There is no Rare Earth or Critical Materials Crisis. Stop being Alarmists!

[Deven]

There is no Rare Earth or Critical Materials Crisis. Stop being Alarmists!​

People typically spend more time seeking and collecting arguments which support their beliefs than they spend considering arguments which contradict their beliefs. The more time a person spends accommodating a view, the more intense and embedded that view becomes. We should challenge ourselves to avoid exposure exclusively to confirming evidence and to periodically deconstruct our own positions to re-evaluate their legitimacy.


Sycophancy in AI describes a phenomenon where AI tailors its answer to match the user's expressed or implied view, even if that view is factually incorrect or biased.

Personalization Bias occurs when a system’s desire to be ‘helpful’ or ‘relevant’ leads it to omit dissenting perspectives that it assumes the viewer will find annoying or irrelevant.

Filter Bubble occurs when an algorithm formulates what information you see based on your location, past click behavior, search history, or other biasing factors.

Echo Chamber is an environment where a person only encounters information or opinions that reflect group think. In an echo chamber, dissenting views are either absent or are framed in a way that makes them easy to dismiss.

Confirmation Bias is when we naturally prefer information that proves our existing views.

Social Validation is when everyone in your digital circle agrees with you. It creates a false sense that ‘everyone’ in the real world feels the same way.

Principal of Charity in argumentation states that arguments, especially those of one’s opponent, should be represented and evaluated in their strongest, most rational, most persuasive form.

Devil’s Advocate takes a position they don’t necessarily agree with for the sake of stress-testing or validating an alternative line of argument.


EVERYONE: For the benefit of all others in this Forum, please present arguments for or against the below statements which propose the rare earth and critical materials crisis is overblown, or will be of little actual consequence…



(Thank you to everyone who contributes. I look forward to replies from all perspectives.)
(Yes, I'm of the opinion there IS a crisis, but it's good to consider all relevant views.)

 

[Deven]

How are the following points valid or invalid, mistaken or legitimate, important or minor?

What do you view as the core factors supporting the assertion of a RE Crisis and what are its specific consequences?



Mutual Dependence as a Stabilizer / Symbiotic Hostages

1. China’s dominance in raw minerals is balanced by its dependence on Western technology. This creates a state of mutually assured economic destruction. This dependence discourages extreme geopolitical severance, as both sides would suffer severe economic losses if the chain were truly broken. Dependency fosters stability.

Wasting Asset / Self-Destructive / Asymmetric Vulnerability

1. Coercion is fundamentally self-defeating and limited by market forces. China’s leverage is a "wasting asset" that triggers rapid Western innovation and diversification whenever it is used. Every act of ‘weaponization’ accelerates the advantage’s own obsolescence.
2. Rare earths are not a high-profit "cash cow" like oil, but a low-margin industrial service. China’s advantage is based on its willingness to absorb massive environmental and social costs that the West rejects. Because total market demand is relatively small, this is often a money-losing venture for Chinese firms once environmental cleanup and state subsidies are factored in.
3. If China halts exports, its own multibillion-dollar downstream refineries and magnet plants face significant underutilization, making permanent coercion economically irrational for Beijing.
4. As the West builds out its own capability, China’s massive mining and refining infrastructure risks becoming a "stranded asset"—a multi-billion dollar system for which global demand is steadily declining due to Western diversification and substitution.

Restrictions vs Bans / Calculated Restraint vs Outright Hostility

1. Long-term halts in exports are economically irrational for Beijing. Halting supply risks the underutilization of its own billions of dollars in downstream processing infrastructure. China may only favor temporary restrictions to avoid destroying its own global market share.

Reputational Risk / Decoupling / Derisking

1. China needs to export minerals to maintain its own manufacturing scale and employment. A total embargo would devastate China's reputation as a reliable trade partner, triggering a global decoupling that would cause a domestic economic crisis in Beijing.
2. High-pressure situations from Chinese dominance have historically spurred the West to innovate rare-earth-free alternatives, which may eventually make China's current dominance over heavy rare earths obsolete.
3. China officially expresses a commitment to working with global partners to ensure the ‘security and stability of global industrial and supply chains,’ framing itself as a responsible rather than disruptive actor.
4. Beijing repeatedly reassures foreign companies that applications for civilian and commercial use—such as for electric vehicles or smartphones—will be ‘actively facilitated’ and approved as long as they comply with regulations.
5. China's economy relies on being the "world’s factory." If it weaponizes basic industrial inputs, it confirms the worst fears of its trading partners, accelerating a global decoupling that would cause far more damage to China's GDP than the West's manufacturing sector.

China is "Subsidizing" Global Decarbonization / Enabling lower costs

1. By heavily subsidizing its rare earth industry and achieving massive economies of scale, China has effectively lowered the cost of solar panels, wind turbines, and electric vehicles for the entire world. De-risking or total independence may be more costly and damaging than managed reliance.
2. It is more "economically rational" to import materials from a region already equipped with the infrastructure and a higher tolerance for the industrial impacts than to build high-cost, strictly regulated domestic facilities.
3. Reclaiming the midstream would require massive capital outlays without a guaranteed return on investment.

Technological Leapfrogging and Substitution / Innovation

1. Technological advancements are changing how resources are used, allowing manufacturers to use smaller amounts of critical elements or to develop substitutes. Companies will engineering-out risky dependencies.
2. Scientists are developing alternatives to replace high-cost or difficult-to-source materials. If a material becomes a permanent liability, it is engineered out of the system.
3. Defense strategy is shifting from limited-quantity, exotic, high-tech, high-cost equipment to mass-produced, low-cost, expendable, swam capabilities.

Strategic Neutralization / Stockpiles / Trade Blocs / Price Floors

1. Western nations now maintain strategic stockpiles to provide a buffer against short-term trade disruptions or economic coercion. This provides a ‘bridge’ that allows industry to continue operating while they pivot to new suppliers or designs.
2. While rare earths are critical for many advanced defense systems, the U.S. and allies have mitigated the short-term risk through strategic stockpiling and mandatory sourcing from non-Chinese supply chains.
3. Government interventions are financing new mines and processing facilities, directly addressing supply chain bottlenecks.
4. Price floors will prevent China from manipulating prices to make projects uneconomic or uninvestable.
5. Global supply chains are shifting toward ‘China Plus One’ strategies.
6. Markets are already adapting and long-term supplies will be more than adequate to meet global demand.
7. Resource countries will begin to demand greater participation and diversification of the processing path resulting in more capability being shifted away from China.
8. Rare earths are abundant globally. Western ‘vulnerability’ is just a refusal to pay the higher labor and environmental costs of mining or processing them.
9. While processing is concentrated in China, actionable deposits exist in multiple other regions, including Australia, Brazil, South Africa, and Canada, which are currently being developed.

Recycling / Closed Loop / Circularity

1. The U.S. and the West have vast unconventional reserves hiding in plain sight, such as in mine waste, industrial scrap, and discarded electronics which can be recovered more economically that primary mining efforts.
2. We are reaching a ‘tipping point’ for circularity. As early generations of electric vehicles, wind turbines, medical devices, and electronics reach their end-of-life, the minerals they contain can be recovered. Recovering these materials is often more cost-effective and environmentally friendly than opening new mines, potentially creating a closed-loop supply chain that eliminates long-term dependence on foreign mining and processing.
3. China can not avoid shipping minerals to the west in some form, whether as precursor materials or in end-products. Recycling will be able to recover the materials and make restrictions more difficult to enforce.

 

[Heat.Beat]

A lot to chew on there…

I’m not sure what China is wanting to accomplish, but let’s assume for sake of argument that it is most nefarious global control.

They have built a substructure that could support that conclusion.

They do have some weak points, and the Chinese government has quietly sought to minimize those, but they remain- namely, energy and food.

The West slept while they crept. But, they have flashed their teeth on enough occasions to awaken some; it remains to be seen if a sufficient response will materialize.

They are definitely moving the chess pieces now as the west hears the alarm ringing…

Would they like to take Taiwan, as a first move to show the world their Trumpian power? Will we be so beholden to them that we acquiesce?

I tend to think that Taiwan if attacked might just take out the Three Gorges Dam in the first 5 minutes…

Let’s hope China remains rational and partners with the world to increase the wealth and prosperity of their citizens without lighting a fire they can’t put out.

 

[John]

Hi @Deven

Hey I don't have time to write much today, but i'll give a quick reply on the first one.

"Mutual Dependence as a Stabilizer / Symbiotic Hostages

1. China’s dominance in raw minerals is balanced by its dependence on Western technology. This creates a state of mutually assured economic destruction. This dependence discourages extreme geopolitical severance, as both sides would suffer severe economic losses if the chain were truly broken. Dependency fosters stability."

The premise is increasingly outdated—particularly in the rare earths context. While it’s true that China historically relied on Western technology, that gap has narrowed materially. In rare earths specifically, China now leads in both patent volume and proprietary processing know-how, especially across separation, metallisation, and magnet manufacturing. The dependency is no longer symmetric in any meaningful sense.

More broadly, the idea that “severe economic losses” act as a deterrent to geopolitical rupture doesn’t hold up well empirically. Recent history suggests otherwise. Russia’s invasion of Ukraine occurred despite deep economic interdependence with Europe. Similarly, Taiwan remains deeply integrated with China commercially, yet is still a focal point of escalating strategic tension.

In both cases, rational economic trade-offs appear secondary to ideological, strategic, or national security objectives. That same framework is increasingly relevant when assessing rare earth supply chains—particularly given their direct linkage to defence, energy transition, and industrial policy.

So while interdependence can create friction against disruption, it shouldn’t be relied upon as a stabilising force—especially in sectors now viewed as strategically critical.