The conventional methods (e.g., sulphuric acid roasting) for extracting rare earth (RE) from the bastnasite concentrate are inefficient and energy intensive, accompanied by serious environmental issues resulting from HF and SO2 evolution. Direct application of chloride roasting process followed by hot water leaching could cause a significant loss (up to one-third) of RE to the tailings. This is because the RE fluorides formed from bastnasite decomposition are water-insoluble. A novel process is developed in this study to deactivate fluorine by adding magnesium oxide into the bastnasite decomposition prior to chloride roasting. The added magnesium oxide reacts with the fluorine in the bastnasite to form water insoluble magnesium fluoride. As a result, more RE elements are converted to RE oxides, thereby facilitating chloride roasting and RE leaching process. Consequently, RE recovery increased significantly (ca. 90%) with a high purity of RE oxide product (containing > 94% RE oxide). (C) 2004 Elsevier Ltd. All rights reserved.