Looks like more political force at play in the REE space.

China’s global grip on rare earths an ‘uncomfortable reality’

“China’s dominance of the rare earths supply chain has led to market failure, and this presents an existential threat to manufacturing in Western and like-minded countries,” O’Leary said.

Beijing’s monopoly of rare earths is being leveraged to control prices, O’Leary maintains. He said that significant price swings on the Asian Metal index over the past three and a half years indicate the price is being manipulated by China.

“Most telling is the price fall, from the peak in early 2022, which occurred almost immediately following what was effectively a Chinese government directive to its rare earth firms to ‘jointly guide product prices to return to rationality’,” he said.

Independent forecasters point to a future supply squeeze and rising prices, yet Asian Metal index prices for rare earths remain at historic lows. At today’s index prices, no producer, regardless of location, is making any money, O’Leary said.

China makes more than 90 per cent of the world’s rare earth oxides and monopolises the global supply of two heavy rare earth elements – dysprosium and terbium. It can extract profits anywhere along the supply chain.

Kim Beazley, chairman of the US Asia Centre think tank in Perth and former defence minister, said a miner such as Iluka could potentially change the game if it can supply half of the West’s demand for rare earths within the next six years.

“That’s it. Finished. Strategic game over [for China],” he said.

“If we are going to get these precise rare earths – terbium, dysprosium and a couple of others – that are critical to making magnets ... that is what gives us a reasonable chance, or the Americans a reasonable chance, of independent survival.”

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