Highlights

• IEA chief warns China's dominance in rare earth refining (70% market share across 19 of 20 strategic minerals) poses immediate security risks, not future ones, with refining capacity—not mining—as the critical bottleneck.
• Türkiye's Beylikova rare earth deposit ranks second globally in resources, but converting geological potential into actual production requires proven separation capacity, environmental permits, and skilled operators that don't yet exist.
• Western diversification efforts remain aspirational without scalable midstream refining infrastructure, as state-backed industrial policy becomes unavoidable to break China's supply chain stranglehold on critical minerals.

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The International Energy Agency (IEA) chief Fatih Birol warned earlier this month in Belgium that overreliance on a single country for critical minerals could spark international tensions as soon as 2026. That warning is directionally correct—and, for rare earths, arguably late. For 19 of 20 strategic minerals, China leads refining with an average ~70% market share, according to the IEA’s own outlook. In rare earths specifically, the choke point isn’t mining; it’s refining and separation, where China’s dominance is deeper and harder to unwind.

What’s notable, reports (opens in a new tab) Daily Sabah, isn’t the warning itself—it’s the tacit admission that diversification remains more aspiration than reality.

Diversification: A Principle Without a Plan

Birol’s “golden rule” of diversification is uncontroversial. The missing piece is execution. Western supply chains still lack scalable midstream capacity. Without refining, upstream discoveries don’t translate into security. This matters because refining is capital-intensive, environmentally complex, and talent-constrained—precisely why it consolidated in China over decades.

While the piece frames dependence as a future risk. In rare earths, it’s a current condition.

Türkiye’s Moment—or Marketing?

Daily Sabah highlights Türkiye as a beneficiary of diversification, pointing to the Beylikova site with ~12.5 million tons of rare earth oxides across 10 elements, ranking it second globally after China’s Bayan Obo Rare Earth Mine, per Turkish officials. The geology is intriguing. The leap—from resource to global top-five producer—is speculative.

Why? Resources are not production. Production is not refining. And refining is not magnets. Without proven separation capacity, environmental permitting, skilled operators, and long-term offtake, the claim remains aspirational. Investors should separate potential from pipeline.

The Broader Signal Investors Should Read

Birol also flags slowing grids, LNG market shifts, and geopolitics entangling energy. Those are real—but for critical minerals, the signal is sharper: industrial policy is becoming unavoidable. The same forces driving LNG into a buyer’s market won’t rescue rare earths. Here, supply security requires state-backed refining, not just friendly geology.

What’s Accurate—and What’s Softened

• Accurate: China’s refining dominance; diversification as a security imperative; geopolitical risk rising.
• Softened: The ease and timeline of diversification; Türkiye’s readiness to convert resources into value-added supply.
• Missing: The midstream reality—refining capacity, costs, and skills—where dependence actually lives.

Bottom line: The IEA is right about the risk. The hard work lies in the refineries, not the rhetoric.

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