America’s bipartisan pursuit of the wrong rare earth strategies

Last update: Monday  3/9/26 11:00am

The original title of this first in a series of installments that was posted on this blog in January 2026 was "America's unlikely but successful bipartisan path to a reliable rare earth supply chain " -- a title that reflected its editor's optimism. He was optimistic because he didn't yet understand how China was really leveraging its dominance of the tiny $4 billion global market for rare earths by embedding them in innovative high tech products worth hundreds of billions as exports, e.g., iPhones and 'cPhones' (a/k/a Huawei smartphones) and Teslas and 'cTeslas' (a/k/a BYD's) . 

-- Note: Huawei's smartphones grossed larger sales than iPhones in 2025; BYD's EVs grossed larger sales than Teslas in 2025.

Full text ➡ HERE

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Revised Introduction

The editor began his investigations of China's rare earths five months ago while tacitly assuming the correctness of a popular nugget of current conventional wisdom:

•  'The U.S. has become so divided that any policy that obtains bipartisan support must be correct' 

He forgot the possibility that bipartisan agreement on policies that were doomed to fail might forebode a national catastrophe. Here are the bipartisan policies:

• Punishing China … via trials at the WTO (Obama) or high tariffs (Trump-1)  or high tariffs (Biden)  or much higher tariffs (Trump-2)
  
  
• Trying to duplicate China’s rare earth supply chain (Biden)

Now that the editor has assembled enough data to describe China's high tech rare earth ecosystem in his forthcoming installment, it has become overwhelmingly clear to him that China has been playing a long term, complex, industrial policy game that we won't be able to match in less than ten or more years ... nor should we try to. 

Winners don't play games they can't win, unless they have to ... but we don't have to. We need to invent a different kind of industrial policy game that we can win, a game that will produce materials that are similar to the advanced materials derived from heavy rare earth elements (REEs), e.g., powerful magnets, but are not made from REEs. 

These new materials should be made from resources that are plentiful in the U.S. or within the boundaries of our closest allies. Ideally, they should be familiar resources so that we can tap into our remaining pools of engineering talent, mass chemical production staff, and tool & die workers. 

Until we develop new materials from non-rare earth materials, China will be able to entice one industrial segment after another to enhance their products with China's 'magic beans'; then produce its own c-versions of those products that earn larger global market shares than the foreign products.

Can we really invent and commercialize such powerful game changing technologies in five years or less? Of course we can because we have DARPA -- The defense Advanced Research Projects Agency. As per the motto on its About DARPA page: 

• "The DARPA mission is to create and prevent technological surprise for our national security ... Created in response to the launch of Sputnik in 1957, DARPA stands as our nation’s commitment to never again face a strategic technical surprise." 

DARPA has delivered the new technologies our nation has needed again and again for almost six decades.

China's rare earths have become critical components for our nation's trillion dollar military and commercial sectors, so they have 'dual use'. Responding to dual use challenges is a DARPA specialty.  Readers who are unaware of its success in this genre are encouraged to provide the following short prompt to a browser using the Google search engine, then prepare to be stunned by the AI summary because the reader will find so many technologies that they use every day. 

"DARPA'S greatest achievements"

Readers are now referred to our next installment that describes how DARPA will provide the game changing technologies that our country needs to break China's chokehold on our civilian and military high tech  sectors ➡ DARPA

 

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Context

Here's what readers need to know about rare earths, China, and Greenland in order to understand this note’s subsequent discussions of Obama’s administration, Trump‘s first administration, Biden‘s administration, and Trump‘s second administration.

Context Menu ... 1. RareEarths | 2. China  | 3. Greenland |

4. Timelinee  |  | .Installments

1. What are rare earths? 

Why are they called "rare"? Are there different types of rare earths? And what's the difference between the types? Which types are the most important?

Rare Earth Elements (REEs) are a group of 17 chemically similar metals that act as the "vitamins" of modern technology, powering everything from iPhones to fighter jets. They are not actually rare—some are as common as copper—but are called "rare" because they are seldom found in concentrated deposits that are easy to mine. REEs are divided into two main categories: Light (LREE), which are more abundant, and Heavy (HREE), which are much scarcer and more difficult to process. 

While both are useful, the heavy elements are currently the most strategically important because they are essential for high-performance applications (like heat-resistant military magnets). The world's two largest known deposits of heavy rare earth elements are found in China and Greenland.

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Important Applications of Three Heavy Rare Earth Elements (HREEs)

Rare Earth Element	Important Civilian Applications	Important Military Applications
1. Dysprosium	Electric Vehiclest: Essential for drive motors that operate at high heat. Green Energy: Critical for wind turbine generators. Data Storage: Hard disk drives (HDDs) in cloud servers.	High-Heat Magnets: Required for actuators in precision-guided missiles and F-35 fighter jet motors. Stealth Technology: Used in radar-absorbent coatings. Drones: High-performance motors for military UAVs.
2. Terbium	Lighting: "Green" phosphors in energy-efficient lighting and LED screens. Electronics: Solid-state devices and fuel cells.	Naval Sonar: Essential for magnetostrictive transducers used to detect submarines. Lasers: High-temperature military lasers and targeting systems. Avionics: Actuators for aircraft wing surfaces.
3. Europium	Displays: The "Red" and "Blue" phosphors in smartphones, TVs, and monitors. Anti-Counterfeiting: Used in security inks for currency (e.g., the Euro).	Nuclear Reactors: Used in control rods to absorb neutrons in naval nuclear propulsion. Night Vision: Phosphors for robust military displays and night-vision screens. Secure Comms: Laser materials for encrypted communication.

Links to sources of data 

• SFA Oxford: Critical Minerals in Defence
  Critical Minerals in Defence and National Security

• Air & Space Forces Magazine: Rare Elements of Security
  Search Words: Air and Space Forces magazine rare elements of security
  Rare Elements of Security

• Visual Capitalist: How Rare Earths Power U.S. Defense
  How Rare Earths Power U.S. Defense

• Geology.com: REES and their Uses
REES and their Uses

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2. China's dominance of refined heavy rare earth elements (HREEs)

Although HREE deposits are found in many countries, most countries merely dig up their raw deposits and ship them to China to be refined. Then they buy refined HREEs from China.  

China's refining processes are effective, but toxic. They provide hazardous conditions for their workers and pollute their surrounding environments. The pollution of the areas surrounding China’s refineries is well documented although it does not seem to be widely appreciated. Nevertheless, China has accepted the high pollution costs in order to obtain the powerful benefits from becoming the world’s predominant provider of refined rare earths materials. Source: "China Has Paid a High Price for Its Dominance in Rare Earths", Keith Bradsher, NY Times, 7/5/25

China controls at least 90 percent of the world's Heavy REE refining. Its domestic mining industry is no longer a scattered marketplace; Beijing has consolidated it into a few massive state-owned giants, primarily the China Rare Earth Group.  Source: China Creates Rare Earth Giant to Maintain Supply Chain Power – Reuters

The editor tasked Gemini to find:

• Estimates of the recent market value, i.e., recent annual sales, of Terbium, Dysprosium and Europium -- three of the HREEs enjoying strongest global demand
• Estimates of China's share of these annual sales. 

The editor also tasked Gemini to obtain these paired estimates -- market value, China's share -- from three different reputable sources. As the reader will see from the values reported at the end of this section, one might conservatively draw three conclusions by selecting the largest estimated market value and the smallest estimated China share: 

• The market value of Terbium was less than $1.3 billion; China's share was at least 90 percent
• The market value of Dysprosium was less than $1.21 billion; China's share was at least 96 percent
• The market value of Europium was less than $300.89 million; China's share was at least 85 percent
  

Given the relatively small size of the annual global sales of these materials, small on a global scale, it is apparent that the power China derives from its being the dominant player in heavy rare earth refining is not financial; its power is strategic. Beijing endures high pollution costs that are not accepted by any other nation in order to maintain its monopolistic chokehold on materials that are critical requirements of the trillion dollar high tech civilian + military sectors of the world's other hegemonic powers, e.g., the United States.

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Terbium ... Total Global Market Value (Sales)

1. USD $300 Million (Valuation of the global Terbium metal market in 2024). DataHorizzon Research - Terbium Metal Market Size 2033

2. USD $994.8 Million (Global Terbium rare earth elements market revenue in 2024). Grand View Research - Terbium Market Statistics

3. USD $1.3 Billion (Global Terbium Oxide market valuation in 2023, projected to reach $2.2B by 2032). Dataintelo - Terbium Oxide Market Report

Terbium ... China's Share World Processing (Refining)

1. ~100% (China produces nearly 100% of the refined heavy rare earth elements used worldwide). Econofact - Can the U.S. Reduce Its Reliance on Imported Rare Earths?

2. 91% (China's share of global separation and refining for rare earths, specifically noting heavyelements like Terbium). IEA - Supply Concentration Risks

3. 90% (China controls nearly 90% of global rare earth refining capacity, including a near-monopoly on heavy elements). Rare Earth Exchanges - Processing Capacity

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Dysprosium ... Total Global Market Value (Sales)

1. USD $540.0 Million (Global Dysprosium rare earth elements market revenue in 2024). Grand View Research - Dysprosium Market Statistics

2. USD $715.29 Million (Global Dysprosium market valuation in 2024). ReAnIn - Dysprosium Market Size & Share

3. USD $1.21 Billion (Global Dysprosium market size estimated in 2024). Global Insight Services - Dysprosium Market Forecast

Dysprosium ... China's Share World Processing (Refining)

1. 99.9% (China's forecast share of global processed Dysprosium production). Benchmark Mineral Intelligence - China's Rare Earths Monopoly

2. 96% (China's market share in the refining of rare earths, specifically noting heavy elements like Dysprosium). MUFG Americas - China's Lead in Mineral Production

3. ~100% (China produces 100% of the refined heavy rare earth elements, which includes Dysprosium). Econofact - Rare Earth Dependence

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Europium ... Total Global Market Value (Sales)

1. USD $267.1 Million (Estimated global market value for Europium in 2024). ResearchAndMarkets - Europium Market Forms and Applications

2. USD $275.1 Million (Global Europium market valuation in 2024). ResearchAndMarkets - Europium Market Forecasts 2024-2029

3. USD $300.89 Million (projected global market worth for Europium in 2025). 360 Research Reports - Europium Market Size and Trends

Europium ... China's Share World Processing (Refining)

1. 98-99% (China controls approximately 99% of global heavy rare earth separation capacity, which includes Europium). Discovery Alert - China's Rare Earth Dominance 2026

2. 85-90% (China controls up to 90% of global rare earth processing capacity, affecting supply chains for Europium). Bruegel - Escalating US-China Rare Earth Tensions

3. >95% (China produces over 95% of the world output of rare-earth minerals and dominates refining). USGS - China's Rare-Earth Industry
   
   

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Banned exports
To ensure that it retains its chokehold on the supply chain, China forbids the export of raw REEs. Every rock mined in China—and much of the rock mined in Myanmar—must be processed inside China by this state-controlled cartel. Source: China Bans Export of Rare Earth Processing Technologies – CSIS

International reach

But China’s ambition doesn't stop at its own borders. It uses a specific 'hunter' company called Shenghe Resources to capture critical deposits abroad. Shenghe is a 'mixed-ownership' enterprise—publicly traded but anchored by state shareholders—that specializes in buying stakes in foreign mines (like Kvanefjeld in Greenland). Source: Chinese State Backing for Shenghe Resources: Strategic Implications – Discovery Alert 

Shenghe doesn’t just bring money; it brings the processing technology that Western companies have lacked (until DARPA developed more cost-effective, non-toxic alternatives during Biden's administration). By buying a substantial share of the Greenland project in 2016, Shenghe aimed to ensure that even if the mine was in Greenland, the raw ore would flow straight into their refineries in China, effectively making Greenland a satellite of the Chinese supply chain.

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3. Greenland's geography, founding, demographics, economy, and recent timelinee

Geography: The "Green" vs. "Ice" Irony

Greenland is the world's largest island, located between the Arctic and Atlantic Oceans, directly east of the Canadian Arctic Archipelago. It covers approximately 836,000 square miles, making it roughly three times larger than Texas (268,000 square miles). Its name is a famous marketing trick. Erik the Red named it "Greenland" to attract settlers, even though it is over 80% ice. Iceland is actually much warmer due to the Gulf Stream, with an average annual temperature of roughly 37–41°F, whereas Greenland is an Arctic freezer that averages between 12–30°F in habitable coastal areas and far colder inland. 

Sources: Wikipedia Geography of Greenland, Climate of Iceland, and Erik the Red

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 "Reverse" Colonization

The indigenous people of Greenland are the Inuit (specifically the Thule people), who originally migrated from Alaska and Siberia across Northern Canada. They are directly related to the Inuit of Canada and Alaska, sharing the same Eskimo-Aleut language family. Interestingly, the Thule arrived in Northern Greenland around 1200 AD, which was actually after the Scandinavians had already settled in the South. The Norse Vikings (led by Erik the Red) arrived first around 985 AD, but the two groups did not have significant contact until the Thule expanded southward later in the 13th century, where the Norse referred to them as Skrælings.

Sources: Wikipedia: Thule People, History of Greenland, and Norse colonization of North America

Demographics: The Overwhelming Majority

Today, the Inuit (who refer to themselves as Kalaallit) make up about 89% of Greenland’s total population of roughly 56,600 people.  The Inuit are the undisputed demographic majority in  Greenland, with the remaining ~11% being mostly Danish immigrants. Sources: Wikipedia Demographics of Greenland, Kalaallit

"Subsidy" Economy

Wealth distribution in Greenland is marked by significant inequality, often higher than in Scandinavian countries, with a sharp divide between the urban capital (Nuuk) and the remote rural settlements. The economy is heavily dependent on an annual block grant from Denmark (roughly $600 million), which funds about half the government's budget and sustains the high standard of living. While some Inuit have become wealthy through the fishing industry and government positions, many in the smaller villages live a subsistence lifestyle that is cash-poor but resource-rich (hunting/fishing). Sources: Wikipedia Economy of Greenland

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4. Recent Timeline ...

a) The "Home Rule" Act (1979) gave Greenland control over domestic affairs (schools, housing, taxes) but kept the mineral rights under Danish control. Margrethe II signed this, effectively ending Greenland's status as a "county" of Denmark and making it a distinct territory with a parliament.

c) Act on Greenland Self-Government (2009) ... Queen Margrethe II dressed in traditional Greenlandic national costume (the red top and seal-skin boots) in parade celebrating the Act. The Act listed mineral rights as an authority that would be negotiated.

c) As soon as Greenland received official confirmation of its authority over mineral rights, it passed a Ban Uranium prospecting Act (2021) banning the extraction of ore with uranium content higher than 100 parts per million (ppm) because of concerns about radioactive waste. This law froze the Chinese-owned mine Kvanefjeld (Shenghe) whose ore exceeds the radioactive limit, while allowing the U.S. mine Tanbreez (Critical Metals) to proceed because its ore is below the limit.

d). The 'Shenghe' Lawsuit was filed by the Australian shell company Energy Transition Minerals (ETM) wherein Shenghe Resources is the largest shareholder and strategic partner. When Shenghe/ETM took Greenland to arbitration court in Copenhagen in late 2025/early 2026, the arbitration panel ruled that they could not force Greenland to issue the license. Nevertheless, Shenghe/ETM is still fighting for billions in damages.

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