Group 1 - Lynas Corporation has successfully achieved mass production of heavy rare earth element dysprosium at its plant in Kuantan, Malaysia, and plans to start production of terbium in June 2023, making it the second company after Daikin to supply heavy rare earths [1] - Heavy rare earths are essential in various critical sectors such as aerospace, medical, nuclear energy, electric vehicles, and wind power, with applications including missile guidance chips and radar systems [3] - China dominates the global heavy rare earth production, accounting for over 70% of output and 92% of smelting and separation capacity, with a purity level of 99.99% [3] Group 2 - Lynas is shifting focus from light rare earths to heavy rare earths, with an expected annual production of 1,500 tons at a purity of 99.95%, which is only 10% of Daikin's output but fills a market gap [4] - The U.S. is providing Lynas with $258 million in subsidies to build a heavy rare earth production facility in Texas and has signed a long-term contract to purchase 60% of its heavy rare earth capacity [5] Group 3 - Elon Musk has stated that while the U.S. has rare earth resources, it has opted not to extract them due to environmental and economic concerns, leading to a reliance on foreign suppliers [7] - Despite Lynas's production cost of $12 per kilogram being significantly higher than Daikin's $4-5 per kilogram, advancements in separation technology may accelerate the development of heavy rare earth extraction capabilities in other countries [8] Group 4 - Although rare earths are not monopolistic resources, China can strategically leverage its dominance to exert pressure on the U.S. for the next four to five years, while the U.S. aims to reduce its reliance on Daikin from 94% to 60% by 2027 [10] - China can maintain its leading position in the global rare earth supply chain by adjusting export quotas and controlling the export of refining equipment and materials [14]