China now controls 92% of rare earth processing. Every Western EV and defense firm depends on a supply chain they can't replicate - Silicon Canals

"China controls the overwhelming majority of global rare earth processing capacity, a figure that has remained structurally stable for nearly two decades despite sustained Western policy attention. The problem has never been geology. It's always been industrial chemistry at scale."

"Processing rare earths from ore into usable separated oxides, and then from oxides into finished permanent magnets, is one of the most technically demanding and environmentally intensive industrial processes in modern manufacturing."

"China built this capacity deliberately, over 30 years, accepting environmental costs that Western regulatory frameworks would not permit, subsidising facilities that the market alone would never have funded."

"The result is not a temporary competitive advantage. It is a structural moat. The Pentagon has been openly wrestling with the implications, and defense analysts suggest the timeline for developing alternatives remains challenging."

European EV manufacturers depend predominantly on Chinese suppliers for neodymium-iron-boron magnets, essential for electric motors. Despite the presence of rare earth deposits in various countries, China maintains control over global processing capacity. This dominance stems from decades of investment in industrial chemistry and engineering expertise, which Western nations have struggled to replicate. The challenge is not geological but rather the ability to process these materials at scale. The implications of this dependency extend to national security and defense considerations.

Read at Silicon Canals