The Radioactive Ore That Could Break China’s Grip on Rare Earths

This article is a collaboration between IEEE Spectrum, the flagship magazine of the Institute of Electrical and Electronics Engineers, and Foreign Policy.

The global campaigns to break China’s dominance of vital rare-earth markets are shaping up into one of the signature geostrategic struggles of the early 21st century. Hundreds of mining companies, government agencies, and industrial facilities scattered across North America, Australasia, and Europe are striving to compete with Chinese firms, which control roughly 90 percent of the markets for rare-earth oxides and rare-earth metals.

These are the ingredients upon which vast and crucial manufacturing categories depend: semiconductors, LEDs, lasers, displays, metal alloys, optical lenses, and catalysts for petroleum and chemical processing. Most important, though, are permanent magnets. Essentially all powerful electric motors (and most high-quality audio speakers) are based on rare-earth permanent magnets. These motors are the heart of electric vehicles, heating and cooling systems, robots, appliances, tools, and military systems—from tactical drones to ballistic-missile submarines.

Succinctly put, any industrial power that wants to remain competitive in vital, high-tech industries must have access to a steady supply of rare-earth elements or products based on them. The traditional supply chain for these elements, originating in China, is increasingly fraught—so much so that some analysts are beginning to use the term “mineral war.” But the countries that are now scrambling to piece together alternative supply chains, whether by themselves or in cooperation with each other, face daunting odds. Putting aside the sheer momentum of the Chinese rare-earths juggernaut, few industries can match the rare-earths business for instability, risk, intrigue, and sheer frustration.

This tumult notwithstanding, many rare-earth experts see a way forward, and it depends on a specific kind of ore, called monazite.

“The future is monazite,” according to Jack Lifton, an analyst and the co-chairman of the Critical Minerals Institute, an organization formed to promote the creation of a North American supply chain. Lifton, who has been studying the rare-earths industry since 1962, has seen countless trends, companies, and technologies come and go, and he is not given to sweeping statements. But on the subject of monazites, he’s unabashedly bullish. “Right now,” he said, “monazite is the most important rare-earth ore.”

---

The path forward with monazite isn’t going to be smooth or straight, Lifton and others are quick to acknowledge. Monazite contains not only huge amounts of valuable rare earths, it also typically contains radioactive thorium and, sometimes, uranium, which means its handling, storage, and processing is tightly regulated by government agencies.

Nevertheless, major investment is now flowing to monazite mines and processing technologies. In the United States, Energy Fuels, which operates the country’s only conventional uranium mill, has developed its own extraction process for both light and heavy rare earths, the latter of which are currently produced almost exclusively in China. The company has spent more than $200 million to secure monazite assets in Madagascar and Brazil, and is now embarking on a second phase in which it plans to scale its rare-earth production to higher commercial levels, at an estimated cost of $410 million.

Meanwhile, though, a government project in Saskatchewan, Canada, stands as a cautionary tale for monazite backers. After six years of construction and expenditures of more than 100 million CAD, a processing plant there has produced unspecified but relatively minuscule quantities of rare earths. The processing plant, built by the Saskatchewan Research Council, was supposed to be producing 40 tonnes of rare earths per month by the end of 2024. It didn’t happen. Then “full operation,” with production of 400 tonnes of metal per year was planned for “early 2025.” That didn’t happen, either. The organization is now targeting late 2027—by which time it will have cost more than 216 million CAD, according to the SRC CEO Mike Crabtree.

Outside of North America, major monazite projects are also planned by Iluka Resources, Tronox, Hastings Technology Metals Limited, Steenkampskraal, Astron Corporation, Sovereign Metals, and Mkango Resources, among others. Lynas Rare Earths Ltd., in Perth, Australia, the largest rare-earths company outside of China, is also pouring resources into expanding its monazite mining and processing operations, most notably at its mine at Mount Weld, one of the world’s premiere monazite resources. Lynas currently processes that monazite ore at a sprawling facility in Malaysia.

As this list suggests, Earth has enormous quantities of monazite ore. It comes in two different forms. In Australia, South Africa, and China, there are massive deposits of monazite in veins of hard-rock that run through mountains and calderas. But much of the new interest in monazite is focused on a second type, called heavy mineral sands, which are the result of weathering and erosion of mineral-rich rock. Tens of millions of years of exposure to wind, water, and gravity crumbled the deposits into grains, which have accumulated in coastal areas or alongside riverbeds.

Within these heavy, mineral-rich grains, the monazite is relatively hard and chemically inert. And although the monazite might be just a few percent by weight, that monazite typically contains between 60 and 62 percent rare earths by weight, including, in many cases, the necessary rare earths for magnets.

There are vast deposits of monazite-bearing heavy mineral sands in Australia, India, Brazil, Madagascar, Mozambique, and South Africa, with smaller ones in the southeastern United States and Idaho, Sri Lanka, China, Malaysia, Thailand, Indonesia, and Vietnam.

There’s more good news. Collecting the ore simply involves dredging or strip mining the sands, as opposed to the blasting, drilling, and earth moving required to get at hard-rock ores. The sands are already in granular form, so they don’t need to be crushed or ground, like rock ores do. Separating out the heavy minerals from the sands can usually be done at the mining site, using relatively cheap magnetic or gravity-based techniques, leaving a relatively high grade of concentrate for further processing.

And now the bad news about heavy mineral sands. “The problem is they tend to have a lot of thorium,” which is weakly radioactive, said James Kennedy of ThREE Consulting, a rare-earths advisory firm based in Missouri. “Since there’s no market for thorium, you have to store it.” And under U.S. Nuclear Regulatory Commission and International Atomic Energy Agency laws, any stored radioactive material that doesn’t have a planned use or disposal pathway is considered nuclear waste.

Typical nuclear waste is considered a liability because handling, transportation, and storage—which might have to go on for hundreds if not thousands of years—are all tightly regulated by nuclear agencies.

With any future resurgence of rare earth production outside of China possibly hinging on a monazite renaissance, some observers are taking a hard look at these strict regulations that control the production of thorium and other byproducts of monazite processing, in the United States and elsewhere. It’s the tightness of those regulations, Kennedy said, that will throttle the rare-earth ambitions of the world outside China, unless governments take action now.

“You rationalize the regulations around thorium and you will end the rare-earth crisis in the U.S.,” he said. “You’ll turn rare earths from something that’s always scarce to something that is common and just naturally flows out of other mining.”

A prime example of Kennedy’s vision already exists at Energy Fuels, which operates the only functional uranium mill in the United States. It’s the only commercial company in the country licensed to process, handle, and store compounds of thorium and uranium, and among the very few licensed to store actinides of any kind. Those permits give Energy Fuels, whose core business is producing uranium, the distinction of being the only U.S. entity capable of legally processing monazite ore to extract rare earth elements.

The company is now moving aggressively to capitalize on that distinction. Energy Fuels’ main business is still uranium—last year it produced 1.72 million pounds of uranium oxide. But it has already started selling rare-earth oxides, following a modest $22 million investment in a small rare-earth processing facility at White Mesa Mill in Utah, at the same location where it processes uranium.

Energy Fuels’ rare-earth ambitions received a significant boost in June, when the Trump administration announced that it had signed a $725 million conditional loan commitment with the company. In announcing the agreement, the Defense Department’s Office of Strategic Capital said the deal would help Energy Fuels scale up its output of rare earth oxides and also help realize the company’s plans to turn the oxides into metals, a key step preceding the fabrication of magnets.

---

Most of the radioactive burden associated with processing monazite ore comes from a category of materials produced during processing. In one of the early steps, thorium and radium are often produced as waste.

Virtually all of a random sample of thorium is the isotope thorium-232, which is only weakly radioactive. Its radiation is alpha particles that cannot penetrate human skin. Nevertheless, its improper storage, in combination with other byproducts of monazite processing, can have serious consequences, particularly if it is somehow ingested.

In 1979, a subsidiary of Mitsubishi Chemical was established to extract yttrium from monazite ore in Perak, Malaysia. Shortly after the company began extraction operations, around 1982, local residents began complaining of various illnesses. With the consent of the Malaysian government, the company had built a waste channel to a nearby disposal site, where the waste was stored in open steel barrels and in an unlined waste pond. The waste overflowed from the pond into nearby soils and streams whenever it rained heavily. In 1984, a Japanese professor measured radiation levels at and near the pond and found them to be, in the most extreme cases, hundreds of times higher than internationally accepted maximums. A subsequent investigation found extremely anomalously high levels of birth defects and eight cases of leukemia in the small community near the waste dump.

A protracted legal fight ensued among local residents and the Malaysian government that culminated in the closure of the plant in 1992. By that time, so much radioactive material had been carelessly dumped that cleanup took more than two decades and cost Mitsubishi Chemical an estimated $100 million. The episode still haunts the rare-earths industry in Malaysia, where Lynas now processes monazite concentrate at the largest single rare-earths processing facility in the world.

Kennedy said that if monazite ore is to become a major source of rare earths, much larger quantities of thorium are going to need disposal, probably more than could be economically accommodated in lined and isolated tailings ponds. One of the very few possibilities for using such large amounts of thorium involves nuclear power.

Years ago, countries including the United States, Norway, and Germany had thorium-reactor research programs, and India has had a slow-moving program for decades.

But today, the only operating thorium power reactor is in China. The Shanghai Institute of Applied Physics of the Chinese Academy of Sciences has been operating a 2-megawatt molten-salt reactor since 2023.

---

For some in the rare-earths business now, the biggest challenges facing monazite projects isn’t thorium, radiation, or regulations. It’s blend of quirks, misconceptions, and self-dealing that dog the entire rare earths industry.

“The rare-earth mining business is the Afghanistan of mining,” said Kennedy; it’s a place where people and companies go with grand ideas only to become ensnared in quagmires.

One fundamental problem is the highly speculative nature of almost every aspect of the rare-earths business, which lends itself to backroom deals. In particular, the industry is rife with speculators who buy stakes in a rare-earth project with no intention of staying with it through to completion, but rather to make money on any future favorable news (a technique called “pump and dump”).

Consider the Trump administration’s decision to invest $1.6 billion in exchange for a 10 percent stake in USA Rare Earth, which has the rights to a deposit called Round Top in Sierra Blanca, Texas. USA Rare Earth hired the Wall Street firm Cantor Fitzgerald to raise $1.5 billion in equity financing for the deal. Cantor Fitzgerald, as it happens, is run by the sons of Howard Lutnick, Trump’s commerce secretary. There is currently no mine at Round Top, and there is a distinct possibility that there never will be.

“The current administration consistently fails to seek expert advice and is recklessly pouring billions of taxpayer dollars into speculative [rare earth element] processes and projects, like Round Top, that have little chance of commercial success,” said Terry McNulty, a mining consultant based in Tucson, Arizona.

At both U.S.-China summits this year, the Trump administration failed to get any significant concessions from Xi Jinping on rare earths. That means that U.S. industry is now at the mercy of volatile and sometimes vengeful policies in China.

Most of China’s domestically mined monazite ore comes from a single mine: the mammoth Bayan Obo complex, about 150 kilometers north of Baotou in Inner Mongolia. Bayan Obo, which is primarily an iron-ore mine, also happens to contain the largest known rare earths deposit in the world. It’s the source of roughly 40 percent of all the rare-earth ore mined on the planet in a typical year.

China also imports a lot of ore. Last year that amounted to more than 70,000 tonnes, says Thomas Kruemmer, a Singapore-based consultant on minerals and metals. That figure becomes more impressive when you consider the unique challenges of shipping monazite by sea. Because of its radioactivity, concentrated monazite ore is classified as Class 7 Dangerous Cargo under the International Maritime Dangerous Goods Code. That means, Kruemmer said, that the ore can only be imported through four ports in China.

China has lately stepped up its efforts to secure rare-earth ore around the world. Kruemmer said one reason is simply to make up for recently lost supplies. In 2025, the U.S. government invested $400 million in the Mountain Pass mine and processing facility in California. The deal put an end to longstanding contracts under which Mountain Pass had been selling tens of thousands of tonnes of rare-earth concentrate annually to a trading affiliate of Shenghe Resources.

But other Westerners speculate that China has strategic reasons for stepping up its efforts to acquire heavy mineral sands or other rare-earth assets abroad. By locking down rights to deposits or projects abroad, Chinese organizations are making them unavailable to non-Chinese developers, according to this reasoning.

Chinese export of rare-earth materials is now subject to restrictions, which the country’s leaders systematically tighten or loosen in reaction to developments in the U.S.-China relationship. “[E]ven if China continues to suspend its export restrictions going into 2027, it is not a reliable export partner to the United States during times of heightened geopolitical tensions,” according to an April report from the Center for Strategic and International Studies.

And the U.S.-Chinese relationship is nothing if not tense. “China is highly likely to cut off rare earth exports to the United States and its allies in the event of escalating conflict in the Indo-Pacific,” the report continued. “Securing independent rare earth supply chains before a confrontation materializes would deny Beijing one of its most potent coercive levers, ensuring that U.S. and allied military capacity remains intact precisely when it is needed most.”

Geoff Atkins, vice president for business development of the Canadian rare-earths firm Ucore Rare Metals Inc., had advice for his colleagues at a convention of the Critical Minerals Institute in 2022. “Instead of focusing on your speculative value,” he said, “instead of being able to say, ‘We’ve got the biggest project in the world … we’ve got a [net present value] of $3 billion or $4 billion,’ how about you say, ‘We’ve got a project that is going to get into operation, and this operation is going to provide the greatest value to our shareholders in the long term, not just in the short term when we can pump this up and then, you know, [early] investors can sell out.’

“Because unless there is that shift,” he warned, “we’re not going to have any hope of getting the volumes we need to give the certainty to the downstream supply chain.”

In short, the rare-earths industry outside of China needs to grow up. And sooner rather than later.