EDITOR'S CORNER: Are China Controlling the Rare Earth Market?

Rare earths are extremely important to our modern world. You can find them in batteries, navigation systems, and other critical components used in defense equipment — such as jets, bombs, and missiles, for example. China controls a large portion of this market, both in mining rare earths and especially in refining them. What is happening now, and why is China restricting access to these materials?

In this blog post, let's take a look at what rare earths are, why China holds a monopoly over them, and why it is now restricting access to these resources.

WHAT ARE RARE EARTHS?

Rare earths, also known as rare earth elements, are a group of 17 metallic elements essential to many modern technologies. Despite their name, most of these elements are quite common — they are relatively abundant in the Earth’s crust but are seldom found in concentrated deposits that are easy to mine. These elements include well-known names such as neodymium, dysprosium, and cerium, which are vital for producing powerful magnets, rechargeable batteries, and various electronic components. China holds the world’s largest reserves of rare earth elements, estimated at around 44 million metric tons. While countries like Vietnam and India also have notable deposits, their combined reserves still fall well short of China’s vast supply. Russia follows with roughly 3.8 million metric tons — less than a tenth of what China holds.

You can find rare earths in nearly every piece of advanced technology today — from smartphones and electric vehicles to wind turbines and medical imaging devices. The pharmaceutical industry also relies on rare earth elements in the machinery used to produce many of the medicines we use every day. They are equally critical for military applications, where high-performance materials and precision technologies are essential. In short, rare earths are the hidden building blocks of the modern world, quietly powering much of the technology we depend on every day.

HOW DOES CHINA CONTROL MOST OF THIS MARKET? AND WHY ARE THEY RESTRICTING IT?

China controls most of the rare earths market through a combination of vast reserves, state-backed industrial policy, and dominance in refining and processing. While other countries also have rare earth deposits, as outlined earlier, China has invested heavily in mining infrastructure and refining technology for many decades. This has allowed it to build a highly efficient and vertically integrated supply chain. One of the main reasons China handles most of the world’s refining is because the process is extremely costly, environmentally damaging, and highly polluting. Many countries that once had refining capabilities moved away from it long ago, as their populations opposed the environmental impact of such operations. In contrast, China’s lower production costs and tolerance for the pollution associated with refining have made it difficult for other nations to compete.

The Chinese government has also played a central role in consolidating the industry and managing exports in a way that strengthens domestic production and limits foreign competition. In recent years, several major companies have been merged into large state-owned groups, further tightening China’s control over the sector and making it difficult for outsiders to penetrate its domestic market. This strategic dominance has made many countries — especially those dependent on advanced manufacturing and defense technology — reliant on Chinese supplies. As a result, even though other nations possess rare earth deposits, few have the capability to process them at the scale or cost that China can achieve.

China is restricting access to rare earths primarily to protect its strategic interests and maintain control over a resource vital to global technology and defense industries. In simple terms, the country aims to limit the export of materials that could be used to produce weapons or military equipment that might one day be used against it. Economically, the move also strengthens China’s position by safeguarding domestic manufacturers, encouraging foreign companies to relocate production to China, and increasing its geopolitical leverage. At the same time, the government is concerned about resource depletion and the environmental impact of mining and refining. Adding to this, China’s own demand for rare earths continues to grow rapidly as it expands its high-tech and clean energy industries.

CAN WE DIVERSIFY AWAY FROM CHINA?

Diversifying away from China’s dominance in the rare earth market is challenging but not impossible. Several countries, including the United States, Australia, Canada, and Japan, are investing heavily in developing their own rare earth mining and refining capabilities. Several private companies in Australia and America are working to strengthen alternative supply chains that reduce dependence on China. Governments are also supporting these efforts through funding, tax incentives, and partnerships to build refining facilities and processing plants outside of China. The goal is not only to secure a stable supply of these critical minerals but also to ensure that the environmental and social costs are better managed.

Another promising path is recycling and innovation. Researchers are developing new methods to recover rare earth elements from electronic waste, electric vehicle motors, and wind turbine components — helping reduce the need for new mining. Additionally, scientists are exploring alternative materials and technologies that can replace or reduce the use of rare earths in certain applications. However, these solutions are still in their early stages, and building a fully independent and sustainable supply chain will take time. 

MY OPINION

In my opinion, it is crucial that we reduce our dependence on China for critical resources. That includes rare earth elements. Relying so heavily on a single country for materials that power everything from smartphones to fighter jets puts the global economy, and particularly the West, in a vulnerable position. With tensions already high over issues such as Taiwan, China holds significant leverage that could be used as an economic or political weapon. We have seen this with Europe and Russian gas, for example. 

If the Chinese Communist Party were to halt rare earth exports tomorrow, the consequences would be severe. Many industries would face immediate disruptions! Manufacturing would slow, costs would skyrocket, and entire sectors could grind to a halt. 

This scenario shows us the urgent need for Western nations to accelerate efforts in recycling, innovation, and alternative sourcing. Building a resilient and independent rare earth supply chain isn’t just an economic necessity, it’s a matter of national security and long-term global stability.

CONCLUSION

In conclusion, rare earths have become far more than just a collection of obscure elements — they are the foundation of modern technology and a powerful tool of global influence. China’s dominance in mining, refining, and export control has given it a unique position at the center of this strategic market, shaping everything from global supply chains to international security. 

As other nations race to diversify and develop cleaner, more resilient sources, the competition over rare earths is quickly becoming a defining feature of 21st-century geopolitics. The challenge ahead lies in balancing technological progress, environmental responsibility, and economic independence in a world increasingly powered by these hidden elements.