RE: Ukrainians and Russian REE pipe dream7 Mar 2025 06:38
The United States has not yet been able to reduce its dependence on Chinese rare earths for several reasons. First is the nature of U.S. deposits. Despite their name, rare earths are quite common, but their extraction only becomes commercially viable when they reach concentrations of about 2 percent per ton of waste rock, which happens relatively rarely. The United States has about 1.9 million tons of confirmed reserves, while Russia has 3.8 million tons, but both of these figures pale in comparison with China’s 44 million tons. In China, both the total volume and the concentration of these resources per unit of rock are higher.
Second, the extraction and processing of rare earth metals is an incredibly capital-intensive process, requiring at least $500-700 million in initial investment, without taking into account associated activities. At the same time, the prices for many of the elements are fairly volatile, and extraction projects for virtually all other resources have a shorter and easier payback period. This is why 84 percent of all global rare earth projects in 2024 were financed by governments, and not by private companies.
Third, rare earth metals only occur as complex multi-component ores that are very difficult to separate. That process requires specific technologies, in which hardly anyone except China has invested in the last thirty years. The Chinese leadership has always seen rare earth metals as a way to gain access to technology and was ready to pay any price for that, whether financial, social, or environmental. As the former Chinese leader Deng Xiaoping famously said, “The Middle East has oil, and China has rare earth metals.”
Finally, rare earth mining can cause serious environmental damage. The most common way to separate the rare earths for commercial use is to leach them with extremely strong acids. The world's largest deposit, Bayan Obo in China’s Inner Mongolia region, is one of the most polluted places on Earth. The water, air, and soil there are completely contaminated with heavy metals, acids, and radioactive isotopes. Given the obvious social costs of such pollution, until very recently, when relatively clean technologies began to appear, it was all but impossible to develop these industries in Western democracies.
The nature of rare earth metals mining means it is unrealistic for the United States to undertake such work in Russia or Ukraine in both the short and even medium term. I
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