China controls three-quarters of the global market and nobody, especially investors, wants to mess with that
Somewhere on the outskirts of Montreal, Kiril Mugerman, chief executive of Geomega Resources Inc., aims to build a recycling plant that can produce rare earth oxides — the obscure set of elements that recently emerged as a flash point in the U.S.-China trade war.
Turning to recycling marks an about-face from the original game plan for his company, which spent millions of dollars trying to prove it could mine rare earths from a patch of land in northern Quebec.
Its story encapsulates the scaling back that has occurred throughout the Canadian rare earths’ sector over the last decade, shrinking down from more than a hundred explorers to just a handful of companies, mostly studying opportunities downstream from mining, in areas such as refining or recycling.
Found inside green energy items such as electric vehicles and wind turbines but also washing machines and hard drives, rare earths face growing demand.
But China dominates the supply chain, and fears that it could manipulate the market has kept investors away, even as the U.S. and Canadian government discuss ways to help foster the sector in North America.