Last week's much-hyped London meeting between American and Chinese officials on rare earth elements ended pretty much how these diplomatic dances typically do—lots of handshakes, carefully worded statements, and precious little actual progress.
I've been tracking the rare earth saga since 2019, and frankly, this latest chapter feels like watching a rerun of a show nobody particularly enjoyed the first time around.
The diplomats gathered at Lancaster House—one of those impossibly elegant London venues where the chandeliers probably cost more than what most journalists make in a year—ostensibly to address China's chokehold on these critical minerals. Instead, they produced what diplomats always produce: a communiqué so bland it could put an espresso addict to sleep.
Let's back up.
Rare earths—that collection of 17 elements with names most of us can't pronounce (try saying "praseodymium" three times fast)—are the secret ingredients in everything that matters in modern life. Your smartphone? Needs 'em. Electric vehicles? Won't run without 'em. Military hardware? Completely dependent.
And China controls roughly 85% of global processing capacity. That's not just market dominance; that's geopolitical leverage that makes OPEC look like amateurs.
"We had very productive discussions about supply chain resilience," said one U.S. official who spoke on condition of anonymity because, well, that's what officials always insist on these days. When I pressed for specifics, there was a lot of throat-clearing and talk about "ongoing dialogue frameworks."
Translation: Nothing concrete happened.
The Chinese delegation, meanwhile, reiterated their position that they've never weaponized rare earths (although they definitely hinted at doing exactly that during previous trade tensions) and have no plans to restrict exports. Which sounds reassuring until you remember that plans can change awfully quickly in geopolitics.
Look, the fundamental problem is painfully simple. Western countries want secure supply chains that don't run through Beijing. China wants to maintain its extraordinarily profitable dominance of the sector. These objectives mix about as well as oil and water—or perhaps more appropriately, like neodymium and your investment portfolio.
What makes this particularly frustrating (maddening, really) is that America's rare earth predicament is entirely self-inflicted. The U.S. was once the world leader in rare earth production until we decided that mining was messy, processing was expensive, and hey, wouldn't it be swell if someone else handled all that unpleasantness?
Enter China, which recognized the strategic value of these elements decades ago while Western policymakers were busy... doing whatever it is policymakers do when they're not paying attention to critical supply chains.
Now America's Mountain Pass mine in California—once the crown jewel of rare earth production—ships concentrate to China for processing. It's like building a car but sending the engine to your competitor for assembly. Makes perfect sense, right?
After touring Mountain Pass last summer, I came away with one overwhelming impression: we know how to fix this problem. We just don't want to pay for it.
The solutions aren't mysterious:
- Strategic reserves (boring but effective)
- Processing facilities on domestic soil (expensive)
- Streamlined permitting (politically contentious)
- Allied cooperation (easier said than done)
Not a single one of these approaches featured prominently in the London talks. Instead, we got vague commitments to "explore possibilities for collaboration" and "enhance mutual understanding"—diplomatic-speak for "we'll keep having meetings about having meetings."
Markets barely noticed the non-event. MP Materials, America's primary rare earth player, saw its stock move less than the average daily fluctuation—a pretty clear signal that investors have learned to distinguish between diplomatic theater and actual policy change.
"We're basically waiting for a crisis before taking serious action," a rare earth industry executive told me over drinks after the talks concluded. He wouldn't let me use his name because, as he put it, "China's still where our stuff gets processed, and I'm not eager to upset them."
And therein lies the problem.
Until Western governments decide that secure supply chains are worth paying a premium for—and consumers accept that their gadgets might cost a bit more as a result—we'll keep having these diplomatic non-events. Meanwhile, China maintains its leverage over everything from F-35 fighters to Tesla's production line.
The next rare earth "breakthrough" announcement is probably being drafted already. Just don't expect it to break much new ground.
