Businesses and governments across the West are gearing up to counter China’s dominance in a key component of modern technology: the magnet.
But the dozens of companies jostling for government support will struggle to establish a supply chain to rival China’s rare-earth magnet industry, which has a decadeslong head start and steadfast state support, analysts and executives say.
Powerful magnets made of rare-earth minerals are essential components in electric-vehicle motors, wind turbines and other technology. China mines over 70% of the world’s rare earths and is responsible for 90% of the complex process of turning them into magnets, analysts say. That dominance gives Beijing sway over makers of various fast-growing technologies.
The U.S. government is investing tens of millions of dollars in efforts to mine and process rare earths. President Biden in February signed an executive order directing a review of supply chains for critical materials, including rare earths. His recent infrastructure plan also pledged investment in rare-earth separation projects. Officials in Europe, Canada, Japan and Australia are getting their checkbooks out too.
Yet Western companies are mostly years away from contributing to a stable supply of rare earths, or processing them into separate minerals and turning them into useful products like magnets, analysts say.
