Battlefield rare earths: How the U.S. lost to China

This Planet Money episode traces the rise and fall of the U.S. rare earths industry through the story of the Mountain Pass mine in California, once the world’s largest producer of rare earth elements like europium, which were critical for color televisions and later for modern tech. The episode reveals how Molycorp, the dominant U.S. company, lost its monopoly after China, inspired by a 1960s visit to Mountain Pass, systematically built a state-driven rare earths empire through cheap financing, environmental laxity, and strict export controls. By the 2010s, China had captured 90% of global processing, using rare earths as geopolitical leverage during a diplomatic standoff with Japan. This moment shocked the world and exposed U.S. vulnerability. Decades later, the U.S. is finally responding with massive government investment, loan guarantees, and even equity stakes in domestic companies like Niocorp and MP Materials—now partially owned by both the U.S. government and a Chinese state-backed firm. The episode underscores a painful lesson: as rare earths become more essential to national security and technology, dependence on a single foreign supplier is dangerously unsustainable. Key takeaways include: 1) Rare earths are foundational to modern technology but are geopolitically volatile; 2) China’s rise was fueled by long-term state planning, not just natural resources; 3) The U.S. is now mimicking China’s industrial policy to rebuild domestic capacity; 4) Strategic partnerships with allies like Japan and Europe are being explored to stabilize supply chains; 5) Even the original Mountain Pass mine is now a hybrid entity—part U.S. government, part Chinese state-owned interest—symbolizing the complex new reality of global resource competition.