X @Nick Szabo

Rare Earth Industry Overview - China's dominance in rare earths is attributed to a combination of geological advantages, historical policy decisions, and industrial strategy, not just geological monopoly [1] - In the 1980s, China designated rare earths as a "strategic resource" and heavily subsidized production, tolerating pollution and low margins to achieve global supply dominance [2] - By the late 1990s, Chinese rare earth output became so inexpensive that Western mines closed, and investment in exploration elsewhere ceased [2] - China has built the entire rare earth supply chain, from ore to refined oxides to magnet and component manufacturing, while other countries offshored these stages [3] - Rare earth separation and processing are chemically complex and generate toxic and radioactive waste, which Western companies avoided, while China tolerated [3] Competitive Landscape - Even when rare earth ore is mined in Australia or the U S, much of it is still sent to China for processing [3] - China's infrastructure, workforce, and state support make its rare earth deposits economically viable, unlike comparable deposits elsewhere due to Western environmental and labor costs [4] - Since 2015, China has consolidated dozens of companies into a few giant state-owned groups to regulate output and pricing, transforming the industry into a strategic tool [5] - This consolidation has resulted in centralized control of supply and export policy, giving China political leverage and industrial dominance [5] - China's dominance in "reserves" reflects economic reality, not geological monopoly; other nations could change the global "reserve" map by building comparable processing capacity and accepting the associated costs [6]