Trump Beating China on Rare Earths is Easier Than You Think

Given the ability of the words "rare earths" to bring the leadership of the world's largest economy to its knees, it's tempting to think that establishing a supply chain to produce the minerals outside of China is a challenge on the scale of putting a man on the moon.

But mining and processing expert Keith Liddell says it is not nearly that complicated.

"It's not rocket science. It's chemistry, and it's metallurgy, and it's been around for 100 years," said Liddell, who was the chief executive of rare earths miner Lynas for a decade until 2018.

The Western world has become hysterical about rare earths in the past few years, as China has used its dominance of the market – it produces about 95 per cent of the world's rare earths – as a political weapon in its trade war with the United States.

The US, in particular, has been desperate to find an alternative source of the 17 minerals used in everything from smartphones and electric vehicles to military hardware.

But Liddell says China's dominance is surprisingly fragile.

"It's not like they have a monopoly on the resources. They have a monopoly on the processing," he said.

And processing, he says, is the easy part.

"It's not like you need a PhD in nuclear physics to do it. You need a PhD in chemistry and metallurgy, which is a lot easier to come by."

Liddell's company, Talaris Capital, is not involved in rare earths, but it is involved in processing other minerals, and he says the skills are transferable.

"The same skills that are used to process nickel and cobalt and lithium and copper can be used to process rare earths," he said.

The only thing that has stopped the West from setting up its own rare earths processing industry is a lack of political will, Liddell says.

"The problem is not technical. The problem is political."

And that, he says, is about to change.

With the US government offering massive subsidies for companies to set up rare earths processing plants, and with other countries like Australia and Canada also looking to get in on the act, the Western world is finally waking up to the strategic importance of these minerals.

It may not be easy, but it is certainly doable.

And if the West can get its act together, it could find that China's dominance of the rare earths market is a lot less formidable than it looks.