![]() The company has long sold rare earth metals in the United States to privately held Blue Line to process into specialized materials. It aims to open a replacement processing plant in Australia later this year. Lynas refines concentrate in Malaysia that it produces in Australia, but authorities in Kuala Lumpur plan to block the imports next year, citing concerns the Lynas plant leaks radioactive waste, a charge Lynas disputes. Myanmar, Vietnam and others also ship concentrate to China for refining. Regulatory filings show it has also been selling China fluoride waste-at a loss-left by a previous owner at its site in California, which has stringent storage regulations for the material. MP shipped about 43,000 metric tons of concentrate to China last year for refining. The strategy helps ensure prices that incentivize other countries to dig new mines but not build processing plants that can also produce radioactive waste, analysts said. ![]() ![]() China also offers a 13% export rebate to magnet manufacturers using its material, furthering its dominance.īeijing for years has allowed imports of lightly processed rock known as rare earths concentrate for refining. Rare earths refining "is not really being addressed even by those who are developing magnet capacity," said Ryan Castilloux, a minerals consultant at Adamas Intelligence.īy strategically focusing on industries that use the magnets-built with rare earths refined in China at profit margins purposefully kept low-Beijing can boost its booming EV industry, Castilloux added.Ĭhina's model came into sharp relief last month when rare earths prices sank to their lowest level in nearly three years, due in part to rising Chinese supply. ECONOMIC CONTROLĬhina's refining expertise has allowed the country to engineer rare earths prices at different stages in the processing chains to its advantage, including low prices for finished products, to inhibit foreign competition, analysts said. "What's happened in China over many years is that they've invested heavily and cleverly in the processing capacity to convert the (rare earths) material all the way from the mine through to the magnet," said Allan Walton, a metallurgy professor at the University of Birmingham. Similar issues could plague about half a dozen other companies aiming to refine independently elsewhere in the world, analysts said. While MP relied on Chinese expertise to restart its mine- bought in 2017-that know-how is less helpful when it comes to tailoring refining equipment. To extract neodymium and praseodymium to build EV magnets, for example, MP must first remove the less-desirable lanthanum and cerium that compose about 83% of its California deposit in a process that relies on an intricate cocktail of acids, bases and other chemicals that are tailored to the mine's geology. Those rare earths must be teased out in a specific order, preventing MP and its peers from cherry-picking specific elements they may want. ![]() Rare earths refineries must contend with 17 metals, depending on a deposit's geology, each of which are nearly the same size and atomic weight, making separation complex. They are lighter and can handle far higher temperatures than traditional magnets, in part due to their unique chemical properties. Rare earths magnets turn power into motion and are the essential components in an electric vehicle's motor. "The rare earths refining process can be very finicky," said Kray Luxbacker, who heads the University of Arizona's mining and geological engineering department and is unaffiliated with MP or its peers. MP, whose second-largest shareholder is China's Shenghe Resources (600392.SS), declined to comment ahead of its results. "The (rare earths) commissioning process is painstaking, with stops and starts," Jim Litinsky, MP's CEO and largest shareholder, told investors in May.
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