Rare earth separation and refining
CHOKEPOINTChina controls nearly all global rare earth separation capacity and can restrict exports to dictate magnet costs worldwide.
Solvent extraction or ion exchange separates mixed rare earth concentrates into individual oxides, then reduces them to metals. This is the narrowest chokepoint in the entire AI compute supply chain: China controls roughly 90% of global separation capacity, giving it direct export-control power over magnet and motor costs worldwide. Chinese state-owned refiners capture the single highest margins in the L0 layer.
What the evidence shows
China controls more than 90% of the downstream rare earth value chain, including oxide separation, metal refining, and magnet production.
gqg.comNew rare earth separation plants take 5-10 years to build, meaning new capacity won't ease supply constraints until 2029-2034.
rareearthinvesting.netScaling rare earth refining requires solving solvent degradation and multi-stage flow control, and a major Western barrier is the shortage of expertise.
rareearthexchanges.comWho controls it
Where it sits in the stack
Takes in: Mixed RE concentrate (carbonate or chloride)
Sends on: Individual REOs (Nd2O3, Pr6O11, Dy2O3, Tb4O7, etc.); RE metals (Nd, Pr, Dy, Tb)
Related nodes
Full scorecard, owner shares, supply edges and the full tracked roster are in the desk letter.
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