Abstract: Rare earths are key strategic resources, and their industrial development is crucial to national core competitiveness. Leveraging its world-leading rare earth reserves, Inner Mongolia has established a large-scale industrial system with significant clustering effects, making progress in green, low-carbon technologies and the research and development of key materials. However, while possessing a global scale advantage, the industry faces triple deep-seated contradictions: pressure between resource development and ecological protection, the structural dilemma of vast production capacity versus “low-end locking” in the value chain, and gaps between policy objectives and implementation effectiveness. To address these challenges, this paper constructs a three-dimensional governance framework of “technological innovation-industrial transformation-institutional synergy” and proposes systematic countermeasures. Specifically: in the technology-ecology dimension, it is crucial to strengthen technological breakthroughs in tailings resource utilization and implement full life-cycle environmental supervision to build a green, low-carbon, circular system. In the industry-market dimension, the focus should be on breakthroughs in key materials and the expansion of application scenarios to drive the entire industrial chain towards high-value-added segments. In the institution-governance dimension, there is an urgent need to improve laws, regulations, and cross-departmental coordination mechanisms to enhance the precision and synergy of policy implementation. This research aims to provide a theoretical explanation and practical pathway for transforming Inner Mongolia’s rare earth industry from “resource advantage” to “industrial advantage” and “competitive advantage”, also offering insights for the sustainable development of resource-rich regions globally.