Last month, China’s Ministry of Industry and Information Technology launched interim measures to tighten controls on ‘rare earth’ mining and processing. The guidelines are the newest in Beijing’s efforts to centralise oversight of extraction, exports, and refining.
While China’s buying and selling companions corresponding to India and the U.S. are looking for various sources to scale back dependency, information reveals that China’s dominance in uncommon earths stems not solely from useful resource availability however extra so from its longstanding energy in mining and analysis capability.
Rare earth components (REEs), regardless of the identify, usually are not significantly scarce. According to the International Energy Agency (IEA), they comprise 17 metals, sometimes grouped into gentle uncommon earths (LREEs) — together with lanthanum, cerium, praseodymium, neodymium, samarium and europium — and heavy uncommon earths (HREEs) corresponding to gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium and yttrium. Promethium will not be included in the checklist as it’s radioactive and doesn’t happen in mineable portions.
They are essential parts in clear power applied sciences corresponding to electrical automobiles and wind generators, in addition to in defence functions. Rare earths are additionally important for high-tech units together with smartphones and arduous drives.
Although uncommon earth deposits exist in nations corresponding to Brazil, Australia, and India, China holds almost half of the global reserves. Chart 1 reveals country-wise share (in %) of global reserves of uncommon earths (as per U.S. Geological Survey 2025)
It can be the world’s largest producer, contributing over 60% of global manufacturing in the final 5 years. Chart 2 reveals the country-wise share of the estimated global mine manufacturing of uncommon earths in the final 5 years
Beyond extraction, China dominates the worth chain with round 92% of global refining capability, in response to the IEA. Moreover, in the final 5 years, China has been the most important exporter, supplying near 30% of global demand. Chart 3 reveals the country-wise share of the estimated global mine manufacturing of uncommon earths in the final 5 years
Charts 1, 2 and 3 set up China’s dominance throughout reserves, manufacturing, and exports.
In April, amid escalating U.S.-China commerce tensions, Beijing imposed export restrictions on seven uncommon earth components. The transfer focused components used in neodymium–iron–boron (NdFeB) magnets — important for clear power applied sciences — in addition to these essential to ceramics, phosphors, metal, optical glass, fibres, and aerospace functions.
Chart 4 reveals the sector-wise demand for uncommon earth components beneath export controls introduced by China in April
China’s choice to curb uncommon earth exports, amid tit-for-tat tariffs, dealt a big blow to the U.S., which stays closely dependent on Chinese provide.
Chart 5 reveals the key importers of China’s uncommon earth. Figures in % present their share in China’s exports
The U.S. is the second-largest importer of Chinese uncommon earths, after Japan. India, too, is closely dependent on China for its uncommon earth imports. Since 2021, greater than 75% have come from China.
Under China’s interim measures introduced final month, Chinese corporations should now function inside government-set quotas for varied minerals and procure approval to commerce in uncommon earths. This will not be the primary time China has tightened its uncommon earth commerce. It has already prohibited export of instruments and strategies used to extract and separate uncommon earths, and in December 2023, it banned the export of processing expertise.
China’s monopoly over uncommon earths can be bolstered by its robust analysis base. A examine discovered that China leads the sphere of rare-earth analysis, contributing almost 30% of all revealed papers. The U.S. and Japan adopted with shares of 10% or much less, whereas India accounted for about 6%.
In parallel, China has elevated funding for mineral exploration, allocating about $14 billion yearly since 2022, in response to the IEA. The company notes that this marks the best three-year stretch of funding in the previous decade.
The information for the charts have been sourced from the U.S. Geological Survey, UN COMTRADE, the International Energy Agency, AP and Reuters
