Separating the lanthanides: physical versus chemical methods?

Photo credit: Reuters**

There has been much talk about rare earth metals recently. In short, the People’s Republic of China has become the dominant source of rare earth* elements in the world; the PRC government has used that fact to their strategic advantage. I don’t really wish to get into the political debate; suffice it to say that I think there’s more smoke than fire here and that predictions of war are probably overblown.
There are quite a number of articles on the subject, but only one talked about the chemistry. I was struck by a quote in an article on ForeignPolicy.com by Tim Worstall, a trader in scandium and other rare earths (now there’s a job I didn’t know about):

Another possibility is that we find a new and different way to separate rare earths, as we find new and different sources for the ores. The main difficulty is that chemistry is all about the electrons in the outer ring around an atom, and the lanthanides all have the same number of electrons in that outer ring. Thus we can’t use chemistry to separate them. It’s very like the uranium business: Separating the stuff that explodes from the stuff that doesn’t is the difficult and expensive part of building an atomic bomb precisely because we cannot use chemistry to do it — we have to use physics.

It’s quite apparent that Mr. Worstall is referring to the unusual electronic configuration of the lanthanides, where the 4f orbitals are ‘hidden’ behind the 4d and 5d orbitals. This electronic configuration is also responsible for the lanthanide contraction, in which the atomic radii of the lanthanides are smaller than predictable by periodic trends.
However, I’m not quite sure what Mr. Worstall means when he draws a distinction between chemical and physical separation of the elements. Both this article (from Oxford) and the Wikipedia article on the lanthanides suggest that countercurrent exchange methods are used on industrial scale; it appears that separation is performed by means of ionic radii and size. While this certainly doesn’t rely on the reaction chemistry of the lanthanides (because it appears they all act similar), I have a difficult time calling these techniques physics-based.
Readers, can you shed any more light on the issue? Do you agree with Mr. Worstall’s distinction between chemical and physical means of purifying elements?
*It should be noted that the rare earths are, as they say, neither rare or nor earths.
**Photo from this International Business Times article.

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