The Rare Earth Elements (REE) sector is now the primary arena for geopolitical competition between the U.S. and China.
China maintains a near-monopoly, controlling approximately 90% of global REE processing, and is actively weaponizing this dominance through sophisticated export controls, targeting not just materials but the processing technology itself.
This conflict is critical because demand for REEs, driven by electric vehicles (EVs), wind turbines, and advanced defense systems, is non-negotiable and projected to increase by 300–700% by 2040.
To counter China, the U.S. has initiated a state-led industrial policy, deploying legislation and direct Department of Defense (DoD) funding, to build a secure, domestic "mine-to-magnet" supply chain.
Established U.S. producers like MP Materials are key to this strategy. However, the sector remains highly volatile and carries significant environmental, social, and governance (ESG) risks related to hazardous waste and radioactive contamination.
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