Pensana broke ground to commence construction of its Saltend rare earth plant project in the UK. With the UK government launching its Critical Minerals Strategy at the Saltend site, Pensana announced that it has secured funding from the UK’s £1Bn Automotive Transformation Fund (ATF) to support the development of a rare earths processing hub.

Rare earths attract a considerable amount of government interest.  This is not a new phenomenon.  Government directives to advance rare earth processing and diversify supply stem from concerns over China's dominance of the rare earths industry and a growing awareness of the role rare earth magnets play in the energy transition and wider economy.  Japan, which now has an established mid-stream rare earth refining industry, started its diversification over a decade ago after Beijing abruptly cut off all rare earth exports to Japan as China flexed its control on the rare earth supply chain for geopolitical reasons. Lynas, the largest refiner of rare earths outside of China, and various metal and alloy production sites scattered across southeast Asia are a key result of Japan’s investments following the 2010 incident.

Other governments are now responding.  The USA’s Department of Defense (DoD) already has several contracts with two of the largest players, MP Materials of the USA and Lynas of Australia, to develop rare earth separation facilities. Meanwhile, Australia’s government has dished out loans from its Critical Minerals Facility fund to support the development of strategic rare earth resources to supply the global market.  The UK Government's funding of a rare earths processing hub should also be considered in this context.  

However, China's position remains secure.  China has already invested heavily in international supply to supplement (preserve) domestic rare earth resources. China’s "open-for-business" attitude means that new supply chain developments will compete against the largest consumer, which includes MP Materials’ Mountain Pass mine in the USA, which is the largest supply of rare earths to China above its domestic mining quotas.  According to Project Blue’s latest forecasts, China will continue to dominate the refining of non-Chinese mine and mixed compounds production for the time being. The growth in rare earth magnet production capacity already underway in the country coupled with the high H1 production quota should be a reminder of the challenges that lay ahead to building independent rare earths supply chains.