June 12, 2025. Susan Greene

Rare earth elements (REEs) have become the quiet drivers of modern technology, powering everything from smartphones and electric vehicles to wind turbines and military defense systems. Despite their name, these 17 chemically similar elements are not actually rare in the Earth’s crust—but their extraction and refinement are concentrated in just a few countries, with China dominating the global supply chain. This monopolization has given China significant geopolitical leverage, particularly in trade tensions with nations like the United States, which rely heavily on REEs for both commercial and national security applications. However, the environmental toll of rare earth mining and refining is severe. The process often involves toxic chemicals, radioactive waste, and widespread ecological disruption, especially in regions with weak environmental regulations. As global demand for REEs surges in the race for clean energy and technological dominance, the world faces a difficult balancing act between economic security, environmental sustainability, and geopolitical strategy.

Trade Tensions Escalate

In response to escalating technology sanctions, China has signaled a reduction in rare earth exports (bias: center)* to the U.S., potentially disrupting major supply chains. Meanwhile, the U.S. has imposed restrictions on exporting liquefied natural gas derivatives (bias: center), such as butane, propane, and ethane, which are essential to China’s industrial plastics and chemical sectors.

This exchange of trade limitations highlights the mutual vulnerabilities of each economy. For the U.S., reduced access to rare earths could cripple tech innovation and military readiness. For China, constrained access to American hydrocarbons could hinder manufacturing growth and raise costs across its supply chain.

On June 11, 2025, an agreement (bias: center) between China and the United States helped ease the backlog of REEs for American manufacturing, while also setting a standard tariff of 55% on Chinese imports, and eased restrictions on Chinese student visas. Of note, China only created licenses for 6-month increments, meaning they can change their minds if they feel political advantage in the future. This agreement was assessed by Terry Haines of Pangaea Policy, Washington based consultancy and deemed to be, “very limited in scope, and unfinished status.”

“Setting the Geneva ‘pause’ back on track is the smallest of accomplishments, and doesn’t suggest that a broad US-China trade deal or geopolitical rapprochement is any closer in the foreseeable future.” Terry Haines, Pangaea Policy.

Environmental Impacts of Rare Earth Mining & Refining

REE production is energy-intensive and environmentally damaging, (bias: uncertain), involving complex extraction and separation processes that generate large volumes of toxic waste. Mining operations often disturb vast areas of land and release hazardous byproducts such as arsenic, uranium, and thorium into surrounding ecosystems, posing serious risks to both environmental and human health. In China, where the majority of global rare earth processing takes place, historically lax environmental oversight (bias: uncertain), has allowed these harmful practices to persist with limited regulation. This has resulted in widespread soil degradation, air and water contamination, and elevated rates of respiratory and cancer-related illnesses in nearby communities—particularly in regions like Baotou, often referred to as China’s “rare earth capital.” While China’s centralized government has been able to prioritize economic and strategic gains over environmental and public health concerns, replicating this model in democratic nations like the United States is politically and ethically untenable. Stringent environmental regulations, public resistance to pollution-heavy industries, and a growing emphasis on environmental justice present major obstacles to domestic REE production, even amid rising pressure to secure supply chains and reduce dependence on China. As a result, the U.S. faces a critical challenge: how to develop its own rare earth capabilities without sacrificing environmental integrity or public trust.

American Rare Earth Opportunities

Ramping up United States REE mining and processing is not only fraught with political issues that come with a democratic society, as mentioned above, it is a costly and takes quite a bit of time to ramp up. Currently, there is only one company in the United States (bias: center), that is able to mine and refine REEs, MP Materials from Mountain Pass, CA. MP Materials is also scaling up a production plant in Texas designed to create the magnets needed for converting. the refined materials to magnets.

Aside from the mining and refining of REEs in America in the early stages, or unable to produce the quantity needed, some businesses in Texas have started extracting REEs from electronic, defense, and other waste (bias: center). This level of extractions is far less invasive or environmentally damaging than mining and refining, and companies like REEcycle, based in Houston, TX are operating with funds from the Defense Production Act, and hope to extract 50 tons of REEs annually.

“REEcycle’s capabilities will help the United States become less dependent on foreign sources by extracting full value from material that would otherwise end up in landfills” Dr. Laura Taylor-Kale, Assistant Secretary of Defense for Industrial Base Policy

If you would like to learn more about REEcycle, or to contribute materials for their extraction process, contact REEcycle.