This is actually super interesting to me. Given that the US is actually blessed with mineral concentrations, why is it so assumed that only China can produce rare earths? Is it the land opportunity cost? Is it the cost of labor? Is it the cost of regulation? And in the end, this is only a motor, or a battery, and the actual rare earth content is not very high. If the cost of rare earths was double or even triple the amount of sourcing them from China, how much does that actually impact the end price of a consumer good?

Rare Earths aren't rare in the "there is a small supply" sense, but in the "very dilute" sense. Rare earths don't concentrate into ores the way that say copper does. Rare earth deposits are just places where you happen to have 300 ppm instead of the crust average of 220 ppm.

The only way to mine rare earths is to just process massive quantities of earth. Typically this is done as part of another mining operation, like mining nickel. It's labor intensive and requires nasty chemicals. Places with cheap labor, weak environemental regulations, and extremely large scale mining operations that they are going to be operating anyways are always going to be able to produce the cheapest rare earths. It's very easy to see why China naturally dominates the market.

The US can and does produce rare earth elements:

https://en.wikipedia.org/wiki/Mountain_Pass_Rare_Earth_Mine

The Mountain Pass Rare Earth Mine and Processing Facility, owned by MP Materials, is an open-pit mine of rare-earth elements on the south flank of the Clark Mountain Range in California, 53 miles (85 km) southwest of Las Vegas, Nevada. In 2020 the mine supplied 15.8% of the world's rare-earth production. It is the only rare-earth mining and processing facility in the United States. It is the largest single known deposit of such minerals.

Look at the history section to see how this mine initially dominated rare earth element production, then shut down due to low price competition, then reopened, then shut down due to low prices, then reopened.

The total addressable market for rare earth elements is small in dollar and tonnage terms, but opening mines and processing plants is expensive. One big new mine could tank the global market price.

The US used to maintain large stockpiles of many mineral resources for defense purposes, but mostly stopped in the 1990s after the end of the Cold War. The pendulum may be swinging the other way now. The Mountain Pass mine received DoD grants in 2022 and 2023 to support continued operation, regardless of open market prices.

It is regulatory costs these days. Most mines currently operating in the US were grandfathered into current regulatory regimes, they'd likely never be developed today.

This creates a perverse incentive where it is often cheaper to reprocess low-grade ore from an existing mine than to jump through the regulatory hoops and decades of lawsuits to develop a new mine with high-grade ore. Refining a low-grade ore in the US often is not cost competitive on the global market, so there isn't much incentive to do so even though you've already mined the material.

The US needs to make it fast and efficient to develop new high-grade ore deposits. America has extraordinary mineral wealth as a matter of geology but we barely even explore in the US anymore because even if you find it you can't develop it. This has been the case since circa the 1980s or 1990s.

Price controls on gold up until the late 1970s didn't help either, since it discouraged gold exploration. Many high-value mineral deposits in the US have been discovered as a side-effect of gold exploration. The price controls disappeared but were almost immediately replaced with regulatory regimes that made it unprofitable to develop new mines.

Many rare earth deposits in the US were discovered as a side-effect of uranium prospecting. The US government stopped subsidizing uranium mining ~1970, which was the main reason it was being done at all, and so people stopped discovering associated minerals around the same time.

> why is it so assumed that only China can produce rare earths?

Simplistic thought, but, they're the only ones willing to ignore and cover up the insane pollution it causes. Rare earth is somewhat synonymous with "exceptionally toxic."

Refining. China has build up the entire pipeline from mining to raw ore to refining for industry use. It's the only place that has it all. Building the refining capacity took decades.

> why is it so assumed that only China can produce rare earths?

Pollution. The smokestack emissions are very toxic. The residue/slag is toxic and radioactive. One should remember that "rare earth metals" are not rare, they're the bottom 2 rows of the periodic table. They are rather hard to separate chemically and many people like to exclude the bottom row of the periodic table (the actinides) because that's where uranium and plutonium are located and those 2 elements terrify people enough to derail discussions about the materials.

> why is it so assumed that only China can produce rare earths

For the same reason that only China can produce t-shirts, or a quality sedan EV with a 5-star EU crash test rating and 350 miles of range for $15,000.

> why is it so assumed that only China can produce rare earths

You want carcinogens in you water supply, and a whole NYT expose about it? That's why. Mining and processing is VERY VERY VERY dirty.

Countries like China, Vietnam, Indonesia, and India are choosing the accept the externalities and/or make deals with shady partners if needed.

Add to that spamoflauge campaigns lead by nation state competitors trying to stoke opposition to these projects [0], and it becomes hard.

[0] - https://cloud.google.com/blog/topics/threat-intelligence/dra...

Edit: can't reply, so replying here.

> mines many elements domestically, so why the sudden environmental concern specifically with rare earths

Optics mostly, along with a healthy dose of social media disinfo [0]. Processing is also a pain in the butt and causes severe externalities.

> while the US relied on market forces to handle supply chains.

Pretty much, but private sector firms are also worried/hemmed by the implications of litigation.

The recognition that the status quo is unstable arose after China weaponized exports to Japan during the Senkaku Diaoyu crisis (it was one of the first things I worked on in my short stint in policy), but "industrial policy" was a dark word you could never utter on the hill until the last 3-4 years.

Also, 13-15 years ago, China wasn't really viewed as a threat the same way it is today. Russia was viewed as the primary peer state competitor to the US back then. I yelled hoarse warning the people I reported to that we needed to deep dive into Chinese institutions back then, but no one listened.