By Adolfo Quizon Paglinawan

 

Part 13: An old order gives way to a new one, reshaping global geopolitics

Pax Silica is almost a mission impossible. It can flicker forward for mankind if Donald Trump’s trip to Beijing thumbs up “cooperation”. Or it can die with a thumbs down “decoupling”.

The next US president on January 20, 2029 can also collapse it altogether, repeating what Trump did to the Trans-Pacific Partnership, when he succeeded its author Barack Obama.

It pays to consider that agreements for the initiative, with the Philippines as participant #13, have been signed at the third tier of an undersecretary. In diplomatic circles, this suggests tentativeness often allowing a margin for disavowal.

What the United States is not telling its joiners is that it takes more than just planning for a Hollywood movie for Pax Silica to result into a happy ending.

Mining rare earth is complicated but easy.

But rare earth separation onto refining, is technically problematic and environmentally costly, requiring hundreds of extraction stages and deep expertise that China has mastered over decades while Western nations offshored this ‘messy’ process.

China dominates 85-90% of global rare earth refining and 95% of high-strength magnet production through decades of state investment, giving Beijing enormous leverage over defense, electronics, and green energy supply chains.

Reuters reported that building U.S. rare earth processing catch-up capacity will take 5-10 years minimum due to severe knowledge gaps, environmental permitting challenges, and the time needed to construct and optimize complex chemical facilities at scale.

This timeline is crucial for the U.S. to ensure it can meet its defense and technology needs for the future.

With that delay, however, how far advance would China have outstepped the US in terms of technological advancement, component manufacturing, product development and market expansion?

A forum by Rare Earth Exchanges (REEx) based in Salt Lake City in Utah issued a three-point summary of its comprehensive research and analysis of the current supply-chain situation.

China’s near-monopoly

China’s grip on rare earth refining and magnet production did not happen by chance. Starting in the 1980s, China invested heavily in developing its rare earth industry – from mining to separation to finished magnets. Decades of state support, including subsidies for domestic refiners and lax environmental oversight, allowed Chinese producers to undercut competitors worldwide.

By the early 2000s, this strategy had driven others out of the market; for example, the U.S. Mountain Pass mine – once a leading rare earth source –collapsed in 2002 amid cheaper Chinese supply and environmental issues, effectively handing China control of the supply chain.

As recent as 2025, and even as we speak today, countries that mine rare earth ores, such as the Unites States and Australia, has to still send most of their output to China for refining, due to a lack of local processing facilities.

Beijing has leveraged this dominance strategically, at times restricting exports or flooding the market to influence prices and keep its edge. Crucially, China’s dominance extends to the manufacturing of neodymium-iron-boron (NdFeB) magnets, used in EV motors and wind turbines.

Owning the entire chain from raw material to finished magnet gives China a powerful position that cannot be easily bypassed

Chokepoints at a glance

While the 17 rare earth elements (REEs) are geochemically abundant—some as common as copper or lead—the primary challenge is the mid-stream refining and separation process. The “problem” with refining is a combination of chemical complexity, environmental risk, and geopolitical concentration:

1. Chemical Complexity

REEs are chemically very similar, meaning they “stick together” and are extremely difficult to separate into individual, pure forms.

• Solvent Extraction: This is the industry standard but is notoriously inefficient. It often requires hundreds of stages of mixer-settlers where the ore is repeatedly dissolved in toxic acids and organic solvents to strip away one element at a time.
• Specialization: Processing is more akin to a specialty chemical industry than traditional mining. Different end-users (e.g., for EV magnets vs. fiber optics) require vastly different purity levels.

2. Environmental & Health Hazards

Refining generates significantly more toxic waste than the initial mining of the ore.

• Toxic Byproducts: Every ton of refined rare earth produces approximately 2,000 tons of hazardous waste. This includes millions of cubic meters of waste gas and highly acidic wastewater.
• Radioactivity: Many rare earth deposits are naturally bound with radioactive thorium and uranium. Refining releases these into the environment, requiring the treatment of roughly 1.4 tons of radioactive waste per ton of rare earth oxide produced.

3. Geopolitical Implication

While many countries mine REEs, very few have the infrastructure to refine them.

• Refining Monopoly: To reiterate, when China controls roughly 90% of global refining capacity, even while countries like the U.S. or Australia mine their own ore, they have to ship the concentrate to China for final purification because they lack domestic facilities.
• Infrastructure Costs: Refining plants are incredibly expensive to build and operate due to the strict environmental regulations and technical expertise required.

Rare earth separation

Refining rare earths is technically challenging and environmentally arduous, which is a core reason the U.S. and others ceded this step to China. Unlike common metals, rare earth elements are usually found together in the same ore and have very similar chemical properties. Extracting them requires bespoke, multi-stage chemical processes to separate each element one by one.

The primary method, solvent extraction, involves hundreds of liquid-to-liquid extraction stages and chemical “tweaks” to gradually tease apart the elements It’s an elaborate and delicate operation – a full separation plant can entail countless iterative cycles of acid baths, solvent mixers, and stripping stages to isolate high-purity REEs.

Minor errors in acidity, flow rate, or reagent mix can spoil the purity, meaning the process demands deep expertise and constant fine-tuning. Chinese engineers have mastered this art through decades of trial and error, developing an intuition for the minutiae of REE chemistry that is hard to replicate elsewhere.

Rare Earth Exchanges continues “the refining process is not only complex but also ‘messy’ and polluting. Strong acids and organic solvents are used, generating toxic waste and often involving radioactive byproducts that must be contained. For every ton of rare earth oxide produced, enormous volumes of waste rock and contaminated water are generated.”

China was willing to shoulder these environmental costs for decades – one reason Western countries were happy to offshore REE refining to China in the first place. Strict environmental regulations in the U.S. and Europe, however, make building and operating such refineries extremely expensive without heavy subsidies. China’s comparatively lower regulatory constraints gave it a significant cost advantage.

In short, China “nailed down” the element-by-element separation process at industrial scale by combining technical prowess with a tolerance for the high costs – both financial and environmental – that the West was unwilling or unable to bear.

Bridging the gap

Consequently, the West now has a tremendous knowledge and talent gap in rare earth chemistry.

Only a handful of veteran specialists outside China know how to run large-scale separation operations, versus thousands of experts in China. Beijing has even taken steps to guard its hard-won know-how, reportedly requiring rare earth technicians to register and restricting them from leaving the country to prevent technology leakage.

This means new Western projects often struggle to find the right expertise and must essentially start from scratch in developing processing know-how.

Even with abundant funding now being directed to “onshore” rare earth capabilities, new refineries and magnet plants take time to build and ramp up. Feasibility studies, permitting construction of complex chemical facilities given environmental hurdles, and the fine-tuning of processes can stretch on for years.

This is where Pax Silica intends to begin.

The U.S. government and its allies are now funding projects to break this dependency, from reopening domestic mines to backing new separation technologies and recycling initiatives. But these efforts are just beginning to chip away at a decades-long head start.

Simply put, China’s rare earth refining juggernaut cannot be replaced overnight. It will take sustained investment, innovation, and training over the better part of this decade to diversify the supply chain even modestly.

Consumption

On January 23, 2026, Cell Press published a report on a sustainability symposium supported by the  Deep Earth Probe and Mineral Resources Exploration, entitled Science for Society, accompanied by a series of charts. One was a glaring side of how the United States is not sharing openly with Pax Silica recruits the finer details of REE consumption:

While China’s direct exports of concentrated rare earth materials have been widely recognized, this chart shows that a substantial share of RE is also delivered indirectly through global supply chains. By constructing detailed inventories of China’s RE flows and downstream uses, we trace and decompose these indirect exports from 1990 to 2020, revealing China’s critical yet often overlooked role in sustaining international RE supply.

The results reveal that over 60% of RE resources extracted in China were exported to other regions during this period, of which approximately 62% were direct exports and 38% were embedded indirectly in traded goods.

The overall trade structure has shifted from direct to indirect exports, highlighting the growing role of indirect RE flows. The United States (US), Japan, and Europe emerged as the three main destinations of China’s RE exports.

By 2020, indirect RE trade accounted for 60% of China’s total RE exports to the US, 30% to Japan, and 68% to Europe, respectively.

The remaining rare earth consumption in the United States was dominated by petroleum catalysts (by 74% in 2022). In comparison, REs consumption in China was more diverse under its “science for society” orientation contributed to metallurgy (16%), petroleum (10%), glass and ceramics (9%), and other consumer products (5%).

          This is to say that if ever Pax Silica takes off, it will also have to double-time applications from other than high end catalyst for petroleum products and magnets for military and civilian uses to low-end but wider uses for ordinary consumers, where China has already established a great-leap forward in terms of economies of scale and ergo affordable prices.

Pain point

For Washington, this is not just a trade problem. It is structural.

The U.S. depends on China for materials used in EVs, chips, and defense technology. But expanding that means long-term investment, higher costs, and a willingness to take on pollution and regulation battles at home.

So even as tariffs rise, the rare earth supply chain still runs through China. And that’s not something you can change with a policy tweet.

Rare earths are not rare. What is rare is China’s ability to refine them at scale, manage the waste, and integrate every stage of production into a single ecosystem. That’s why every time Beijing adjusts its rare earth policies, global markets react.

It is not about politics. It is about structure, capacity, and time — three things that can’t be replicated overnight. Three things that spells power, and power where it counts most.

The Council; on Foreign Relations said “This structure effectively weaponizes the supply chain, turning rare earth elements from a mere resource into a strategic, geopolitical tool.”

The goal of the Pax Silica is to form a network of like-minded countries that together will build resilient and secure global tech supply chains, including and especially the mining and refining of critical minerals, that operate independently of China.

It’s an explicit acknowledgment that national security and economic security are tightly intertwined, an idea that for whatever reason has taken a while to gain traction even in the United States.

Closer to home

But why is Philippine government spinning this mission impossible on the dying years of the Marcos Jr administration?

Department of National Defense (DND) Secretary Gilberto Teodoro Jr. said the Pax Silica will greatly beef up the Philippines’ resiliency and help in its ongoing industrialization efforts. As always, Teodoro utterances are a bridge to nowhere. Defensively, he quipped that  the initiative is not a “war driven imposition” but joining a manufacturing and high technology cycle.

Under Pax Silica, the US intends to establish a 4,000-acre (1,600 hectare) industrial zone in the Luzon Economic Corridor (LEC) to serve as the “first AI-native industrial acceleration hub” where specific industrial activities can be shaped by market demand.

The project sounds good but according to The Diplomat, a prestigious online magazine for international relations, it is peppered with opaque corporate jargon and does not provide a lot of clarity on key details,

With the launch of this industrial hub, the Philippines, which has significant reserves of nickel, copper, chromite and cobalt, is now being brought into the fold of producing semiconductors and electronics.

Glib talk but as we have discussed earlier, securing access to critical minerals and refining them for applications, requires heavy lifting.in financial investment, base technology, infrastructure and human expertise.

What is not only unpopular but runs into Constitutional walls, is that the hub will have diplomatic immunity and operate under US common law, a clear surrender of Philippine sovereignty akin to the status of what was once true to in-country US military bases until their closure in 1991. The 1987 Constitution of the Philippine requires that this format be entered into a level of a bilateral treaty and ratified by the Senate of both countries.

The recent launching of a Tomahawk missile by the US, from its Typhon launcher in Tacloban in Eastern Visayas to Laur in Central Luzon, a distance of 1,004 kilometers did not augur well for this template.

Moves are now brewing to abrogate the 2014 US-PH Enhanced Defense Cooperation Agreement (EDCA) that was affirmed by the Supreme Court of the Philippines as not unconstitutional because it only serves as an enforcement of the pre-existing Mutual Defense Treaty signed between the two countries in 1951.

While the distance between Batanes Island and the nearest point in the China, the US-perceived enemy, is 750 kilometers, variants of this weapon can be customized up to 2500 kilometers with nuclear warheads.

This means the Tomahawk has converted Philippine intentions for “defense” onto the US ambition of a land-based offensive capability, violating our renunciation of war as an instrument of war, and subverting our treaties with ten ASEAN countries for neutrality and non-nuclear proliferation.

Conclusion

Inversely, this brings Pax Silica how this deal would benefit the national interests of partner countries? It’s pretty clear what the U.S. hopes to get out of it – reduced reliance on China, but it’s less clear what the Philippines will get in return. It promises investments and job creation but the United States is already running on its third year of delay delivering US$1.5 million in pledges for modernization of our Armed Forces?

And what about technology transfers, research and development and upskilling?

Based on the information that has been publicly disclosed, Pax Silica appears to dovetail EDCA sites, that have now obviously been transformed to forward-operating (military) bases of a foreign country.

The glaring experience in the current US wars in Ukraine and the Middle East, is that immediately after military targets are razed to the ground by attacking forces, industrial installations for the manufacture, assembly and warehousing of suspected war materials and facilities used for command and operational control of war activities, were next to be targeted.

Pax Silica fits that profile. It sound good on paper but lack the capacity to scale.

Or is it being offered as a carrot to freeze the ball while the descending hegemon, the United States of America, leverages ascending China and mulls for its next war in Asia-Pacific to support its own military industrial complex?

Magnets for war, anyone?

   

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