Despite aggressive moves by the United States and its allies to reduce reliance on China for rare earth materials, experts say Beijing’s dominance in the global market is likely to continue for at least another decade.
Rare earths a group of 17 metallic elements crucial for electric vehicles, wind turbines, fighter jets, and advanced electronics remain heavily concentrated in China’s control.
According to the Center for Strategic and International Studies (CSIS), China currently accounts for about 69% of global rare-earth mining and nearly 90% of all processing and refining activities. The country’s dominance stems from decades of strategic investment, government subsidies, and relaxed environmental regulations that enabled it to outpace other nations.
An industry analyst told Al Jazeera that “China dominates midstream separation, refining, and metal-making. Building expertise and capacity elsewhere is technically complex, time-consuming, and capital-intensive.”
This advantage gives China massive leverage over global supply chains, particularly as demand for electric vehicles, clean energy, and defense technology grows. For now, both the United States and Europe remain heavily dependent on Chinese exports to meet industrial and military needs.
In an effort to counter China’s control, the United States has been ramping up partnerships with allied countries such as Australia and Canada to build alternative supply chains.
The U.S. and Australia recently signed an $8.5 billion Critical Minerals Agreement aimed at boosting rare earth mining and processing capacity outside China. But experts believe progress will take years to materialize.
A consultant from Adamas Intelligence said, “The U.S. and its allies will likely need 10 to 15 years to build a supply chain capable of matching China’s scale and efficiency.”
Efforts to break China’s dominance face major obstacles.
- Processing capability remains weak outside China. Even when other countries mine rare earths, most of the materials are still sent to China for refining.
- Heavy rare earths such as dysprosium and terbium, used in high-performance magnets are almost entirely sourced from Chinese-controlled mines.
- Environmental and regulatory restrictions in Western nations slow down new projects, increasing costs and deterring investment.
According to an Aljazeera report, a Malaysian analyst said, “China’s lead is not just about resources; it’s about expertise, technology, and a fully integrated supply chain. That kind of dominance doesn’t vanish overnight.”
China’s dominance is rooted in three major advantages:
- Vertical Integration: It controls the full value chain from mining to finished products.
- Export Controls: Recent Chinese export restrictions on rare earth magnets and technologies have increased global dependence on its supply.
- Government Policy: Beijing has long treated rare earths as a strategic asset, providing incentives and financing for expansion while competitors face stricter oversight.
China’s continued dominance has significant geopolitical and economic consequences.
- The defense industries of the U.S. and its allies could face disruptions if Beijing imposes export restrictions.
- Tech manufacturers risk production delays due to raw material shortages.
- Economic analysts warn that a 10% disruption in rare earth exports could cost the global economy up to $150 billion, according to a Goldman Sachs estimate.
A report from the Washington Post notes that even with new mining projects emerging in the U.S., Canada, and Africa, refining and magnet production the most valuable stages remain bottlenecked in China.
While the U.S. and its allies continue to explore mining and recycling initiatives, experts agree that catching up to China’s rare earth infrastructure will be a long-term endeavor. The Biden administration has launched several initiatives under the Inflation Reduction Act to encourage domestic production, but results will likely take years.
As one U.S. energy official put it, “We are playing catch-up in a game that China started 30 years ago.”
Until Western nations close that gap, Beijing will remain the global center of rare earth supply a position that strengthens its influence across industries and international politics.
