Southeast Asia has the resources to challenge China's rare earth element monopoly. Image: Facebook

Last week, Australia’s Lynas Rare Earths produced heavy rare earth elements (HREEs) at a commercial scale in Malaysia, marking the first time this has ever happened outside of China.

This breakthrough, which includes elements like dysprosium and terbium, is no small feat in a market dominated by China, which is responsible for around 60% of global rare earth production and virtually 100% of the world’s HREE supply.

Rare earth elements (REEs) are critical for the US and other advanced economies: they power technologies from electric vehicles to defense systems. The US Department of Defense, for instance, has identified HREEs as vital for missile systems, radar and advanced communications.

Yet, the US itself produces only about 12% of global REEs—and almost none of the heavy types. Without secure access to these materials, Western industries risk supply chain disruptions that could slow the clean energy transition and compromise national security.

It is for these reasons that the US recently signed an agreement with Ukraine to secure preferential access to its mineral resources—including, notably, REEs—in exchange for establishing a Ukraine reconstruction fund, as well as certain payback for the estimated US$150 billion the US has provided Ukraine since the war started.

However, a significant portion of Ukraine’s known REE reserves lies in the Donetsk region, which remains under Russian control, highlighting the fragility of relying on politically contested sources.

In this context, Lynas’ progress is not just a technical achievement but a geopolitical shift. It positions not only Malaysia, but also Southeast Asia, as a key hotspot for the future of sourcing REEs.

Until recently, there were few incentives to produce REEs in the region. But market shifts, the strategic push for supply chain diversification and the growing capacity of Southeast Asian countries to process REEs domestically promise to unlock vast potential.

Vietnam, in particular, holds some of the world’s largest REE reserves—estimated at around 3.5 million tonnes (with some sources suggesting as much as 20 million tonnes), nearly twice the size of US reserves.

Yet its production today is negligible, representing less than 1% of global output.  Major deposits in the country’s northwest, such as Dong Pao and Nam Xe, remain largely untapped, while significant areas across the country are still unexplored.

Still, Southeast Asia’s potential REE suppliers face substantial challenges: (1) environmental concerns, notably the management of radioactive byproducts like thorium; (2) a lack of technical expertise and processing infrastructure, with China still controlling key separation technologies; and (3) market and geopolitical pressures, as these countries navigate a landscape dominated by Chinese pricing power, potential retaliation and complex export dynamics.

If Southeast Asia—especially Vietnam and Malaysia—can overcome these challenges, the region could emerge as a critical node in global REE supply chains, offering the US, Europe, Japan and others an alternative to China’s near-monopoly.

However, this will require more than favorable geology; it demands investment in refining capacity, strict environmental standards, and strategic partnerships that ensure technology transfer and long-term market access.

For the West, the stakes are clear: support Southeast Asia’s rare earth ambitions—or remain perilously dependent on a single Chinese supplier.

Patricio Faúndez is country manager at GEM Mining Consulting

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28 Comments

  2. Someone must have knocked the US and the west on the head because they don’t know how to mine or process the minerals anymore. Only China does and no one else can copy it cause it’s all kept hush hush. So many westerners are in China trying to figure it out. Most are caught and jailed.

  3. Hogwash. When and where will the refining technology come from? And don’t forget the environmental studies for the processing plants.

    1. LOL. AI-google search: “While China is the world’s leading producer and processor of rare earth elements (REEs), the technology itself, including the mining and refining processes, has roots in other countries, primarily the United States. The New York Times reported that the world’s richest deposits of heavy rare earths are located in Jiangxi Province, China. China has since developed and refined these technologies domestically, leading to its current dominance in the REE sector. ”
      You might get a different result if you try DeepSeek. LOL

      1. “the technology itself, including the mining and refining processes, has roots in other countries”………”China has since developed and refined these technologies domestically”

        So the verdict is……? Google contradicts itself. China does all the processing and refining domestically. Nobody cares where the roots lie. What matters is the end-to-end supply chain is all in China.

          1. More than half of the top ten polluted cities are in India, which is also home to open defecation.

          2. 😝😝😝 You are small and deformed. Your mama say so‼️ you got no brain😁😁😁😁😁

        2. Brazil sues China carmaker BYD over ‘slave-like’ conditions.
          The Public Labour Prosecutor’s Office (MPT) in the state of Bahia says 220 Chinese workers were rescued after it began an investigation in response to an anonymous complaint.

          1. Capitalism means wage-slavery. This was the elementary truth revealed by Marx in 19th century. Britain and the US pioneered it as they were the first capitalist countries and those 19th century conditions are back with a vengeance everywhere including in the US and Europe. So, China and Brazil whose Labour Prosecutor’s Office is a sham and entirely political, are no exception.

  4. Another opinion piece (wishful thinking) dressed up as facts. The West has behaved atrociously towards Asians in the past (and still is) and they think SE Asians will do their dirty work to contain China! Seriously?

    1. Let’s fathom one fact: When Soviet Russia collapsed, the entire Eastern Bloc countries fled to the West. With its increasing power and wealth, China is claiming land from all its neighbors—even the sea between Vietnam and the Philippines. Big nations like Russia and India have problems with China’s land claims. As long as China acts like a hangman, China has no friends, but more foes than the US.

      1. Who is standing with the US against China? Not EU, not Canada, not the Middle East, not Africa, and not even Latin America. Even Japan and Korea are cozying up to China. China has no enemies, while America has few friends; perhaps the Philippines.

        1. As I said: NO great powers have friends. This also applies to China. Moreover, China is the only nation on earth that lays claim to the lands of its surrounding neighbors: Russia, Korea, Japan, Vietnam, Taiwan, the Philippines, India, and even “tiny” Bhutan suffer from China’s claims. Are these nations “friends” of China?

          1. Guess who is India’s largest trading partner? Without China, India is down the tubes.

          4. Why are you so obsessed with China? Got nothing else to do? 90% of your replies are not much substance, just insulting others and yet sound like you know better than everyone else like quoting random events like BYD plant in Brazil. So what, US is impervious to these faults? Forgot What UCC did in Bhopal in 1984 which left:
            558,125 injuries (368,478 temporary partial injuries and approx 3,900 permanently disabled) and 2,259 immediate death.

            Don’t lecture or have the urge to point everything China does. Either you are genuinely disillusioned by the propaganda of & 1.6 billion or you are part of the propanda.

          5. Why do you excuse everything the CCP, Winnie Xi Pooh and China does?
            1.6b? That’s probably India, the Chinese population has tanked.

  5. Why would SE Asia want to do this? Supply chains from China are close and reliable enough. These are merely echoes from Western paranoia. Why is the West so paranoid of other countries cutting off supply lines if they weren’t behaving like idiots and spoilt brats? If you behave badly towards others, expect them not to be nice to you. So simple, yet so difficult to understand by the Western foreign policy dimwits.

        1. Or the Tiddly Winks gaol folks Winnie Xi Pooh doesn’t like ?
          How’s the hunt for a gf going?

  6. Rare earths are mined by digging vast open pits in the ground, which can contaminate the environment and disrupt ecosystems. When poorly regulated, mining can produce wastewater ponds filled with acids, heavy metals and radioactive material that might leak into groundwater. Processing the raw ore into a form useful to make magnets and other tech is a lengthy effort that takes large amounts of water and potentially toxic chemicals, and produces voluminous waste. (Source: ScienceNews)