Beneath the surface of twenty-first-century technology lies a group of obscure metals that most people have never heard of. Neodymium strengthens the magnets in electric vehicle motors. Europium produces the red phosphors in display screens. Lanthanum enables the catalytic cracking of petroleum. These rare earth elements, despite their name, are not particularly rare in the Earth’s crust—but their concentration in economically viable deposits, and especially the capacity to refine them, is extraordinarily limited. This scarcity has transformed these seventeen elements into objects of intense geopolitical competition.
What Rare Earths Are¶
The rare earth elements comprise the fifteen lanthanides (atomic numbers 57-71) plus scandium and yttrium, which share similar chemical properties. They include familiar names like cerium and lanthanum alongside more exotic elements such as praseodymium, dysprosium, and gadolinium. Their designation as “rare” dates to the eighteenth century, when they were isolated from unusual mineral formations; they are in fact more abundant than gold or platinum, but rarely occur in concentrations sufficient for economical extraction.
What makes rare earths strategically significant is their irreplaceable role in advanced technologies:
Permanent magnets containing neodymium and dysprosium are essential for wind turbines, electric vehicles, and precision-guided munitions. A single F-35 fighter jet contains approximately 920 pounds of rare earth materials. Each offshore wind turbine requires several hundred kilograms of rare earth magnets.
Electronics and displays depend on europium, terbium, and yttrium for color screens and energy-efficient lighting. Smartphones, televisions, and computer monitors all rely on rare earth phosphors.
Catalysts and refining use cerium and lanthanum in petroleum cracking, automotive catalytic converters, and glass polishing. Modern fuel production is impossible without them.
Defense applications extend from guidance systems and radar to night-vision equipment and communication satellites. The entire architecture of modern military superiority rests on reliable rare earth supplies.
The energy-transition has dramatically increased demand. As economies shift from fossil fuels to renewables and electric transportation, the rare earth intensity of global production rises sharply. The International Energy Agency projects that rare earth demand could increase by a factor of seven by 2040 under scenarios consistent with climate targets.
China’s Dominance¶
No discussion of rare earth geopolitics can avoid China’s commanding position. Chinese dominance operates at two levels: mining and, more critically, processing.
China currently produces approximately 60-70 percent of the world’s mined rare earths. This share has actually declined from its peak of over 95 percent in 2010, as other nations have developed mining capacity. But mining represents only the first stage of a complex supply chain. The more consequential bottleneck lies in processing—the separation, refining, and manufacturing of rare earth oxides, metals, alloys, and magnets.
Here China’s position is even more formidable. Chinese facilities process roughly 85-90 percent of the world’s rare earth oxides and an even higher share of rare earth metals and permanent magnets. Even rare earths mined in the United States, Australia, or Myanmar are typically shipped to China for processing, because no other country possesses comparable capacity at competitive costs.
This dominance did not emerge by accident. Beginning in the 1980s and accelerating under Deng Xiaoping’s economic reforms, China invested systematically in rare earth extraction and processing. Deng’s famous 1992 observation that “the Middle East has oil; China has rare earths” signaled strategic intent. State subsidies, relaxed environmental enforcement, and long-term industrial planning built an ecosystem that foreign competitors could not match.
The concentration has strategic implications beyond commercial markets. In 2010, following a maritime dispute with Japan over the Senkaku/Diaoyu Islands, China restricted rare earth exports to Japanese manufacturers. Though Beijing denied any formal embargo, customs delays effectively cut off supplies for weeks. Japanese electronics and automobile firms faced production disruptions; the episode exposed how dependency on Chinese rare earths created vulnerability to political pressure.
More recently, China has restricted exports of gallium, germanium, and various rare earth processing technologies in response to American semiconductor export controls. The message is clear: weaponized interdependence operates in both directions.
Supply Chain Vulnerabilities¶
The rare earth supply chain presents multiple points of failure:
Geographic concentration means that disruptions in a small number of locations—whether from natural disasters, political instability, or deliberate action—can cascade through global manufacturing. The Bayan Obo mine in Inner Mongolia alone accounts for a substantial fraction of world production.
Processing bottlenecks are even more severe than mining constraints. Building separation and refining facilities requires billions of dollars in capital investment, years of construction, specialized expertise, and tolerance for significant environmental impacts. The chemical processes involved generate radioactive thorium and uranium byproducts, acidic wastewater, and air pollution that many jurisdictions refuse to accept.
Single points of failure exist throughout the chain. Certain rare earth magnets essential for defense applications come from a handful of Chinese suppliers. Replacement would require not merely finding new sources but recreating entire industrial ecosystems.
Long lead times characterize new projects. Developing a rare earth mine from discovery to production typically takes seven to fifteen years. Processing facilities require similar timescales. This means that even aggressive diversification efforts today will not yield results for a decade or more.
The vulnerability extends beyond individual companies to national security. A conflict in the Taiwan Strait, for example, would likely disrupt rare earth flows regardless of whether China formally weaponized supplies. Maritime shipping disruptions through the Strait of Malacca or the South China Sea could interrupt deliveries even if Chinese export policy remained unchanged.
Diversification Efforts¶
Recognition of these vulnerabilities has prompted efforts to diversify rare earth supply chains:
Mining expansion outside China has accelerated. Australia’s Lynas Rare Earths operates the Mount Weld mine and has constructed processing facilities in Malaysia and, more recently, Texas. The Mountain Pass mine in California, once the world’s largest rare earth operation, has resumed production under MP Materials. Projects in Canada, Greenland, Brazil, and various African nations are in development, though few have reached commercial production.
Processing investment has become a priority. The United States has allocated billions of dollars through the Defense Production Act and Inflation Reduction Act to develop domestic separation and refining capacity. The European Union’s Critical Raw Materials Act aims to ensure that at least 40 percent of European rare earth consumption comes from domestic processing by 2030. Japan, traumatized by the 2010 disruption, has invested heavily in alternative supplies and processing partnerships.
Stockpiling provides short-term resilience. Several nations maintain strategic reserves of rare earth materials, though the quantities and compositions are often classified. Stockpiles buffer against temporary disruptions but cannot substitute for diversified production in extended conflicts or permanent supply shifts.
Allied coordination has intensified. The Minerals Security Partnership, launched in 2022, brings together the United States, European nations, Japan, South Korea, Australia, and others to coordinate investment in critical mineral supply chains. The partnership aims to reduce collective dependence on China while avoiding destructive competition among allies for limited non-Chinese supplies.
Progress has been real but limited. China’s processing advantage reflects decades of accumulated investment, expertise, and infrastructure that cannot be replicated quickly. Moreover, new projects outside China often face environmental opposition, permitting delays, and difficulty attracting capital for facilities that compete against established Chinese operations enjoying implicit state support.
Recycling and Alternatives¶
The long-term response to rare earth vulnerability includes reducing dependence on primary extraction:
Recycling offers theoretical promise but practical challenges. Less than one percent of rare earths are currently recycled. The elements are used in small quantities dispersed across millions of devices; collection and separation are expensive and technically difficult. End-of-life electronics contain valuable rare earths, but recovering them economically requires technologies still in development. Wind turbines and electric vehicle batteries present more concentrated sources, and recycling infrastructure for these applications is expanding.
Substitution research seeks alternatives to rare earth magnets and other critical applications. Some progress has been achieved: ferrite magnets can substitute for rare earth magnets in certain applications, albeit with performance penalties. Toyota has developed electric motors that reduce dysprosium content. Academic researchers are exploring entirely new magnetic materials that might eventually displace rare earth magnets altogether.
Design efficiency can reduce rare earth intensity. Improving motor designs, extending product lifespans, and engineering applications to use smaller quantities of rare earths all contribute to demand management. These approaches are incremental but cumulatively significant.
Urban mining—recovering rare earths from waste streams, mine tailings, and industrial byproducts—represents an emerging opportunity. Coal ash, phosphate mining residues, and electronics waste all contain rare earth concentrations that may become economical as primary prices rise and extraction technologies improve.
None of these approaches will eliminate reliance on primary rare earth production in the foreseeable future. Demand growth from the energy transition will likely outpace gains from recycling and substitution for decades. But a portfolio of approaches can reduce the severity of dependency and limit the leverage that supply concentration provides.
Geopolitical Implications¶
Rare earths illustrate broader patterns in geoeconomic competition:
Resource geography shapes strategic options. China’s rare earth dominance reflects geological endowments but also industrial policy choices. Other nations possess deposits but not the processing infrastructure to exploit them. The distribution of critical minerals influences which states can pursue genuine strategic-autonomy and which remain dependent on others.
Technology and resources intertwine. The minerals that enable advanced manufacturing are themselves products of sophisticated industrial processes. Access to rare earths depends not merely on mining rights but on mastering complex metallurgy, chemistry, and engineering.
Environmental externalities concentrate where regulations permit. Chinese rare earth processing imposes significant environmental costs that other jurisdictions have been unwilling to accept domestically. The result is a form of pollution arbitrage that reinforces geographic concentration.
Time horizons differ between markets and strategy. Private capital seeks returns within years; building resilient supply chains requires patient investment over decades. This mismatch helps explain why diversification rhetoric often exceeds actual progress.
The rare earth challenge will persist for the foreseeable future. No near-term scenario eliminates Chinese processing dominance; even aggressive diversification will take many years to alter the fundamental supply picture. Managing this dependency—through stockpiles, diversification, recycling, and diplomatic engagement—will remain a central task for policymakers navigating the intersection of technology, resources, and great power competition.