Global Trends

Rare Earth Minerals: A Modern Weapon

What are rare earth minerals? They are 17 metallic elements that make modern technology possible. They sit in your

By Conor Healy

April 23, 2026

What are rare earth minerals? They are 17 metallic elements that make modern technology possible. They sit in your phone, your laptop, your electric car, your MRI machine, and the guidance system of every missile in every military on earth. A single F-35 fighter jet contains 417 kilograms of them. A Virginia-class submarine uses thousands more. The magnets that spin the motors in wind turbines and electric vehicles depend on them entirely.

And one country controls almost all of it.

China Controls 70% of Mining, 90% of Refining, and 94% of Magnets

China dominates every stage of the rare earth supply chain. It mines roughly 70% of global output. It refines approximately 90%. But the real chokehold is further downstream: China produces 94% of the world’s rare earth permanent magnets, the components that actually go into the products everyone uses.

Those magnets are not optional extras. Without neodymium magnets, an electric vehicle’s motor does not work. Without samarium-cobalt magnets, a jet engine’s turbine cannot function at high temperatures. If lacking terbium and dysprosium, the magnets in data centres running AI models would overheat and fail. Every sector building the future, from clean energy to defence to artificial intelligence, runs through Chinese processing plants.

The International Energy Agency published a study in 2025 showing that for 19 out of 20 critical minerals, China is the leading refiner. The average market share: 70%. This concentration has intensified, not lessened, over the past decade.

The 30-Year Play

This did not happen by accident. In the 1980s, the United States was the world’s largest producer of rare earths. The Mountain Pass mine in California supplied most of what the West needed. Then China made a decision.

Beijing invested billions over three decades. Government subsidies. Strategic planning. Vertical integration from mining to processing to manufacturing. By the time Western companies noticed, it was already over. Mountain Pass closed in 2002, unable to compete with Chinese prices and unwilling to match Chinese environmental tolerance. The processing knowledge left with it.

“Clearly, China is the leader, and the US is far behind,” mining executive Mick McMullen told Fortune in March 2026. “It’s a bit unbelievable that it’s taken so long for everyone to realise that maybe we should have some of these things in house.”

The irony is that rare earth minerals are not actually rare. They are more common than gold. The United States, Australia, Brazil, Vietnam, and India all have significant deposits. The problem is not finding them. The problem is that processing rare earths requires specialised technology, enormous capital investment, and tolerance for environmental damage that most countries are unwilling to accept. China built that infrastructure while everyone else looked away.

2025: China Pulled the Trigger

China has been tightening export controls for years. But 2025 marked an escalation.

Beijing placed several rare earth elements on its export control list, requiring foreign companies to obtain licences before purchasing. By October, the list expanded to include holmium, erbium, thulium, and ytterbium. Then came the dual-use restrictions: products containing rare earths that could be used in defence applications now require explicit approval, even if manufactured outside China using Chinese materials.

The rules apply not just to raw materials but to “parts, components, and assemblies” containing Chinese-sourced rare earths. That means magnets. Motors. Guidance systems. The stuff already inside finished products.

Japan was targeted specifically. China imposed export controls on dual-use items heading to Japanese companies. This was not subtle. Japan imports more rare earths than almost anyone, and its high-tech manufacturing sector depends on them completely.

Analysts at S&P Global have warned that supply bottlenecks will persist through 2027. Prices for heavy rare earths like dysprosium and terbium, essential for high-performance magnets, have spiked. In April 2026, China Northern Rare Earth, the largest player in the sector, raised prices by 44% for a single quarter.

The Scramble

The United States and its allies are now attempting in a few years what China built over three decades.

Washington signed a framework agreement with Australia committing $1 billion to expand rare earth production. A memorandum of understanding with Malaysia followed. The US Geological Survey maintains a critical minerals list. The EU passed a Critical Raw Materials Act. Everyone is talking about supply chain resilience.

But the maths does not favour speed. Mining projects take years to permit and develop. Processing facilities require technology that barely exists outside China. One estimate suggests it could take a decade to build meaningful alternative capacity. A mining executive at a recent conference put it more bluntly: “The rest of Asia probably just has to keep taking it off China for now.”

Japan learned this lesson earlier than most. After the 2010 Senkaku Islands incident, when China informally restricted rare earth exports following a fishing boat dispute, Japanese industry panicked. Over the following fifteen years, Japan reduced its dependency on Chinese rare earths from 90% to 60%. It invested in recycling, developed substitutes, and diversified suppliers.

It took fifteen years to drop thirty percentage points. And 60% is still dangerously high.

What Happens When Supply Chains Become Leverage

Rare earth minerals are no longer just industrial inputs. They are instruments of foreign policy. Every EV battery, every wind turbine, every guided missile contains components that China can restrict, delay, or price however it chooses.

The 44% price increase is not a market fluctuation. It is a reminder. The export controls are not bureaucratic inconvenience. They are leverage.

For three decades, China invested in the infrastructure while the rest of the world bought cheap magnets and asked no questions. Now everyone is scrambling to build what China already owns. The timeline is a decade. The dependency is today.