What they're not telling you: With less than three weeks to go the Trump-Xi summit in China, the scramble for leverage and superiority - whether in terms of the Iran war or the just as important supply chain of rare earths - is on. That explains why the Pentagon’s push to get its hands on the rarest of the rare-earth elements leads all the way to this small port city in Malaysia. As the WSJ reports , Australia's Lynas Rare Earths has begun pumping out heavy rare earths, the elusive kind that China dominates.
# THE TAKE: Rare Earth Kabuki Don't celebrate yet. China's "lost monopoly" is theater masking deeper consolidation. Yes, Myanmar, Vietnam, and the U.S. are ramping production. But here's the uncomfortable data: China still controls 70% of *processing*—the actual value extraction. Mining rare earths is commodity extraction. Refining them into usable materials? That's where monopoly power lives. The Trump-Xi summit timing isn't coincidental. This announcement is leverage theater: Washington needs Beijing to believe competition exists before negotiations begin. It doesn't. Not yet. What we're watching is the *illusion* of decoupling. American and allied mines create supply optionality while China retains processing chokehold. It's brilliant asymmetry: let competitors dig holes while you own the refinery. Real disruption requires integrated supply chains outside Chinese control. We're nowhere close. This headline is a negotiating prop, not a market transformation.
What the Documents Show
“No one had made a separated heavy rare earth outside of China in 20 years,” said Amanda Lacaze, Lynas’s chief executive. The company’s chief operating officer, Pol Le Roux, said it had actually been 30 years. When China cut off exports of heavy rare-earth elements during trade tensions last year, automobile factories in the US and Europe were forced to stop production. Now, Lynas is at the vanguard of an effort by the US and allies to prevent Beijing from using its monopoly power to squeeze the rest of the world. To minimize China's monopoly on rare earth supply, the Pentagon has been opening its wallet in unusual ways to ensure supplies.
Follow the Money
In March 2026, Lynas announced a preliminary $96 million deal in which the Pentagon would purchase Lynas’s rare earths. Others are in hot pursuit of the Pentagon's money: Las Vegas-headquartered MP Materials, backed by billions of dollars in U.S. government support, is planning its own refinery for heavy rare earths that is set to come online later this year. And last week, USA Rare Earth announced a "transformative" $2.8 billion acquisition of Brazil's Serra Verde Group, owner of the Pela Ema rare earth mine and processing plant in Goiás, Brazil, which is a "one-of-a-kind asset and the only producer outside Asia capable of supplying all four magnetic rare earths at scale, together with other vital REEs, such as Yttrium." Last month, Lynas began producing samarium oxide , a difficult-to-source rare earth in high military demand that is used in heat-resistant magnets for jet fighters and missiles. “There is no doubt that 2025 was the wake-up call the United States needed to undertake bold industrial policy,” said Gracelin Baskaran, who leads the critical minerals program at the Center for Strategic and International Studies in Washington. Rare-earth minerals are actually not that rare when it comes to mining: it is the refining - usually a very toxic process - that is the bottleneck, which is why China which has zero environmental regulation, has become a global leader in their producftion.
What Else We Know
As the WSJ notes, rare earth minerals are already mined outside of China, including Lynas’s, which come from Western Australia. But to gain independence from Chinese supplies, " the hard part is building refining capacity. It often requires hundreds of stages to separate the rare earths using industrial acids." It often requires hundreds of stages to separate rare earths using industrial acids. Suzanne Lee for WSJ For more than a decade, Lynas has had a refinery here in Kuantan, a Malaysian chemical-industry center. But it only produced light rare earths, which tend to be more common, while it sold heavy rare earths to China for processing. Last year, as the U.S.-China trade war was at its peak, Lynas finished a new heavy rare-earths processor in Kuantan.
Primary Sources
- Source: ZeroHedge
- Category: Corporate Watchdog
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