The Malaysian factory in Australia has finally produced a batch of dysprosium oxide samples with a purity of 99.9%. The entire process was made by themselves. The official media used the four words “key breakthrough”.

But these 25 kilograms of dysprosium oxide are still far from being transformed from a sample into a product.

Why? First, the gap in the industrial chain is too large.

Australia does not have its own rare earth smelting capacity. Raw materials have to be transported from Western Australia, separated in Malaysia, and packaged in a third country for processing.

Each link in this process is incomplete and still has to be outsourced.

China’s first trump card lies right here: complete technology.

After reviewing the rare earth separation data from the Chinese Academy of Sciences system, it was found that China began to conduct cascade extraction in the 1970s, gradually optimizing the proportion scheme of each rare earth ion. Up to now, more than 50 core patents have been formed.

These things cannot be taken away by an engineer just by memorizing them in his mind. They are a complete set of production parameters, equipment ratios and on-site adjustment systems.

That is to say, even if Chinese people step forward, they still cannot take away the system’s capabilities.

The normal production lines of Chinese enterprises can operate more than five times as much in a day.

So who do you think has more advantages?

Let’s take a look at what kind of ore is used in this production line in Malaysia? It wasn’t made clear, but I checked the export records of Australian mineral sources. Currently, they mainly use the concentrate from the Mount Weld mine, and the dysprosium content is relatively low.

The grade of Australian minerals is generally poor, with dysprosium content below 1.5%. To extract the same product, five times the amount of raw material needs to be sieves.

At this point, the third card comes: pricing power.

China has a high ore content and high smelting efficiency, with a unit cost that can reach 5 US dollars per kilogram.

In Australia, labor costs are high, processes are complicated, and logistics are numerous. The average cost exceeds 12 US dollars. If you want to capture the market, you have to lose money yourself first.

The result was indeed suppressed. When Lynas released its latest quarterly profit report, its net profit dropped by 27% year-on-year, due to high costs in the smelting process, slow capacity ramp-up, and severe inventory accumulation.

The Australian Parliament also specially held a hearing to study why such a large investment resulted in such a small output.

The final conclusion is that the supply chain’s reliance on China cannot be changed and can only be sustained by state subsidies.

I think this approach is not industrial transfer but rather “risking one’s life to pull the chain”.

If you dare to pull, China will dare to play its cards. It’s not about cutting you off, but stabilizing itself.