhao said the company will take over smaller rivals to consolidate the industry.

“The plan of building a national reserve stockpile is part of a government-level strategy to protect the resources of rare earths and prevent it from being sold cheaply,” Liu Minda, analyst at Huatai Securities Co., said by phone from Nanjing....

...Baotou Steel Rare-Earth rose 7.6 percent to close at 22.30 yuan in Shanghai after Zhao announced plans for mergers of rare- earth companies. The stock has tripled this year, compared with a 48 percent gain of the benchmark Shanghai Composite Index.

“The purpose of the consolidation is to use Baotou as the head of a conglomerate that can create a certain economy of scale in the industry,” Zhao said...

The Financial Times:

Fears China to tighten grip on rare minerals

...Foreign suspicions of Beijing’s plans for world domination of rare earths have been fed by comments from no less than Deng Xiaoping, the former Chinese leader who said in 1992 that while the Mideast had oil, China had rare earths.

But foreign and Chinese industry sources doubt Beijing’s dominant goal is to create an Opec-like price cartel. After flooding the world market with cheap rare earths for more than a decade, Beijing now wants to ensure that it has the materials it needs to feed its own growing ambitions to build advanced and green technology industries such as electric vehicles.

Inner Mongolia, which contains 75 per cent of China’s rare earth deposits, said earlier this week that it wanted to build a strategic reserve of rare earths to stabilise prices. It also wants to consolidate the local industry. The aim, according to Inner Mongolia officials, is to conserve reserves and attract more users to set up manufacturing plants in Inner Mongolia.

Rare earths have been sold too cheaply, and some traders have sold supplies illegally overseas, threatening domestic supplies and causing over-exploitation and environmental problems, according to an official of the Chinese Society of Rare Earths.

Just cutting production, without a strategic reserve to boost price, will be hard for central government, because that will hurt profits of some state-owned firms and local governments, analysts say....

Rare Earth Metals on PBS's NewsHour and "Rare Earths strategic supplies more important than price" (AVL.TO; GWG[TSXV]; NEM.TO; RES.V)

I watched this segment a couple days ago and thought "This is about as mainstream as I care for the subject to get".
Here's their piece "Are Rare Earth Minerals Too Costly for Environment?":


Here are some quotes from the transcript:

"But, without rare earth, Copenhagen means nothing. You buy a Prius hybrid car and think you're saving the planet. But each motor contains a kilo of neodymium and each battery more than 10 kilos of lanthanum, rare earth elements from China."

"MARK SMITH, CEO, Molycorp Minerals: If the purpose is to lower our dependence on foreign oil, and all We're doing is asking that we put hybrid cars on the road that need Chinese rare earth materials, aren't we changing, you know, inter-trading one dependence for another?"

"...ZHAO ZENGQI: Although China has the largest reserves, we only have 50 percent of global deposits. We are supplying too much rare earth, and it's not sustainable, so we must restrict export.

LINDSEY HILSUM: The writing on the wall says: Become the leader of the world in rare earth industry.

But China can't produce enough for everyone anymore, and if governments are serious about low-carbon technologies, other countries will have to start producing.

MARK SMITH: I think that, if we don't get a couple of projects up and running very, very quickly, there's going to be very severe shortage of rare earths in the world, and all of these clean-energy technologies that we're legislating and trying to implement through policy changes are not going to be possible...."

And from Mineweb:

With China, which currently controls or produces virtually all global rare earths metals supplies, needing these for its own industries and limiting supplies, Jack Lifton reckons the West needs to consider its own production options, even if pricier to mine and process.

"Price may not be as important as security of supply [for Rare Earth metals]" says Jack Lifton, an independent consultant with more than 45 years of experience in sourcing nonferrous strategic metals. In the U.S., our dependence on rare metals is undermined by the simple fact that we're not producing any. Given that China now controls 95% of these 'technology metals' and the world is projected to eat 200,000 tons of rare earth metals near 2015, we need to jumpstart our own domestic supply chain and, more importantly, build the refineries to process them-rather than sending them to China for refining, which is our only option currently.

The Gold Report: Jack, we hear you're starting on a documentary, "On the Green Road." Tell us a bit about it, and what you mean by "Green Road."

Jack Lifton: I came up with that title because no matter what the attitude of the individual is towards being "green," there really isn't any other path for us now. My proposed documentary "On the Green Road" will follow the path that a rare earth metal takes from the mine to the market, so that the consumer can see the necessary steps required to make the technological devices upon which our quality of life depends. If the Green Road is the path to the future we need to get on it and stay on it right now.

Six hundred million people in the Western world are enjoying a life increasingly dominated by technology that we don't understand. In particular, we don't understand how it is made. What I see in America is a reluctance to admit that the green road starts in the black earth. We have to mine and refine the minerals and metals into forms which can then be fabricated into forms which can then be made into parts which can then be assembled into the technology devices we use to conserve energy. Everything starts at the mine or at the oil or gas well.

In the West, electronic devices using electricity produced by a huge network of generating devices control our transportation, communication, and our environment. We've got a grid that we talk about as if we understand it, but it's an extremely complicated system. We ignore the fact that we produce and distribute oil and its by-products, metals and their compounds and alloys. Nobody pays attention to that. All we do is say we've got to stop doing this and stop doing that. We have to start educating everyone as to how a metal becomes a radio or how a metal becomes a battery, how a battery propels a car.

TGR: I heard you speak recently at the Hard Assets Conference about supply issues in terms of expanding wind and solar technologies. Can you explain some of those supply constraints?

JL: Yes. In the United States, Canada, and Western Europe we are consuming most of the supplies of the technology metals. Now we're facing six billion people in the rest of the world whose standard of living is growing rapidly and we do not have ten times the amount of materials used to create the good life in the West to create the same standard of living for the entire world.

I don't mean to be a doomsayer, but if the Chinese government wants its own people to have the standard of living that people in Los Angeles have today, it's going to mean that China must use all of its own natural resources to improve its standard of living and its quality of life, which will mean that our standard of living will have to decline. Why? Because there are some materials-for example, the rare earths-that China controls 100% of the supply of today. And as China's economy is growing, China is requiring more and more of these materials for its own domestic economy.

Ten years ago China exported 75% of its production of rare earth metals to the rest of the world. Today it exports less than 25%, even though the production in the last 10 years has more than doubled. So that should tell you what's going on here. This is not a conflict. This is economic reality....MUCH MORE

When we started posting on rare earths they were a curiosity for the general public. No more.
Here are some of our posts:

Shortage of Rare Metals for Hybrids Is Overblown

No one said there was a shortage. The question is geopolitical and strategic. It is the same situation with lithium. There isn't a shortage in the foreseeable future. In Li, The potential problem arises from the fact that Evo Morales controls half the world's known reserves of lithium. The calculus of signing agreements with him is closer to that required when dealing with Hugo Chavez than that required when dealing with the Japanese....

Canadian Firms Step Up Search for Rare-Earth Metals (AVL.TO; GWG[TSXV]; NEM.TO; RES.V)

These are EXTREMELY speculative issues that have had big run-ups since the rare earths began* to be spoken of in polite company. Be careful out there....

Wind/Rare Earth Metals: "China Non-Ferrous Barred From Taking Control of Lynas" And: "China Investment Corp to launch own rare earth mining firm"
Wind: Why rare earth metals matter
China tightens grip on rare earths
With a Name Like Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., it has to be good ( 600111:Shanghai)
Rare Earth Metals: "California metal mine regains luster" (GS)
Molycorp May Invest $400 Million to Expand Rare-Earths Mine
Wind: "China, Japan on collision course over rare-earth metals"
Wind: China to support three domestic enterprises for rare earth development. And: Baotou Steel Rare-Earth net loss hits $9.83 mln in H1
Rare earths offer unique investment opportunity

And many more.

"Xi Jinping visits China rare earth plant amid talk of use as trade war weapon "

We have some experience with the rare earth equities.

"...Words like "uranium", "rare earths", etc. seem to be magic to

 those unsuspecting who are often fleeced..."

Gerald M. Loeb

The Battle for Investment Survival

Simon & Schuster, 1935

Back in May 2009 when, for the wider public the group of elements were just industrial curiosities we posted:
China tightens grip on rare earths

and:
With a Name Like Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., it has to be good
( 600111:Shanghai)

Regarding the only U.S. producer we had three triples here on the blog, live, in real time, short and long.
From the July 2010 IPO:
"Rare Earth Metals: Molycorp IPO Very Weak (MCP)"

To June 2015's
Rare Earth: Largest U.S. Producer, Molycorp Has Filed For Bankruptcy Protection (MCPIQ)

Oh we had fun with this one.
We posted on it pretty much from Tombstone to tombstone.*
There are a lot of lessons for commodity investors wrapped up in this tale.
And for equity investors as well. The stock went from being part of Goldman Sach's odds & sods ends bin to "UPDATED-Rare Earth: "Molycorp Looks Like One Of The Greatest Private Equity Deals Ever" (MCP)" 

And along the way looked at other...ahhh....opportunities:
Luxembourg-based Rare Earth Company Hoping to Mine in South Africa by 2014 Does Oversubscribed IPO in Toronto (FRO.tsx)
Alrighty then....

So yes, some experience.

From the South China Morning Post:
42 minutes ago

• China produces 90 per cent of the world’s rare earth minerals, used in hi-tech production such as electric vehicles
• Rare earth minerals one of the few goods not hit by incoming US tariffs on US$300 billion of Chinese goods as trade war escalates

Chinese President Xi Jinping visited one of the country’s major rare earth mining and processing facilities on Monday, in his first domestic tour since the recent escalation of the US-China trade war.

Xi’s visit, reported by the official Xinhua news agency, comes amid growing discussion in China that Beijing could consider banning the export of such minerals as a weapon in the trade war with the United States.

Rare earth minerals were among the few items excluded from the latest US government plans to implement tariffs on almost all of China’s remaining exports to the United States, highlighting their strategic importance. These tariffs, which are set to be levied on Chinese goods worth an estimated US$300 billion, could go into effect as early as July, according to the Office of the US Trade Representative.

The state media report, which includes one sentence of text and two pictures, made no mention of the trade war, but speculation is mounting that rare earth minerals could form a key part of China’s retaliation.

China is the world’s largest producer and exporter of rare earth minerals, which contain at least one of the 17 rare earth elements, many of which are vital to a number of low-carbon technologies, such as high-performance magnets and electronics.

It accounts for 90 per cent of global production, however the government has been carefully managing mining levels and it was reported last year that amid production quotas, the country became a net importer of rare earth minerals last year.

Jin Canrong, a professor of international relations at Renmin University in Beijing, wrote an article last week suggesting that China could ban rare earth exports to the US as a way to punish the US for

imposing additional tariffs

. China does not import enough goods from the US to retaliate in pure tariff terms.

The Chinese government has weaponised the trade of rare earth exports before, slashing the export quota by 40 per cent in 2010. The US, Japan and the European Union filed a compliant against the Chinese quota at the World Trade Organisation in 2012, with the WTO ruling against China. Beijing dropped its export restrictions in 2015.

According to the report, Xi visited JL Mag Rare Earth Co, a major rare earth processing company based in Ganzhou, Jiangxi province and “studied” the local rare earth industry. Ganzhou is the heartland of China’s rare earth mining and processing industry....MORE

The last time China withheld production prices exploded, the issue went to the World Trade Organization, the WTO ruled in March 2014 that China's actions were blatantly in violation of the terms of trade China agreed to upon accession to the WTO in 2001, China acquiesced, began flooding the market with product, prices crashed and the prophecy of December 28, 2010 was  fulfilled:

...My short side radar is starting to glow. The perfect play for the Chinese would be to maintain a very tight supply to Japan and the West until MCP, Lynas and REE go into production and then crash the market.

There is currently no way to figure discounted cash flow values for these mines so folks are taking proven, probable and even possible reserve numbers, multiplying by their favorite integer and then forgetting to discount back. That spells opportunity to those panthers sharp enough to wait patiently in the tree until the moment comes to pounce....

Today there are two western miners that are producing, one of them is in trouble and I can't help thinking about a joke from the 1986 oil price collapse, when WTI dropped below $9.85 from $23.30 six months earlier and $35 in 1981: 

Investor: I'm getting nervous, I'm hearing bankruptcy rumors about everybody in the patch, how slow is it? 

 Oil CEO: Well, we're down to two hookers, and one of them's a virgin. 

 Investor: Oh. 

The one that isn't in trouble (except for the Chinese leaning on Malaysia to shut 'em down) is Lynas, a trade we've been thinking about for almost a year but just waiting, like the panther, for the moment to pounce, biding our time, like the panther waiting....just a little bit closer and....
Okay, maybe not really waiting to pounce, maybe waiting for something to land within a few inches.
So I don't over-exert myself:

LYC.AX 1.9750-0.0250 (-1.25%)

Risky as hell and overpriced because Wesfarmers made a rejected takeover bid and the punters have hope but still the only Western source worth looking at right now.

"China wants role in US-Vietnam rare earths plan"

From Asia Times, December 17:

Chinese pundits say Vietnam should not directly export rare earths but send them to the PRC for processing  

Following the conclusion of President Xi Jinping’s Hanoi trip earlier this week, China has claimed itself to be Vietnam’s best choice for trade and diplomatic partnerships in the Asia Pacific region.

Perhaps, but the proof will be in the pudding. Will Vietnam directly export its rare earths, as the US hopes, or send them for processing in China? Chinese pundits want to know. They also want to know whether Hanoi will lease a military port to Washington.

On Wednesday, China and Vietnam signed 36 agreements, covering the Belt and Road Initiative, development cooperation, digital economy, green development, transportation, inspection and quarantine, defense and law enforcement and maritime cooperation. But Vietnamese media said Beijing and Hanoi have failed to reach agreements on nine other issues, including metals and rare earths mining. 

During his own trip to Hanoi in September, US President Joe Biden signed deals with Vietnam on semiconductors and rare earths. He encouraged US investment in rare earth exploration in Vietnam – which is ranked third in the world in its rare earths potential – to counter China’s world domination of the minerals.

Rare earths
Some Chinese pundits said China will boost trade and investments with Vietnam as long as Hanoi continues to maintain a good relationship with Beijing. They said if Vietnam is going to use US investment to explore its rare earth reserves, it should consider shipping the deposits to China for refining....

....MUCH MORE

That sounds vaguely menacing. Probably because there is a steel fist behind the velvet glove.

Previously:
"A tiger economy starts to roar in Vietnam" (except for the rare earth industry corruption)

"Rare earths magnet firms turn to Vietnam in China hedge"
Well it's about time.*

*****

*We've been touting Vietnam for a few years and gathered some of the older links in May, 14, 2023's "Vietnam boosts rare earths output by tenfold – data":

Recently:
Rare Earth Feedstock Deficit For Neodymium Magnets Forecast To Reach 60,000 Tonnes Annually Within 7 Years 

And as noted in "Rare Earths: Reminder, Combined Brazilian and Vietnamese Resource Base Approximately Equals China's Proven and Probable Reserves":
Mining the stuff is relatively straightforward. The huge difference is that Brazil and Vietnam do not have the refining and fabricating infrastructure that China does....

 And 2021's "Europe’s Rare Earth Dependency Dilemma":

....As I've been babbling for the last few years: Vietnam!

Here's the US Geological Survey's Mineral Commodity Survey - Rare Earths - 2021:

                 Reserves
Brazil      21,000,000
China      44,000,000
Vietnam  22,000,000

[Data in metric tons of rare-earth-oxide (REO) equivalent content unless otherwise noted] 

You will note that Vietnam and Brazil's combined resource roughly equals China's....

And July 2020's "Digging in on rare earth, the next front in the US supply chain war with China":

Letting China take over the world's pharmaceutical and medical manufacturing over the last 25 years was pretty damn stupid.
Ditto for rare earth supply/
The stuff is everywhere, Vietnam's undeveloped rare earth resource base is tied with Brazil for #2 in the world (combined they match China).
The risk Vietnam poses to China's lock on rare earth prices  has suddenly gotten very interesting.
It has to be developed though....

And June 2019
Vietnam Rising: "US-China trade war pushing Vietnam’s manufacturing industry to capacity"

A major piece on the country The Diplomat says will be the testing ground for China's military, prior to an invasion of Taiwan. See last month's "China Will Attack Vietnam".

Throw in Vietnam's undeveloped rare earth resource base, tied with Brazil for #2 in the world (combined they match China) and the risk it poses to China's lock on prices and Vietnam has suddenly gotten very interesting.
Oh, and China is still smarting from being unable to achieve their goals during the 1979 invasion of Vietnam....

We have some experience with this stuff, both long and short, out in public on the blog for all the world to see. Here's a quote, first used in late 2010 as the last mania was just getting started, from a very good book on investing, that was our lodestone (mining/magnet term) through the last mania.

And a 2015 post looking back to those halcyon days:
Rare earth metals: Objects of power and risk

Just the words, "Rare Earth" brings back memories: “My old MG TC. A blond girl, tan from the summer sun, in the Hamptons, beer on the beach, ‘Unchained Melody,’ the little bar in the Village.”

Uh, wait. That was Adam Smith in our 2012 post  "Adam Smith on Oil Shale (Now with Voodoo Beach Bunnies)". Ahem. Never mind.

Our memories are more like trading Molycorp for three triples, short and long, on the blog, in public, from IPO to bankruptcy or if you will "From tombstone to tombstone".

Or commenting on the passing parade: Luxembourg-based Rare Earth Company Hoping to Mine in South Africa by 2014 Does Oversubscribed IPO in Toronto (FRO.tsx), or quoting one of the, if not the, best books on investing and life:

"...Words like 'uranium', 'rare earths', etc. seem to be magic to

 those unsuspecting who are often fleeced..."

Gerald M. Loeb

The Battle for Investment Survival

Simon & Schuster, 1935

Another 2023 post on rare earths, this one January 14:

"Huge rare earth metals discovery in Arctic Sweden"
They aren't that rare. Just hard to find in the right proportions of the different rare earth elements. And in concentrations high enough to make extraction a paying proposition.

And requiring some technical expertise to fabricate into end products. It's not as if there are neodymium magnets just laying around... 

And in 2022's "Huge rare earth reserve discovered in Turkey, but experts caution that ‘grade is king’"

Not just grade. The composition of a deposit, the amounts of the 17 rare earth elements is critical. As one example, the Mountain Pass mine in the U.S. despite its relatively high grade (8% REEs) is actually not as valuable as some lower grade mines with a more profitable mix.

Additionally, exploitation of a REE resource is highly dependent on processing and supply chain factors that can not quickly be brought into being, it's one thing to have the deposit, quite another to have, for example, the end product, a neodymium magnet.

"Huge rare earth reserve discovered in Turkey, but experts caution that ‘grade is king’"

Not just grade. The composition of a deposit, the amounts of the 17 rare earth elements is critical. As one example, the Mountain Pass mine in the U.S. despite its relatively high grade (8% REEs) is actually not as valuable as some lower grade mines with a more profitable mix.

Additionally, exploitation of a REE resource is highly dependent on processing and supply chain factors that can not quickly be brought into being, it's one thing to have the deposit, quite another to have, for example, the end product, a neodymium magnet.

We have some experience with this stuff, if interested see after the jump.

From MarketWatch, July 7:

The site in the central Anatolia region contains 694 million tons of rare earth reserves, according to a statement from Turkey’s Ministry of Energy and Natural Resources. 

The world’s second-largest rare earth reserve has been discovered in Turkey, officials say, but experts warn that turning rare earth deposits into financial success is easier said than done.

The site in the central Anatolia region contains 694 million tons of rare earth reserves, according to a statement from Turkey’s Ministry of Energy and Natural Resources. The world’s largest rare earth field is an 800-million-ton site in China, officials added.

Rare earth elements are used in a host of industries, from consumer technology to the automotive sector and aviation.

Of the 17 rare earth elements, 10 will be produced at the site, according to Fatih Dönmez, Turkey’s minister of energy and natural resources. “We will process 570,000 tons of ore annually,” he said, in a translated statement. Some 10,000 tons of rare earth oxide will be obtained from the processed ore, Dönmez added. On Friday the minister tweeted that construction of a pilot plant, which will process 1,200 tons of rare earth annually, will be completed later this year.

Experts, however, say that despite their name, rare earths are not so uncommon....

....MUCH MORE

For more background we have hundreds of posts from the last boom, focusing mainly on Molycorp which owned Mountain Pass before it went bankrupt and on the big dog of Chinese mining:

"With a Name Like Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., it has to be good ( 600111:Shanghai)"

The big dog has since changed its name, now China Northern Rare Earth (Group) High-Tech Co.,Ltd but it is still the big dog with the same stock symbol on the Shanghai Stock Exchange: 600111.

Here's a nostalgic 2015 post looking back a half-dacade: 

Rare earth metals: Objects of power and risk

Just the words, "Rare Earth" brings back memories: “My old MG TC. A blond girl, tan from the summer sun, in the Hamptons, beer on the beach, ‘Unchained Melody,’ the little bar in the Village.”

Uh, wait. That was Adam Smith in our 2012 post  "Adam Smith on Oil Shale (Now with Voodoo Beach Bunnies)". Ahem. Never mind.

Our memories are more like trading Molycorp for three triples, short and long, on the blog, in public, from IPO to bankruptcy or if you will "From tombstone to tombstone".

Or commenting on the passing parade: Luxembourg-based Rare Earth Company Hoping to Mine in South Africa by 2014 Does Oversubscribed IPO in Toronto (FRO.tsx), or quoting one of the, if not the, best books on investing and life:

...Words like "uranium", "rare earths", etc. seem to be magic to

 those unsuspecting who are often fleeced...

Gerald M. Loeb

The Battle for Investment Survival

Simon & Schuster, 1935

Good times.

"How Japan Built a Rare-Earth Supply Chain Without China"

From the New York Times, December 8:

The 15-year effort by Japan is a model for countries now scrambling to reduce their dependence on Beijing’s critical metals. 

Sojitz, a Japanese conglomerate, turned to Lynas, an Australian mining company, to build a rare-earth supply chain outside China. Lynas mines in Australia and refines in Malaysia.

The world reacted with alarm this year when Beijing introduced waves of export controls on rare earths, the minerals vital to the manufacturing of everything from cars to advanced electronics. For Japan, the experience felt like déjà vu.

China maintains a near monopoly on the supply of the metals. Japan learned that the hard way in 2010 when China effectively cut it off during a territorial dispute between the countries. Tokyo has since quietly stitched together a supply chain that is considerably less dependent on China. For Japan, that is an important hedge to political risk, as a recent flare-up in tensions between the nations underscores.

As the United States and other nations scramble to secure rare earths outside China and build up their domestic supplies, Japan’s experience provides lessons in how it can be done, according to interviews with current and former government officials, business executives and industry experts in Japan.

“The urgency of the rare-earths situation is just now dawning on the United States and Europe,” said Naoki Kobayashi, an official working in the minerals division of Japan’s trade ministry. “For Japan, this painful lesson came 15 years ago,” he said.

President Trump has said he believes it will take the United States about a year to secure ample rare-earth supplies. But Japan is a case study in how hard it is to pull out of China’s grip — especially its extremely cost competitive rare-earth processing facilities. Experts say such an effort requires both sustained government support and international collaboration.

Supply Shock
In September 2010, a collision near disputed islands between a Chinese fishing trawler and two Japanese Coast Guard vessels escalated into a diplomatic and economic crisis. Japan detained the captain of the Chinese ship, and Beijing, in retaliation, implemented an unannounced, two-month embargo on rare-earth exports.

At first, the significance of China’s move was lost on some Japanese officials.

Tatsuya Terazawa was in charge of economic policy at Japan’s trade ministry in 2010. He recalled that the ministry’s lead auto industry official rushed to his desk, warning that the entire automotive supply chain could be suspended because of the sudden cutoff.

“I had to confess, I had zero knowledge about rare earths,” Mr. Terazawa said. He said his colleague explained that these materials were essential ingredients for the magnets used in motors across Japan’s auto sector. And Japan, like most industrialized nations, had ceded control of this vital supply almost entirely to China.

Mr. Terazawa was responsible for developing the trade ministry’s next suite of economic policies. He compiled a package, worth a little over $1 billion at the time, aimed at reducing Japan’s supply chain vulnerability to rare earths. It included substantial support for Japanese groups to diversify rare-earth sources.

“At the time, I was criticized that I was demanding much more money than necessary,” Mr. Terazawa said. “But I was determined that Japan never repeat this incident.”

Finding Lynas
The timing was, in some ways, opportune. Sojitz, a Japanese conglomerate, and Jogmec, the government body overseeing mineral resource security, were seeking non-Chinese rare-earth options. And Lynas, an Australian mining company, was dealing with financial difficulties.

Lynas was trying to create the world’s first integrated rare-earths supply chain without using China, instead mining the ores in Australia and refining them in Malaysia. But it was struggling to amass the capital it needed to increase production at its Malaysian refining site.

Sojitz had to find sources of rare earths outside China. Without stable supplies, “factories in many places would have to stop operating,” said Kosuke Uemura, the chief executive of Sojitz. At the time, “Lynas was the only option,” he said.

In 2011, Jogmec and Sojitz did a deal that provided $250 million in loans and equity to Lynas. The transaction secured for Japan a long-term supply of rare earths sourced outside China.

Today, in Western Australia, workers on the remote Mount Weld volcanic plug are flown out from Perth on rotations to extract rare-earth ore from an open-pit mine owned by Lynas

The partially purified concentrate is then shipped 5,000 miles to the company’s facility in Kuantan, Malaysia — until this year, the only large-scale rare-earth separation plant operating outside China. There, the materials are refined through a chemical process into individual rare-earth oxides pure enough to use in manufacturing.

From Malaysia, the metals are transported another 3,000 miles to Japan, where Sojitz manages distribution to domestic magnet makers. In Japan, the magnets are used in a number of products, including vehicles produced by automakers like Toyota.

Early Challenges
Japan has significantly bolstered its supply chain resilience. While industry estimates placed Japanese rare-earth imports from China at 90 percent or more during the 2010 trade dispute, that figure now stands closer to 60 percent to 70 percent.

Sojitz received its first large shipments of rare earths from the Malaysia facility in 2012 and has continued to expand the breadth of metals it imports. In October, it added a type of specialized, heat-resistant magnet ingredients to its portfolio.

According to Mr. Uemura, the Sojitz chief executive, the toughest bottleneck was the refining process in Malaysia. The chemical separation of rare earths produces large volumes of acidic waste and thousands of tons of low-level radioactive residue. Proper management and disposal of the waste is expensive and time consuming.

Between 2011 and 2012, the Lynas facility in Malaysia faced months of delays because of fierce local opposition and legal challenges. The facility began operating only after it revised its residue management plan multiple times.

In contrast, Chinese processing factories are often lightly regulated, and some illegally operated, creating toxic waste sites.

As a result, Mr. Uemura said, Sojitz and Lynas have higher costs than Chinese rivals and require public backing. “If we were to compete normally with China, we’d be playing on a different field altogether,” he said. “This gap is absolutely unbridgeable.”

Export Controls
This year, China introduced expansive rare-earth export controls, first in April and again in October, restricting the materials themselves and the processing technology. Beijing’s measures targeted all exports, not just those bound for Japan....

....MUCH MORE 

Some of our posts along the way: 

May 2021 - "Japan’s global rare earths quest holds lessons for the US and Europe"

The thing that stood out at the time was how open-minded the Japanese were about potential sources. If the scientists said they thought they could recover rare earths from sewage, the government said "Go find out" From offshore deposits? Ditto.*

October 2010:

"Japan Scrambles for Rare Earth" (AVL.TO; LYC.AX; MCP) 600111: Shanghai

 

Oct. 2010  

"Japan's rare earth minerals may run out by March" and Japan to Mine Sewage Sludge, E-Waste for Precious and REE Metals 

July 2011 
Rare Earths: Japan Finds Huge Undersea Deposits; German Industry Dubious; Stocks Droop (AVL; MCP; REE)

Stocks trade generally mournful and reflective.
In early premartket, Molycorp is down, $1.54 (2.57%) at $58.30, Rare Element is down 2.65% at $10.64 and Avalon is down 2.92%
Auspicious update, below....

Sept. 2011 
Predictions: Rare Earth Demand 2015-2020 (MCP; REE; AVL)

June 2012 

Japan Makes Huge Rare Earth Find

Japan has taken the rare earth sector very seriously since prices spiked ten-fold a couple years ago, some of our links are below the jump.

July 2021
Japan's Responses In the Event Of A Chinese Attack On Taiwan
You can see Japan's quandary if you follow the islands down to Okinawa and beyond.... 

January 2023
"Japan dives into rare earth mining under the sea"
It's taken them long enough.*

Here's an interesting map from the article, as we've said over the years, Japan has a real interest in who controls Taiwan:

And the reason I said Europe risks becoming a satrapy of China?

Absolutely brutal… 🇺🇸🇪🇺

The EU Commissioner of Industry:

"Last month, I was supposed to go to Brazil to discuss a rare earth mine. 3 days before, we were told that the Americans had already come, put money on the table, and bought all production until 2030." pic.twitter.com/rYLfLJcD0s

— Geiger Capital (@Geiger_Capital) December 9, 2025

The satrapy bit was the outro from December 8's "JPMorgan CEO Jamie Dimon says Europe has a ‘real problem’".