Miners are seen at the Bayan Obo mine containing rare earth minerals, in Inner Mongolia, China July 16, 2011. Picture taken July 16, 2011. Photo: REUTERS/Stringer/CHINA OUT/File Photo
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Miners are seen at the Bayan Obo mine containing rare earth minerals, in Inner Mongolia, China July 16, 2011. Picture taken July 16, 2011. Photo: REUTERS/Stringer/CHINA OUT/File Photo
The rare earth metal market is dominated by China, which utilizes its leverage as a powerful tool in geopolitical disputes, particularly those inflamed by trade actions like the US tariff war initiated by President Donald Trump.
Here’s a breakdown of how China came to control the rare earths industry, why these materials are indispensable to modern economies, and how renewed trade tensions are shaping the global market.
Workers transport soil containing rare earth elements for export at a port in Lianyungang, Jiangsu province, China October 31, 2010. REUTERS/Stringer/File Photo
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Workers transport soil containing rare earth elements for export at a port in Lianyungang, Jiangsu province, China October 31, 2010. REUTERS/Stringer/File Photo
China’s dominance over the rare earth supply chain
China’s control over rare earth metals-17 elements vital to clean energy, electronics, and defense technologies-extends across the entire supply chain. It mines around 60% of the world’s rare earths and processes over 80%, while producing roughly 90% of high-performance rare earth magnets.
The country also holds more than half of global rare earth reserves and, until 2023, accounted for 99% of the world’s heavy rare earth element processing. This dominance gives Beijing significant influence over a critical component of global manufacturing and defense.
China’s control is underpinned by three main pillars:
- Technological Expertise: Chinese firms have mastered complex refining and magnet production technologies. Between 1950 and 2019, China filed nearly 26,000 rare earth-related patents-far outpacing the US and Japan.
- Financial Strategy: Beijing has historically tolerated operating losses across the rare earth supply chain to keep global prices low, discouraging non-Chinese competitors from entering the market.
- Institutional Control: Export controls and bans on sharing extraction technologies give the government direct oversight of strategic materials, ensuring that China’s dominance remains secure.
A general view shows an under construction factory owned by Neo Performance Materials, that will produce rare earth permanent magnets used in electric vehicles and wind turbines, in Narva, Estonia in this handout picture dated to June 2024. Photo: Neo Performance Materials/Handout via REUTERS
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A general view shows an under construction factory owned by Neo Performance Materials, that will produce rare earth permanent magnets used in electric vehicles and wind turbines, in Narva, Estonia in this handout picture dated to June 2024. Photo: Neo Performance Materials/Handout via REUTERS
Rare earths are essential components in technologies that power modern life and national security.
A sample of terbium (Tb) is displayed at the Laboratory of Physics and Material studies (LPEM) in Paris, France, June 23, 2025. Photo: REUTERS/Benoit Tessier/File Photo
A sample of terbium (Tb) is displayed at the Laboratory of Physics and Material studies (LPEM) in Paris, France, June 23, 2025. Photo: REUTERS/Benoit Tessier/File Photo
