Technology thesis · Critical Materials
high conviction matureRare earth elements
China's 70% mining and 90% refining grip on rare earths is a structural weapon; its April 2025 heavy-REE export controls still bite, and Western reshoring won't close the heavy-REE gap this decade.
Position maintained continuously · last reviewed Jun 24, 2026
The thesis
Core thesis
James Litinsky (MP Materials) operates the only US rare earth mine at Mountain Pass. Amanda Lacaze (Lynas) built the only non-Chinese supply chain. But mining is only 30% of the problem — refining and magnet manufacturing are 70%, and China controls 90%+. The chemical precursors needed for refining (ammonium sulfate, magnesium sulfate) are also overwhelmingly Chinese. Guillaume Pitron raised awareness with 'The Rare Metals War.'
State of the art (2026)
China still mines roughly 70% and refines close to 90% of rare earths, and its April 2025 licence regime on the seven heavy elements – dysprosium and terbium among them – has never lifted, even as the broader October 2025 controls sit suspended under a truce until November 2026. That leverage is now structural, not episodic. The Western counter-build is finally real but small: MP Materials restored end-to-end magnet output at Independence in Fort Worth and unveiled its Northlake ‘10X’ campus in February 2026, backstopped by a Pentagon 15% stake and a ten-year $110/kg NdPr price floor. Lynas, Iluka Eneabba and Pensana Saltend are commissioning separation. Even so, non-China heavy-REE supply will not cover a fifth of demand this decade.
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Signal stack
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Technology-native KPIs
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Landscape map
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Catalyst calendar
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Technology roadmap
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Watchlists
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Decision frameworks
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Thesis changelog
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Change our mind
3 disconfirming conditions
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