China plays a dominant role in the global rare earth minerals market, controlling much of the mining, processing and supply of these critical elements.
Rare earth elements (REEs) are a group of 17 chemically similar metals. These include Light REEs such as Lanthanum, Cerium, Praseodymium, Neodymium and Samarium; and Heavy REEs such as Gadolinium, Terbium, Dysprosium and Yttrium.
They are essential for manufacturing high-tech and green technologies. Smartphones and computers, electric vehicle (EV) batteries and motors, wind turbines, military systems (e.g., radar, missile guidance), LEDs, lasers, and MRI machines
China’s control over rare earths is extensive. In mining production China controls 60-70% of the world’s rare earth minerals. However, in terms of processing and refining China controls 85-90% of global capacity.
China not only mines a large portion of REEs but dominates the entire supply chain, from extraction to refining to magnet production.
China dominates because of its geological reserves. China has abundant rare earth deposits, especially in Inner Mongolia. The Chinese government has also invested heavily in rare earth mining and processing infrastructure.
Less stringent environmental regulations, lower labour costs, and state support give China a competitive edge. China has imposed export quotas and tariffs in the past to maintain control and influence global prices.
China’s near monopoly on rare earths gives it enormous strategic and economic influence over global technology and defence sectors. The rest of the world is now racing to build more resilient, diversified rare earth supply chains, but catching up remains a significant challenge.
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